La compagnia austriaca ha chiuso il 2007 con un utile netto di 3.3 milioni, contro i -129.9 milioni del 2006.
Ormai in Europa sono rimaste solo AZ e OA a perdere soldi. Ex baracconi come LX, SN, TP e persino SK e OS fanno utili in un anno come quello appena trascorso.
Financial result of Austrian Airlines Group for business year 2007
Summing up the results 2007, Austrian Chief Executive Officer Alfred Ötsch made the following statement: “For the Austrian Airlines Group, 2007 was a successful transitional year, a time when the company implemented a number of essential steps in its restructuring. The redimensioning of the long-haul segment produced a significant stabilisation in our business model, and strengthened us overall. This is reflected in the result. At EUR 39.1m, the adjusted EBIT was EUR 47.4m up on the figure for 2006. The greatest improvement for the Group was in the net result: after recording a position in 2006 of EUR –129.9m, 2007 saw us take our performance in this field back into positive figures for the first time in two years, with a result of EUR 3.3m. We shall continue to pursue our course this year, and emphasise our strengths: outstanding positioning in growth regions such as Central and Eastern Europe (CEE) and the Middle East, an excellent product and high quality. The introduction of the new Austrian Premium Service from summer 2008 onwards will set new standards for business passengers.”
Substantial improvement in result situation
The company succeeded in improving its EBIT from EUR -89.0m the previous year to EUR 25.6m in the report period 2007. This was primarily due to cost reductions achieved as a result of the closure of fuel-intensive, low-yield long-haul destinations featuring low levels of direct demand. At EUR 39.1m, EBIT adjusted to account for extraordinary effects (extraordinary effects such as the costs of the disposal of aircraft, exchange rate differentials, the result from disposals of assets and last year’s expenditure on redimensioning long-haul) increased sharply, rising by EUR 47.4m compared to the previous year. This is the first time since 2004 that the figure has been positive.
The financial result of EUR –35.7m also improved compared to the figure for the previous year, rising by EUR 13.4m, from EUR –49.1m in 2006. This was as a result of the increase in interest returns. The Group accomplished its greatest improvement in the net result. After deferred and effective taxes are deducted, the net result in the report period, at EUR 3.3m, returned to positive figures for the first time in two years (2006: –129.9m). This represents an improvement of EUR 133.2m.
Significant increase in yields
The change in the traffic mix towards the short- and medium-haul segment and the reduction in the ASK-intensive long-haul segment produced a sharp increase in those key indicators related to ASK in the report period – in both yields and unit costs. The closure of lower-yield long-haul destinations in favour of higher-yield short- and medium-haul routes also produced a positive structural effect. As a result, 2007 saw the Group succeed in increasing its yields by 13.6% on balance (operating revenue per ASK), while unit costs (operating expenses per ASK) only rose by 11.5%. The earning power of the Group was clearly strengthened as a result.
Revenue and operating revenue fall slightly
In line with the reduction in available seat kilometers (ASK) of 15.4% which affected mainly the long-haul segment while there was a strong growth in the core markets (short- and medium haul segment), the flight revenue of the Austrian Airlines Group fell at a slower rate than production in the report period, decreasing by just 3.7% to EUR 2,368.6m (2006 figure: EUR 2,458.8m). A more buoyant market environment, a slight increase in passenger volume and the fuel surcharges levied by the Group almost completely offset the reduction in flight revenue from charter and cargo business caused by the reduction in capacity on long-haul flights. Other revenue fell by EUR 34.4m to EUR 100.0m, primarily due to the sale of our Travel Value Wien (TVW) subsidiary. In contrast, Other income rose by EUR 12.7m to EUR 82.3m. This is overwhelmingly due to the increase in the result from asset sales and from income from the release of provisions. On this basis, operating revenue overall fell by 4.2%, to EUR 2,550.9m.
