Air Berlin Yields Improve On Capacity Cut

Air Berlin boosted its yields by 14 percent in June as it cut back capacity to address a passenger slump, Germany's second-biggest airline said Tuesday.

Revenue per available seat kilometer advanced to 6.07 euro cents from 5.32 cents in the year-earlier month even as the number of passengers fell 4.9 percent to 2.57 million.

The discount airline transported 5.8 percent fewer passengers in the first half of the year amid an economic slump.

Air Berlin CEO Joachim Hunold said on June 23 that the second quarter went well and it was still on track to reach its full-year EBIT target.

"Especially in consideration of the extremely difficult environment, the June traffic figures in our view validate Air Berlin's strategy of focusing on its core business and slowly but steadily improving its margins through a combination of strict cost management and a competitive offering," LBBW analyst Per-Ola Hellgren said in a research note.

"However, the road to generating attractive returns to shareholders will likely be long and difficult, and the current market conditions present significant operating and financial risks," he added.