Feb. 18 (Bloomberg) -- Air Berlin Plc rose to the highest in more than nine months after analysts at Deutsche Bank AG said the German airline’s cost savings efforts will bear fruit.
Europe’s third-biggest discount carrier will cut 900 jobs, almost 10 percent of the workforce, and extend fleet reductions in a push to save 400 million euros ($534 million) by the end of 2014, the airline said in January.
The strategy known as Turbine is “the last chance for the company – and we think it will be a success,” analysts including Michael Kuhn wrote in a note to clients today. “Air Berlin is undergoing the deepest restructuring program in the history of the company,” Kuhn wrote. “We expect gradual results improvements which should bring Air Berlin back into profitability in 2014.”
The shares rose almost 11 percent to 2.09 euros, the highest on an intraday basis since May. They traded at 2.01 euros at 11.08 a.m., up 6 percent, giving the airline a market value of 234.7 million euros.
The analysts recommended clients buy the shares and said they will rise in value to 3.50 euros within a year, compared with an earlier target of 1.40 euros.
Separately, they raised their recommendation on Europe’s second biggest airline Deutsche Lufthansa AG to buy from hold and said the shares will advance to 19 euros from an earlier target of 12.50 euros. They said they expect details on the company’s SCORE savings program will “further support confidence”.
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