Chief Executive Hartmut Mehdorn told reporters on Thursday he would neither confirm nor deny German media reports that the plan, dubbed Turbine 2013, would entail some job cuts.

"But one thing is clear, we cannot avoid extraordinary measures," he said a day after Air Berlin published third-quarter that showed operating profit rose by 4.5 percent thanks to cost cuts.

Net debt increased by 5 percent over the three-month period to 853 million euros at the end of the quarter, roughly four and a half times its shareholder equity.

Chief Financial Officer Ulf Huettmeyer told reporters he was confident the sale of its Topbonus frequent flyer programme would help narrow the operating loss for this year, adding he expected it would be "a bit" better than analysts' consensus for a loss of 160 million euros.

Air Berlin, which has not posted an operating profit since 2007, on Thursday said Turbine 2013 would make the airline lean and would entail structural changes so that it could focus only core businesses.

German news broadcaster n-tv on Tuesday said the airline planned to cut 10 percent of the workforce, equating to more than 900 jobs.

Mehdorn said as of end-September Air Berlin had already drawn down $200 million of the $255 million five-year financing facilities the Arabian airline had provided last December for fleet development and was not currently in talks with Etihad for any new loans.

Air Berlin shares have declined 38 percent so far this year while larger rival Lufthansa (LHAG.DE) has risen by nearly as much. Air Berlin shares were up 1.6 percent at 1225 GMT. (Reporting By Marilyn Gerlach; Editing by Mike Nesbit)

• A Permanent Economic Emergency