TT. Tui Travel

German low-cost airline Air Berlin PLC (AB1.XE) Monday reported widening losses, mainly due to higher tax charges, but saw its shares rise sharply after its shareholding structure received a significant boost Sunday.

The second-largest German airline said its 2008 net loss widened to EUR75 million, from a net loss of EUR39.9 million in 2007, partly due to a tax charge. However, it said it is targeting higher earnings before interest and taxes, or EBIT in 2009. In 2008, EBIT was at EUR14.2 million.

Total revenue rose 6.7% to EUR3.4 billion, despite passenger numbers rising only slightly to 28.6 million, from 28.2 million in 2007. It expects this figure to drop to as low as 27.3 million in 2009.

Still, at 1505 GMT, Air Berlin shares were trading up 1% at EUR3.10, outperforming a 0.9% fall in the German small cap index SDAX. Earlier Monday it traded up 12% at EUR3.43, almost hitting its March high of EUR3.46.

Air Berlin Sunday said Turkey's ESAS Holding A.S., which operates the airline Pegasus, is set to acquire a stake of about 15.3% of the voting shares in Air Berlin from Swiss bank UBS AG (UBS). Analysts say the deal makes the German carrier's shareholder base more stable.

Last week, TUI Travel PLC (TT.LN) took a stake of no more than 20% in Air Berlin in return for the German carrier taking a same stake in subsidiary TUIfly and operating some of TUIfly's routes.

"The ESAS acquisition has certainly extinguished speculation of a stock overhang," said Uwe Weinreich of UniCredit, who rates the Air Berlin at hold.

Air Berlin said Monday it considers ESAS a long-term partner.

Company Web site: www.airberlin.de

-By Natascha Divac and Kirsten Bienk (Herbert Rude contributed to this item.)

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