Frankfurt - Air Berlin, Germany's second-largest airline, said it would introduce business-class travel on all its German and European flights as part of a bid to escape long-standing financial difficulties.
“We're at the beginning of a far-reaching process of change, at the end of which will stand a new, strengthened Air Berlin,” chief executive Stefan Pichler said in a statement.
It was part of “decisive strategic steps for a sustainable future of the company”, he went on, saying that the airline was now “clearly positioned in the premium segment among European airlines”.
Air Berlin - which serves many of Germans' favourite holiday destinations as well as major shareholder Etihad's hub in Abu Dhabi - has long offered business-class seating on its long-haul flights.
But it's the first time it has offered the service, which also includes priority at airport security and when boarding, access to first-class lounges and a-la-carte dining, on short- and medium-haul services.
New CEO Pichler, in post since early 2015, seeks to reposition the airline after years of losses and a succession of fruitless attempts at restructuring Air Berlin.
The company has only survived until now thanks to regular cash injections from Etihad, which owns 29.1 percent of its shares.
In 2015 Air Berlin reported a loss of 447-million euros.
Lufthansa is in talks to buy up 40 of Air Berlin's aircraft along with their crews, Bloomberg News reported, although neither firm would comment on the matter.
With the extra planes, Lufthansa could build out routes for its low-cost subsidiary Germanwings while Air Berlin continues its reorientation towards higher-end customers.