Austrian Airlines generates operating profit in second quarter

  • Despite crises in Japan and Middle East positive operating result of EUR 0.4 million in second quarter
  • Operating result in first half-year slightly better than previous year at minus EUR 63.1 million

Framework conditions for Austrian Airlines in the first half-year of 2011 were considerably more difficult than anticipated. The high oil price had a negative effect on the result. As well as this, after the financial crisis in Central and Eastern Europe, two more of Austrian Airlines’ strategic pillars, the Middle East and Japan, were impacted by special one-off effects . Around 20 percent of Austrian’s Available Seat Kilometres (ASK) are generated in these crises markets.

Anyway the company’s total operating income in the first half-year remained practically stable, falling slightly by 0.7 percent to EUR 1,017.9 million (1st half-year of 2010: EUR 1,024.9 million). Despite the difficulties associated with the crises, the carrier’s EBITDA improved significantly from EUR 7.7 million last year to EUR 39.3 million. Its operating result improved by 8.2 percent to minus EUR 63.1 million (1st half-year of 2010: minus EUR 68.7 million).

The Austrian Airlines Executive Board, Peter Malanik and Andreas Bierwirth, said the following: “Due to the consistent programme of restructuring we have been implementing over the past eighteen months, we have been able to marginally improve on last year’s result in the first half-year of 2011, despite the crises that hit Japan and the Middle East. The framework conditions are naturally difficult, but we continue to make every possible effort to achieve our target result for the current year – a positive operating result.”

Austrian Airlines is implementing a package of – partially strengthened – measures to combat the crises. Most importantly of all, this includes flexible adjustment of the flight schedule: The company reduced its available capacity in the Middle Eastern markets affected by 40 percent. The associated reduction in costs will take full effect from the third quarter onwards. In addition to this, the Vienna-Tokyo route is already beginning to show signs of recovery.

At the same time, Austrian Airlines is making targeted investments in improvement of its product quality: By September 2011, the 32 aircraft of its medium-haul fleet – the Airbus A320 fleet family and the Boeing 737 – will be converted to a new interior design featuring the new Europe seats. In the winter of 2012/2013, the ten aircraft of the long-haul fleet will also be given a modern interior design with new seats. Austrian Airlines’ focus on its product quality was recently recognised when the company won two awards at the World Airline Awards: “Best Business Class Catering” and “Staff Service Excellence Europe”.

Quality also includes, most importantly of all, the punctuality of its flights: Austrian Airlines is one of the most punctual airlines in Europe. In the months of January to May of this year (more recent comparison figures not yet available), the airline was once again one of the leading carriers in the comparison of 25 AEA (Association of European Airlines) members. Austrian Airlines was better by 5.5 percent than the AEA average in both departure and arrival punctuality.

Staff numbers at Austrian Airlines AG including its fully-consolidated subsidiaries on 30 June 2011 stood at 6,898 employees (30 June 2010: 7,557 employees.  Note: in the first quarter of 2011, Austrian Airlines began indicating its staff numbers in terms of “employees”, instead of “full-time employees” as before, so adopting the Lufthansa reporting method).

Traffic figures
In the first half-year of 2011, the total number of passengers carried stood at around 5.1 million, 1.9 percent above last year’s figure. The load factor (passenger load factor) fell by 3.4 percentage points to 70.8 percent, as capacity measured in Available Seat Kilometres (ASK) was raised by 4.2 percent but demand measured in Revenue Passenger Kilometres (RPK) fell by 0.6 percent.

On scheduled services, the number of passengers carried rose in the first half-year by 2.8 percent to more than 4.8 million passengers. In the Europe business segment, Austrian Airlines carried approximately 4.1 million passengers in the first half-year, 3.6 percent more than the figure for last year. The load factor rose by 1.1 percentage points to 68.6 percent. The figure for ASK rose by 2.7 percent. RPK rose by 4.3 percent.

In the Intercontinental business segment, Austrian Airlines carried around 775,800 passengers in the first half-year. This equates with a reduction of 1.2 percent on last year. The load factor fell by 7.7 percentage points to 72.5 percent. Austrian Airlines expanded its ASK by 9.7 percent. Its RPK fell by 0.8 percent.

In the Charter segment, Austrian Airlines reduced its ASK by 23.8 percent due to the restrictions on capacity set by the EU. The number of passengers fell by 13.3 percent to 244,500. The load factor fell by 2.6 percentage points to 71.7 percent. The figure for RPK fell by 26.5 percent.

Source = Austrian Airlines
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