Air Berlin: grounded

Puke Bag; Amenity Kit; Gifted in 2020/2021.

Air Berlin was Germany’s would-be number two, run for two decades by Joachim Hunold – who, in a detail you genuinely could not invent, began his career in marketing at LTU. Yes. That LTU. The cursed one from the neighbouring exhibit. He would later buy it. Do stay with us.

The original sin was strategic indecision dressed up as ambition. Air Berlin tried to be a low-cost carrier and a full-service legacy airline and a charter holiday line, all at once. In aviation this is technically known as operating three loss-making airlines while wearing one trench coat (yes - naked under that trench coat...).

The IPO, May 2006. The market delivered its verdict early and without mercy: the float was postponed by a week, the price slashed from as much as €17.50 down to €11.50, and the shares opened around €12. For a self-styled growth story, investors paid roughly the price of a sad airport sandwich – and still felt overcharged.

Even Johannes B Kerner couldnt help it..

2007. Flush with IPO cash, Air Berlin went shopping and bought LTU (€140 million), dba and others. It was now genuinely large. It was not, at any identifiable point, profitable. Across roughly six years it generated some €2.7 billion of losses, carried €1.2 billion of net debt, and posted a record €446 million loss in 2015 alone on €4 billion of revenue. The business model was, in essence, a wood-chipper for equity.

The Hunold magazine years. Like all great capital allocators, Hunold chose to express himself through editorials in the in-flight magazine. He used the platform to lecture the Balearic regional government about the Catalan language – Air Berlin was “an international airline,” he explained, and thus need not bother with it – and to share his views on climate policy: “While half the world’s population goes hungry, wheat is being used for heating.” Visionary material to digest at 11,000 metres with a €4 beer.

The Abu Dhabi rescue. Enter Etihad, which raised its stake to 29.1% in 2011 and strapped Air Berlin into its “equity alliance” – a constellation of part-owned carriers now studied chiefly as a cautionary tale. German regulators then ruled that 31 of 83 Etihad–Air Berlin codeshare routes were simply illegal. Etihad nonetheless tipped in another €250 million as late as April 2017 – and then, at last showing sound judgement, stopped.

15 August 2017: insolvency. The German state kept the aircraft aloft with a €150 million bridge loan so that stranded holidaymakers could actually get home. Lufthansa and easyJet picked over the carcass. The Austrian offshoot Niki – founded by Niki Lauda, then sold by Niki Lauda – promptly went bust as well, whereupon Niki Lauda bought it back. Because of course he did.

27 October 2017: the last flight. Munich to Berlin-Tegel, finishing with one slow, honorary loop around the Tegel tower. It was, by every account, genuinely moving – which is more than the income statement ever managed in eleven years of trying.

Air Berlin – €12 to €0 in eleven years, the scenic route to zero.

The emotional short. From around €12 at listing to delisted-and-worthless: about minus 99%. Eleven years, €2.7 billion of other people’s money, a procession of CEOs, one Abu Dhabi sugar daddy, and a founder who came from LTU, bought LTU, and then followed LTU straight into this very museum. The curse, you will have noticed, is nothing if not consistent.

(The Kapitalmarkthygienemuseum is hunting for an Air Berlin Topbonus card, a slice of the final-flight memorabilia, or one of those red tailfins. Enquire within.)