With Europe's skies becoming crowded by discount airlines, Germany's second largest airline Air Berlin was looking to generate a bit of much needed cash. Buying a few new planes and opening up new routes seemed just the thing to consolidate the company's position as Europe's third largest discount carrier behind EasyJet and Ryanair, both of which have expanded aggressively into the German market recently. The result had been a much-touted stock flotation scheduled for Friday.

But on Thursday, the IPO was suddenly delayed. Concerns about the airline's profitability, and worries that the price range of between €15 and €17.50 per share was too high, led the company to extend the stock's offer period to May 10. Trading will start on May 11. On Friday afternoon the company announced that the new price range would be between €11.50 and €14.50.

"The institutions are saying the (old) price range isn't cheap enough," Nigel Bolton, head of equities at Scottish Widows Investment partnership, told Bloomberg. "Air Berlin has a limited history, a limited track record, and their expansion plans are pretty ambitious over the next two years, at a time when we know Ryanair is planning to expand in Germany."

The budget airline is hoping to raise €870 million ($1.1 billion) with the stock market flotation, money which will be invested in new aircraft, more routes and paying off the company's debt. For the past two years the airline has been in the red, with a net loss in 2005 of €115.9 million. Air Berlin, though, is expected to generate a profit in 2006. But doubts about the stability of the discount airline market in general have caused investors to be wary about the Air Berlin IPO. The rising price of oil is also a concern to investors.

Even before Thursday's decision to push back the stock's flotation, the offering had generated its share of criticism. The company launched a major advertising campaign in April to tout the stock featuring popular television presenter Johannes B. Kerner -- a personal friend of Air Berlin boss Joachim Humold. Many have accused the airline of playing down the risks faced by the company in Europe's crowded skies. Air Berlin had 13.5 million passengers in 2005, representing a rise of 12.5 percent over 2004. By comparison, Ryanair hosted 33.4 million guests and EasyJet had 30.3 million.