Against the backdrop of the International Tourism Fair in Berlin (ITB), Air Berlin chairman Joachim Hunold unveiled his airline's plans for going public.

Air Berlin, which has expanded rapidly in the past 15 years to become Germany's second largest airline following Lufthansa, looks to the initial public offering (IPO) for a fresh cash injection for continued expansion plans.

"If we want to continue to grow and expand in the highly competitive European market, we must respond appropriately by going public," Hunold said at a press conference at the ITB in Berlin on Wednesday.

Biggest growth story of the year

Although the airline has yet to announce a timeframe for the flotation and Hunold has declined to say how big the initial offering will be, experts forecast a start date in the second quarter of 2006. Sources close to the company have also said the IPO could be worth "at least 500 million euros ($595 million)."

Recent press reports have suggested that the IPO could raise up to 700 million euros, making it one of the biggest flotations on the German stock exchange this year. "We could be looking at one of the biggest growth stories of the year," an insider involved in the transaction told the financial news agency dpa-AFX.

In 2005, Air Berlin had 13.5 million passengers and a 12.5 percent growth over the previous year. Before-tax turnover was estimated at 1.22 billion euros. Hunold said the upcoming year looks just as optimistic following a passenger increase of 10 percent in the first two months.

Expansion on the horizon

With its fleet of 54 airplanes, Air Berlin flies to 55 different tourist destinations outside of Germany. In the upcoming year it plans to purchase six new airplanes and expand its offerings.

The company employs around 2,700 workers and is looking to hire another 600 in the near future.

Air Berlin's growth over the last 15 years is primarily due to the vision of Joachim Hunold, who developed the budget airline from a small venture to a major German player. He still owns 5 percent of the company's holdings.

Budget airlines cooperate

In a separate announcement, two of Germany's other airlines, Germanwings and Condor -- both part of the Lufthansa family -- announced they planned closer cooperation in passenger booking. Germanwings, which has a strong domestic network, and Condor, with its numerous long-distance offerings, plan to work together to offer customers more combination bookings over the Internet. Germanwings would function as a delivery airline, bringing passengers to Condor's long-distance hubs.

In the past year, the number of passengers flying with Germanwings skyrocketed by 57 percent to 5.5 million. A further 36 percent increase in passengers is expected for this year. Condor booked about 7.3 million passengers for 2005.

Just a few weeks ago a similar fusion took place between the long-distance airline LTU and the domestic carrier dba.