Sharp reduction in operating expenses
Fuel expenditure is one of the core cost factors for the flight operations of the Austrian Airlines Group. While this position has risen in recent years, often significantly, due to the price increases on world markets, the Group managed to noticeably relieve this trend during the report period, due primarily to the restructuring measures taken. The Personnel expenses of the Group also fell as a result of the employee cutbacks implemented during the redimensioning of long-haul activities. In total, the operating expenses of the Group fell by 8.2% to EUR 2,525.3m, a substantially greater decrease than that in operating revenue. While Expenses for materials fell overall by 7.3% to EUR 1,538.6m in the report period, fuel expenditure was down by 16.7% or EUR 88.3m, due to the cutback in production on long-haul routes. Despite considerable strains as a result of the increases in kerosene prices, this fall exceeded even the size of the cutback in production. The share of total expenditure accounted for by fuel costs also fell as a result in the report period, decreasing by 1.8 percentage points to 17.5%.
The average kerosene price was USD 709/ton in the report period 2007, an increase of 9.8% on the level for the previous year. Looked at over the year as a whole, the price of kerosene at the beginning of the report period was around 580 USD/ton. The kerosene price rose continuously in the first and second quarters, reaching the price level contained in the internal planning assumptions of the Group, 700 USD/ton, in the third quarter. The price of kerosene rose more sharply still in Q4, eventually hitting a record high of almost 950 USD/ton. There was no significant relaxation in this upward trend towards the end of the year, with the kerosene price at around 912 USD/ton on 31 December 2007. In February 2007, the Austrian Airlines Group launched the staged development of a fuel hedging programme as planned. In an effort to achieve a more targeted risk spread, it aims to hedge up to 20% of the company’s annual kerosene requirement and a levelling-off or stabilisation of kerosene costs in the medium term.
In an effort to compensate in part for the additional expenditure on kerosene, the Austrian Airlines Group – in common with the majority of its competitor airlines – introduced fuel surcharges in stages from May 2004 onwards, which are reported as additional revenue in the flight revenue position. These surcharges could only cover a part of the additional costs, however.
Despite paying advances under the terms of the collective agreement and concluding negotiations over the collective agreement with commercial-technical and cabin staff, the personnel expenses of the Austrian Airlines Group fell by 13.8% in the report period, to EUR 527.1m. This reduction results primarily from the loss of personnel provisions created the preceding year to cover the cut in the number of employees due to the long-haul restructuring.
At EUR 189.5m, other expenses of the Group were 1.2% higher than the previous year. This item was influenced by an advertising offensive implemented in the report period. By contrast, depreciation and amortisation fell from EUR 293.8m in 2006 to EUR 270.1m in the report period. This was primarily due to aircraft sales, which affected long-haul Airbus aircraft sold as part of the fleet harmonisation, and impairments of EUR 9.2m that only accrued last year.
Cash flow from operating activities remains strong
Despite the improvement in the result before taxes, the cash flow from operating activities fell from EUR 360.2m to EUR 276.1m, due primarily to the reduction of changes of working capital; cutbacks in provisions compared to the previous year and in liabilities, due mainly to severance payments, also played a role here.
Despite its strategy being clearly oriented towards growth in CEE, the Austrian Airlines Group continues to pursue a restrictive programme of investment. The only aircraft to be newly incorporated into the fleet in 2007 was a Boeing 777-200ER, delivery of which had already been agreed in an order dating back to 2005. As a result, disbursements (investments) from the purchase of tangible and intangible assets increased in the financial year 2007 by 8.2% to EUR 210.6m (2006 figure: EUR 194.7m).
