The Rise And Fall Of Air Berlin

Air Berlin first commenced operations 49 years and was an influential force in aviation until it ceased operations just four years ago. There were plenty of ups and downs along the way for the carrier. Here’s a look at the airline’s key milestones over the decades.

Air Berlin 737 Jet
Air Berlin went through several different livery schemes in its four decades of activity. Photo: Getty Images

Born in the USA

Even though the company has a very German name, its roots can be traced across the Atlantic Ocean. The outfit was founded by former Pan Am captain Kim Lundgren with other former airline figures back in 1978. Going by the name of Air Berlin USA, the Lelco subsidiary sought to provide charter flights from Berlin Tegel to Mediterranean hot spots.

Notably, during this Cold War period, the United States was one of just three airlines able to access Tegel’s air corridors. Only France and the United Kingdom had the same privilege in the West Berlin market.

Subsequently, on April 28th, 1979, the carrier’s used Boeing 707 aircraft hit the skies for the first time. The trip was from Tegel to Palma de Mallorca in Spain.

Seatmaestro highlights that initial service was to destinations across the Canary Islands and the wider Mediterranean on behalf of Berliner Flug Ring. However, the network swiftly grew. By the time the 1980s were in full swing, operations had expanded to weekly scheduled flights to Orlando via Brussels. The Boeing 737 joined the airline’s fleet during this decade, with the carrier operating a 737-200 and 737-300 across the skies.

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A new world

As the 1980s drew to a close, Air Berlin was left with serious questions to answer. The fall of the Berlin Wall on November 9th, 1989, marked a new era in the economy of Germany. A unified country meant that the US-backed business had to find a new structure to continue operating. Joachim Hunold, a former sales and marketing director at German carrier LTU International led the airline from 1991 with a series of local investors to offer a new and more German operation.

This new era marked a fresh start for Air Berlin, transforming from a charter airline to a major carrier. The carrier’s new 737-400 aircraft would transport nearly half a million passengers to leisure destinations in 1992 alone. This figure was then doubled by the end of 1994. The growth continues throughout the 1990s, with additional offerings to the likes of London, Vienna, Barcelona, and Zurich, marking another expansion to business services.

Air Berlin Plane
Air Berlin was a fan of the Boeing 737 due to the plane’s reliability on short and medium-haul leisure operations. Photo: Getty Images

The airline wasn’t afraid to innovate. In 2001, it became the first carrier to fly a 737-800 with blended winglets on its scheduled services. This feature allowed quicker climb while increasing fuel efficiency. There were also benefits when it came to noise reduction.

The risk-taking continued into the 2000s, with investments in the likes of NIKI and a takeover of LTU. New long-haul opportunities were now there, backed by the ordering of 25 Boeing 787 Dreamliner aircraft in 2007.

AIr Berlin 737
Air Berlin signed a partnership with TUI Travel in 2009 and took over TUIfly’s domestic German routes, along with other select European services. Photo: Getty Images

Financial difficulties

The carrier joined oneworld in 2012, allowing NIKI to become an affiliate member of the alliance. However, the 2010s were not kind to Air Berlin at all. Losses piled over the period of six years, and by the time 2016 rolled around, the company was approximately $870 million in debt. Amid the difficulties, the firm opted to slash capacity to help improve the dire situation.

Air Berlin’s chief executive Thomas Winkelmann said the following about the measures, according to Financial Times.

“[Air Berlin] is working tirelessly to achieve the best possible outcome for the company, our customers and employees, given the situation.”

Air Berlin filed for insolvency in August 2017 after Etihad, which was the company’s largest shareholder, stopped pumping in further funds. There were multiple cash injections over the years. However, after the German airline kept reporting losses and investors felt enough was enough.

A bridging loan that was worth around $180 million was also offered by the government of Germany. Nonetheless, this figure was not enough to save the airline. Thus, on October 27th, 2017, Air Berlin fully ceased operations.

The subsequent impact

Even after Air Berlin’s downfall, the airline’s struggles continued to cause a stir in the aviation industry. The airline’s insolvency administrator sued Etihad for over $2 billion. The claim was that the UAE carrier failed to uphold its commitments.

The administrator said the following in court in December 2018, according to Aeronautics:

“[It] is of the opinion that [Etihad] gave a binding commitment. Because it violated that commitment, it should settle all the justified claims of creditors.”

Along with the aftermath, it has been revealed that Air Berlin was forcing passengers to pay for canceled flights after the collapse. Much of the airline’s fleet and many of its employees were taken on by compatriot Lufthansa. In total, the flag carrier of Germany took on 81 planes and approximately 3,000 staff members. It was also announced that low-cost carrier easyJet would take on 1,000 employees.

A Lufthansa Boeing 747-800 is seen parked at the stand in
At one point, Air Berlin was going head to head with the almighty Lufthansa, but the German flag carrier would ultimately prevail, taking on many of its former competitors’ assets. Photo: Getty Images.

Overall, many short and medium-haul leisure carriers often struggle after they expand to long-haul operations. Air Berlin started as a leisure carrier catering to sunseekers heading to regional hotspots. Yet, by the time it filed for insolvency, it had a presence in the likes of Central America, the Middle East, and Asia-Pacific. Looking back, it was evident that the operator truly shifted away from its original business model and found it hard to keep up with the new demands.

What are your thoughts about the journey of Air Berlin until it ceased operations in 2017? Did you ever fly with the carrier over the years? Let us know what you think of the airline and its operations in the comment section.