Air Berlin is raising EUR38.8 million euros (USD$55 million) from the sale of new shares, topping up its coffers for the second time this year as the global economic crisis pummels airlines around the world.
Analysts estimated that some EUR70 million - EUR100 million would be raised in all to help reduce debt, pay for new planes and hedge fuel costs.
Air Berlin, Germany's second-biggest airline after Lufthansa, said on Thursday it placed 6.6 million shares with institutional and professional investors at 3.50 euros each, raising EUR23 million.
In addition, ESAS Holding, controlled by Turkey's Sabanci family, which bought a 15.3 percent stake in Air Berlin earlier this year, agreed to buy 4 million new shares at the same price.
Air Berlin's Chairman Johannes Zurnieden and CEO Joachim Hunold would take up another 500,000 shares, the company said.
"While the capital increase at current share price levels means a dilution for existing shareholders, on an operating level the company is holding up relatively well in a challenging environment," Commerzbank analyst Johannes Braun said.
The two capital increases come on top of 16.3 million new shares issued as part of a cross-shareholding deal with TUI Travel earlier this year. That deal made TUI Travel Air Berlin's biggest single shareholder with a 19.9 percent stake.
PLANE PURCHASES
A spokeswoman for Air Berlin said earlier proceeds from the capital increases would be used for general corporate purposes such as fuel hedging agreements for 2010 and new aircraft purchases.
"We assume that the proceeds from the total of three capital increases of an estimated EUR100 million will be used primarily for the purchase of new planes, the purchase of an indirect minority stake in TUIfly and a reduction of net debt," NordLB analyst Martina Noss said.
The German carrier still has outstanding orders for planes, including 25 Boeing 787s due for delivery between 2013 and 2017.
Air Berlin also said on Thursday that the number of passengers it transported in May fell 7.7 percent in May from the year earlier. Revenue per available seat kilometer rose 9.3 percent, indicating the company had improved its profitability.
The world's carriers could lose more than USD$4.7 billion this year, industry body IATA's Director General Giovanni Bisignani has said. He said air freight volumes may have bottomed out while passenger numbers have shown no recovery.