Structural increase in unit costs
The change in the traffic mix and reduction in available seat kilometers (ASK) produced a relative increase in unit costs in 2007. As a result, the Austrian Airlines Group was unable to continue reducing its unit costs for the present, which had previously been declining consistently since 2001. Since yields were rising at the same time, however – to an even greater extent, in fact –this increase did not impact negatively on the profitability of the Group. In concrete terms, unit costs (total adjusted operating expenses in relation to ASK) increased year-on-year by 11.5% to 9.43 ct/ASK (2006 figure: 8.46 ct/ASK). Employee productivity (measured in flight revenue per employee) improved by 2.9% in the report period as a result of the fact that the fall in flight revenue caused by the production cutbacks on long-haul routes was lower than the reduction in the number of employees.
Liquidity remains solid
At the end of 2007 cash and cash equivalents stood at EUR 219.3m (2006: EUR 516.1m) due to planned repayments of liabilities, cash out from the restructuring programme as well as a shift towards disposable securities.
Reduction in Net Gearing, increase in equity ratio
The steady reduction of liabilities and improvement of balance sheet structure continue to be core priorities for the Austrian Airlines Group. As a result of the repayment of long-term liabilities, the net debt of the Group fell in the past financial year by EUR 33.0m to EUR 982.9m. In total, interest-bearing liabilities fell by EUR 329.8m in the report period, to EUR 1,202.2m. The level of Net Gearing (net debt in relation to shareholders’ equity) also fell thanks to the reduction in long-term liabilities, from 129.4% to 125.0%.
As at the balance sheet date of 31 December 2007, the equity ratio of the Austrian Airlines Group, at 27.7%, was above the comparable figure for the end of 2006 (24.5%) due to the consistent reduction in liabilities in the report period.
Expansion of specialist role for CEE and Middle East
The scheduled flights of the Group operate under the Austrian and Austrian arrows brands, while the charter flight product is marketed under the “Lauda Air – The Austrian way to holidays” brand. Irrespective of the sales brand in question, production revenue in both the scheduled services and charter segments is generated by the two Production Companies of Austrian, created following the merger of the flight operations of Austrian and Lauda Air, and Austrian arrows (Tyrolean Airways). Since the demand curves for scheduled and charter traffic are broadly complementary when considered on weekly and annual bases, this structure allows for better management and optimised utilisation of necessary capacities. This is particularly true at weekends and during holiday periods.
Scheduled traffic
As the key business segment of the Austrian Airlines Group, scheduled traffic contributed EUR 2,152.1m to revenue in the report period 2007. As a result of the production cutbacks in the long-haul segment, this figure is EUR 45.0m, or 2.0%, below that for the previous year (2006: EUR 2,197.1m). With an 87.2% share of revenue, scheduled business undoubtedly remains the core segment of the Group (2006: 84.7%).
The Austrian Airlines Group continued to pursue its Focus East strategy in 2007 by expanding its connections into the Central and Eastern Europe region. To this end, the Group incorporated the cities of Burgas, Astana and Tallinn (the latter in cooperation with Estonian Air) into its route network. In addition to opening up new destinations into the network, Austrian continued to expand its product on existing connections. The Group increased its flight volume to destinations including Sofia, Bucharest, Donetsk and Belgrade, as well as capacity to St. Petersburg and Krasnodar in the Russian Federation. The Austrian Airlines Group sought to expand its incoming connections to Innsbruck in the winter season, offering direct flights on routes from Moscow, St. Petersburg and Kiev in particular. In the Middle East geographical segment, the Group strengthened its flight schedule to Iran and Cyprus in 2007, with the number of flights to both Tehran and Larnaca increased in the summer. In October of last year, the Austrian Airlines Group launched a new service to London City Airport to complement its connections to London Heathrow, enabling the company to offer an even more extensive and attractive schedule of flights to the city. The Group also succeeded in strengthening its presence in Italy in 2007: capacity to Rome was expanded in cooperation with Air One, and Naples was newly incorporated into the schedule. The Group’s service to Germany was also improved in cooperation with Lufthansa with a number of measures including a connection from Graz to Munich and Stuttgart, and the reintegration into the schedule of a service from Linz to Munich. The redimensioning of long-haul capacity, first launched the preceding year, was implemented according to plan in 2007. The low-revenue destinations of Shanghai, Phuket, Mauritius, Kathmandu and the Australian routes to Sydney and Melbourne were all removed from the schedule. In contrast, the Group newly incorporated Chicago into its route network as a new destination.
