Air Berlin, Germany's second-biggest airline after Lufthansa (LHAG.DE), said on Tuesday its new restructuring program announced in October would seek annual savings of 400 million euros ($535 million) from the end of 2014.

The program will entail cutting 900 jobs and leave the airline to concentrate on its most profitable routes with more flights to be offered to popular destinations like Majorca.

It also said it would expand long-haul services from Berlin and Duesseldorf. Airports in Vienna, Hamburg, Munich, Zurich and Stuttgart will remain primary bases for Air Berlin planes.

The company also aims to further cut its fleet of aircraft to 142 this year, from 158 at the end of September 2012.

Air Berlin, which has not posted a full-year operating profit since 2007, has already cut seats, unprofitable routes and postponed plane orders to reduce costs and shrink its way back to profitability after racking up debts to expand.

The years of losses cost founder Joachim Hunold his job as chief executive in 2011. Interim CEO Hartmut Mehdorn unexpectedly stepped down last week, handing over the controls to the airline's strategy chief Wolfgang Prock-Schauer.

Under Mehdorn Etihad bought almost 30 percent of Air Berlin, granted loans to the German carrier and bought a majority of its frequent-flyer programme for 184.4 million euros in cash - more than Air Berlin's market value.

($1=0.7482 euros)

(Reporting by Maria Sheahan; Editing by Greg Mahlich)

• A Permanent Economic Emergency