Air Berlin's ambition to take on rival low-cost carriers Ryanair and EasyJet hung in the balance last night as it considered changes to a delayed stock offer in the face of investor scepticism.
The move represents a setback for Aer Lingus, which hopes to come to the market within months. Any such move could dash the airline's hopes of raising a minimum €350 million to pay for new aircraft and cast a pall on the German stock market, which has seen a slow restart to offers after the end of the technology boom.
Europe's third-largest budget airline said it was postponing its debut from today to Thursday and consulting advisers Commerzbank and Morgan Stanley - possibly to cut the price range from €15-€17.50 per share.
"That's one option they're looking at right now," said a source. "Obviously, things haven't gone quite to plan."
The move followed a raft of analysts' reports that raised questions about the loss-making airline's chances of making a profit amid high fuel prices and fierce rivalry on European routes.
Germany's Bankhaus Metzler issued a report valuing the shares at €12 apiece, saying the airline would at best break even in 2006. The carrier had hinted it would go into the black this year.
Joachim Hunold, founder and chief executive, said in April that recent restructuring should have a favourable impact on the bottom line, and equity analysts at Commerzbank forecast that net profit would hit €51 million in 2006.
But in grey market trading ahead of the launch, Air Berlin shares yesterday dipped as low as €13.80 before recovering to trade between €14.80 and €15.60, according to specialist brokers Land & Schwarz and DKM.
Air Berlin had hoped to raise up to €408 million for investments and up to €464 million for its seven founding owners in an attempt to switch focus from its charter business to low-cost services. The company needs the money to help pay for 55 new aircraft on order until 2011, which will in part replace 56 existing aircraft.
Air Berlin this week said April passenger numbers were 25 per cent up on a year ago.
Mercer Consultants give it a European market share of 8 per cent. Rivals Ryanair and EasyJet each hold at least 26 per cent.