The Austrian Airlines Group continued to expand the medium-haul route capacity departing from its Vienna hub in the report period, whilst at the same time successfully implementing the redimensioning of long-haul services launched in 2006. With around 53% of the total, the Austrian Airlines Group has by far the largest share of passenger volume passing through Vienna controlled by any one carrier. The share of total scheduled passenger volume of the Group attributable to transfer traffic was around 60% in the report period. The Austrian Airlines Group is accelerating its previous strategy by continuing to concentrate strongly on secondary market destinations with medium-sized passenger volumes, for which competition is less intense, and the bundling of the resultant streams of transfer traffic. Routes of this type account for a steadily rising share of the total, while the share contributed by primary transfer traffic, for which competition is more intense, is shrinking. In 2007, 66% of the Group’s total transfer volume was already attributable to secondary markets (2006: 62%).
Charter traffic
In an effort to improve its profitability, the Austrian Airlines Group made targeted capacity reductions in both long-haul and short- and medium-haul business in the financial year 2007. In this context, four fewer aircraft were deployed in the charter segment in the report period than the year before. Two of these were transferred to the scheduled segment, and two were in use with Slovak Airlines. The Group operated 390 different routes to 215 different destinations in the charter segment in the past year, with revenue 17.3% lower than the figure for the preceding year, at EUR 216.5m. Demand in the charter field remained stable overall despite challenging market conditions. Despite the production cutbacks, the most important destinations were Greece, Turkey, Spain and Egypt. On the route to Egypt, it even proved possible to increase revenue compared to the preceding year. The EBIT of the segment improved from EUR –10.6m to EUR 2.0m, a rise of EUR 12.6m. The share of Group revenue accounted for by the charter segment fell by 1.3 percentage points to 8.8% (2006 figure: 10.1%).
Revenue from the complementary services segment, which includes services provided by the subsidiary companies of the Austrian Airlines Group, third-party handling at Vienna Airport and the leasing of aircraft, fell to EUR 100.0m (2006 figure EUR 134.4m), due mainly to the impact of the sale of the Travel Value Wien (TVW) subsidiary. The share of Group revenue accounted for by this segment fell to 4.0% (2006 figure: 5.2%).
Fleet development
Long-haul
The Austrian Airlines Group disposed of the last of its long-haul Airbus fleet in 2007 in the course of its programme of restructuring. The company leased out one Airbus A330-200 and two Airbus A340-300 long-term, sold two Airbus A330-200 and returned one Airbus A330-200 to the lessor. For the present time, these changes brought to an end the fleet harmonisation programme launched following the merger of Austrian Airlines, Lauda Air, Tyrolean Airways and Rheintalflug. The programme was begun in 2001 due to the large number of different fleet families in use at the Group at the time. The Austrian Airlines Group has steadily removed the oldest, least efficient aircraft from its fleet, and by the end of 2007 was using just seven, highly efficient fleet families and their respective sub-types. Combined with the phasing out of unprofitable routes, fleet harmonisation has contributed massively to the improvement in the Group’s long-haul result. The long-haul fleet is now the optimum size to meet the needs of the Group, and no plans are in place to increase the segment at the present time.
Short- and medium-haul
The report period saw the Group sell its final Canadair CRJ100 in another step towards harmonisation of the regional fleet. Only the CRJ200 type will continue to be used. Of the 15 Fokker 100 aircraft acquired from 2004 onwards, 14 were already in service as at the 2007 balance sheet date. Termination of the flight operations of Slovak Airlines also led to removal of the last Boeing 737-300 Classic from operational service with the Austrian Airlines Group. The Boeing 737-300, which the Austrian Airlines Group owned, was sold in 2007.
