Air Berlin to Scrap Routes as Fuel Costs Hurt

German carrier Air Berlin has abandoned its full-year profit goal and says it will scrap unprofitable routes from its network as it tries to weather rising fuel costs.

The airline still expects to achieve an operating profit for the full year based on current jet fuel prices but it has dropped its forecast for 2008 earnings before interest and tax (EBIT) of EUR73 million to EUR120 million euros ($114 million to $187 million).

“As a result of the current difficult market environment, in particular the high fuel prices, it is anticipated that operating income will be adversely affected during the further course of the year, making it difficult to obtain the envisaged EBIT corridor,” Air Berlin said in a statement on Thursday.

The airline said it now expected fuel costs this year to be some EUR80 million more than it had forecast in March.

Chief Executive Joachim Hunold declined to give a new target EBIT range and told a news conference that any new range could not be taken seriously, given market conditions.

The head of EADS, the parent of European plane maker Airbus, told the ILA Berlin Air Show this week he was worried about the impact of the high oil price on airline finances. Oil prices have roughly doubled in the last year.

The carrier has hedged 88 percent of its fuel needs for this year and 24-35 percent for the first three quarters of next year, Hunold said, as it tries to control the impact.