Germany’s second-biggest airline, Air Berlin PLC, said on Monday, that its chief executive was stepping down after leading a drive to turn-around the company over the past 16 months.

Air Berlin said CEO Hartmut Mehdorn, a former head of Germany’s national railway who took over on an interim basis in September 2011 after company founder Joachim Hunold quit, is retiring from the position with immediate effect “by mutual agreement.” On his stepping down Mr. Mehdorn will become a non-executive director of Air Berlin.

Air Berlin has struggled in Europe’s highly competitive travel market. Under Mehdorn, Abu Dhabi-based Etihad Airways has become its biggest shareholder with a stake of nearly 30 percent. The airline which has joined the Oneworld alliance, which includes British Airways and American Airlines, has cut some routes and sold a majority stake in its frequent flyer program to Etihad. The airline has complained about persistent delays to the opening of a new airport in Berlin, one of its major bases, which now appears likely to be pushed back beyond the scheduled October 2013 date.

Mr. Mehdorn said in a statement that it was “the right time” for a change in management.

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