In the medium-term, the Group is seeking to reduce the size of its Canadair CRJ fleet in order to partially replace these 50-seater jets with aircraft with 80-100 seats. There will also be some regrouping within the charter fleet. This segment should be covered by one Airbus A321-200 and seven Boeing 737-800 (six in the winter) in the planning period.
http://www.aua.com/it/ita/austrian/news/Press+Archive/default.htm?artGuid={DEBFF91C-5927-42B5-9309-30085B19A4B9}
Ormai in Europa sono rimaste solo AZ e OA a perdere soldi. Ex baracconi come LX, SN, TP e persino SK e OS fanno utili in un anno come quello appena trascorso.
Financial result of Austrian Airlines Group for business year 2007
Summing up the results 2007, Austrian Chief Executive Officer Alfred Ötsch made the following statement: “For the Austrian Airlines Group, 2007 was a successful transitional year, a time when the company implemented a number of essential steps in its restructuring. The redimensioning of the long-haul segment produced a significant stabilisation in our business model, and strengthened us overall. This is reflected in the result. At EUR 39.1m, the adjusted EBIT was EUR 47.4m up on the figure for 2006. The greatest improvement for the Group was in the net result: after recording a position in 2006 of EUR –129.9m, 2007 saw us take our performance in this field back into positive figures for the first time in two years, with a result of EUR 3.3m. We shall continue to pursue our course this year, and emphasise our strengths: outstanding positioning in growth regions such as Central and Eastern Europe (CEE) and the Middle East, an excellent product and high quality. The introduction of the new Austrian Premium Service from summer 2008 onwards will set new standards for business passengers.”
Substantial improvement in result situation
The company succeeded in improving its EBIT from EUR -89.0m the previous year to EUR 25.6m in the report period 2007. This was primarily due to cost reductions achieved as a result of the closure of fuel-intensive, low-yield long-haul destinations featuring low levels of direct demand. At EUR 39.1m, EBIT adjusted to account for extraordinary effects (extraordinary effects such as the costs of the disposal of aircraft, exchange rate differentials, the result from disposals of assets and last year’s expenditure on redimensioning long-haul) increased sharply, rising by EUR 47.4m compared to the previous year. This is the first time since 2004 that the figure has been positive.
The financial result of EUR –35.7m also improved compared to the figure for the previous year, rising by EUR 13.4m, from EUR –49.1m in 2006. This was as a result of the increase in interest returns. The Group accomplished its greatest improvement in the net result. After deferred and effective taxes are deducted, the net result in the report period, at EUR 3.3m, returned to positive figures for the first time in two years (2006: –129.9m). This represents an improvement of EUR 133.2m.
Significant increase in yields
The change in the traffic mix towards the short- and medium-haul segment and the reduction in the ASK-intensive long-haul segment produced a sharp increase in those key indicators related to ASK in the report period – in both yields and unit costs. The closure of lower-yield long-haul destinations in favour of higher-yield short- and medium-haul routes also produced a positive structural effect. As a result, 2007 saw the Group succeed in increasing its yields by 13.6% on balance (operating revenue per ASK), while unit costs (operating expenses per ASK) only rose by 11.5%. The earning power of the Group was clearly strengthened as a result.
Revenue and operating revenue fall slightly
In line with the reduction in available seat kilometers (ASK) of 15.4% which affected mainly the long-haul segment while there was a strong growth in the core markets (short- and medium haul segment), the flight revenue of the Austrian Airlines Group fell at a slower rate than production in the report period, decreasing by just 3.7% to EUR 2,368.6m (2006 figure: EUR 2,458.8m). A more buoyant market environment, a slight increase in passenger volume and the fuel surcharges levied by the Group almost completely offset the reduction in flight revenue from charter and cargo business caused by the reduction in capacity on long-haul flights. Other revenue fell by EUR 34.4m to EUR 100.0m, primarily due to the sale of our Travel Value Wien (TVW) subsidiary. In contrast, Other income rose by EUR 12.7m to EUR 82.3m. This is overwhelmingly due to the increase in the result from asset sales and from income from the release of provisions. On this basis, operating revenue overall fell by 4.2%, to EUR 2,550.9m.
