Airberlin shares run into turbulence

Volatility as speculation continues over the German carrier's ownership.

An analyst in Germany said airberlin shares are more attractive to other carriers than to institutional investors. Kay Nietfeld / EPA

Airberlin stock has been volatile in recent days as speculation rises in the market over the future of its ownership structure.

Shares rebounded 0.7 per cent yesterday to €1.88 after falling 7.1 per cent on Monday and 6.7 per cent on Friday.

“There are some uncertainties related to Etihad making an acquisition, a merger or anything else with airberlin,” said Frank Schwope, an equity analyst at German-based Norddeutsche Landesbank Girozentrale.

Options include Etihad increasing its stake in airberlin or the carrier going private.

Etihad already owns 29.2 per cent of the German airline. If it were to cross the 30 per cent threshold, it would, under German regulations, have to make an offer to other shareholders at the average stock price for the past 90 days.

However, if airberlin were to go private, then Etihad could lift its stake to 49.9 per cent before it confronted the next regulatory hurdle.

That hurdle: if Etihad were to become majority owner of airberlin, the latter could lose landing rights at European airports to carriers with majority European ownership.

Etihad declined to comment yesterday.

An analyst in Germany said airberlin shares are more attractive to other carriers than to institutional investors.

“Our investors are long-term value investors. They are interested in a position that would make sense for them. Airberlin is volatile for them,” said Sebastian Hein, an equity analyst at Germany-based Bankhaus Lampe. “If you are an airline, you would target to expand your foothold, then it makes sense, but not for long-term fund investors.”

Other shareholders in the airline include Norges Bank and Union Investment.

Airberlin said that it was “in continuing and advanced discussions on measures for a recapitalisation, which would strengthen the equity and liquidity position of the Air Berlin Group. The company is continuing its discussions on those measures with its shareholders and other parties.”

Airberlin has delayed the release of its annual results. It has said they will be postponed until no later than the end of April as it is working on the recapitalisation.

Etihad’s growth strategy has relied on expanding its route network through “equity alliances”, in which it invests in carriers that extend its reach in strategically important regions.

Last year, Etihad grew its equity alliance to seven members – Air Seychelles, airberlin, Virgin Australia, Air Serbia, Ireland’s Aer Lingus, India’s Jet Airways and the Swiss carrier Etihad Regional, formerly known as Darwin Airline.

Etihad is currently holding talks for a potential acquisition of Alitalia, which would be its biggest acquistion to date. The Italian news agency Ansa said on Monday that Italy‘s minister of transport will present details of the deal with Etihad this week.

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