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Air Berlin is to slash its operating fleet and devote 40 aircraft to operating services for the rival Lufthansa Group, in a significant restructuring that will cost more than 10 per cent of the jobs at Germany’s second-biggest airline.

The announcement comes after a long period of mounting losses for the airline, which has struggled to bring down its costs to compete against Ryanair, EasyJet and Lufthansa’s Eurowings low-cost operation, reports Robert Wright in London.

The airline has required repeated bail-outs from Etihad, the Abu Dhabi-based airline that bought into the company in 2012 and currently holds a 29 per cent stake.

But, despite long-running restructuring cuts, the company lost €271m on €1.71bn turnover in the first half this year.

Air Berlin said that its “touristic” business – its charter operations – would be combined in a separate unit “with a view to evaluate strategic options”.

Out of its total fleet of 144 aircraft, it plans to provide another 40 Airbus A320 aircraft to the Lufthansa Group, with Air Berlin operating 38 of the aircraft with its own crews on Lufthansa’s behalf.

Air Berlin will continue to operate a “reduced core fleet” of 75 aircraft on long-haul routes from its two hubs in Berlin and Duesseldorf. It indicated it would also seek to bring down costs for the remaining members of its staff – it employed 8,656 as of June 30 – through negotiations with unions.

Air Berlin said the restructuring would create a “lean, dedicated network carrier”.

Copyright The Financial Times Limited 2017. All rights reserved.

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