Sharp reduction in operating expenses
Fuel expenditure is one of the core cost factors for the flight operations of the Austrian Airlines Group. While this position has risen in recent years, often significantly, due to the price increases on world markets, the Group managed to noticeably relieve this trend during the report period, due primarily to the restructuring measures taken. The Personnel expenses of the Group also fell as a result of the employee cutbacks implemented during the redimensioning of long-haul activities. In total, the operating expenses of the Group fell by 8.2% to EUR 2,525.3m, a substantially greater decrease than that in operating revenue. While Expenses for materials fell overall by 7.3% to EUR 1,538.6m in the report period, fuel expenditure was down by 16.7% or EUR 88.3m, due to the cutback in production on long-haul routes. Despite considerable strains as a result of the increases in kerosene prices, this fall exceeded even the size of the cutback in production. The share of total expenditure accounted for by fuel costs also fell as a result in the report period, decreasing by 1.8 percentage points to 17.5%.
The average kerosene price was USD 709/ton in the report period 2007, an increase of 9.8% on the level for the previous year. Looked at over the year as a whole, the price of kerosene at the beginning of the report period was around 580 USD/ton. The kerosene price rose continuously in the first and second quarters, reaching the price level contained in the internal planning assumptions of the Group, 700 USD/ton, in the third quarter. The price of kerosene rose more sharply still in Q4, eventually hitting a record high of almost 950 USD/ton. There was no significant relaxation in this upward trend towards the end of the year, with the kerosene price at around 912 USD/ton on 31 December 2007. In February 2007, the Austrian Airlines Group launched the staged development of a fuel hedging programme as planned. In an effort to achieve a more targeted risk spread, it aims to hedge up to 20% of the company’s annual kerosene requirement and a levelling-off or stabilisation of kerosene costs in the medium term.
In an effort to compensate in part for the additional expenditure on kerosene, the Austrian Airlines Group – in common with the majority of its competitor airlines – introduced fuel surcharges in stages from May 2004 onwards, which are reported as additional revenue in the flight revenue position. These surcharges could only cover a part of the additional costs, however.
Despite paying advances under the terms of the collective agreement and concluding negotiations over the collective agreement with commercial-technical and cabin staff, the personnel expenses of the Austrian Airlines Group fell by 13.8% in the report period, to EUR 527.1m. This reduction results primarily from the loss of personnel provisions created the preceding year to cover the cut in the number of employees due to the long-haul restructuring.
At EUR 189.5m, other expenses of the Group were 1.2% higher than the previous year. This item was influenced by an advertising offensive implemented in the report period. By contrast, depreciation and amortisation fell from EUR 293.8m in 2006 to EUR 270.1m in the report period. This was primarily due to aircraft sales, which affected long-haul Airbus aircraft sold as part of the fleet harmonisation, and impairments of EUR 9.2m that only accrued last year.
Cash flow from operating activities remains strong
Despite the improvement in the result before taxes, the cash flow from operating activities fell from EUR 360.2m to EUR 276.1m, due primarily to the reduction of changes of working capital; cutbacks in provisions compared to the previous year and in liabilities, due mainly to severance payments, also played a role here.
Despite its strategy being clearly oriented towards growth in CEE, the Austrian Airlines Group continues to pursue a restrictive programme of investment. The only aircraft to be newly incorporated into the fleet in 2007 was a Boeing 777-200ER, delivery of which had already been agreed in an order dating back to 2005. As a result, disbursements (investments) from the purchase of tangible and intangible assets increased in the financial year 2007 by 8.2% to EUR 210.6m (2006 figure: EUR 194.7m).
Structural increase in unit costs
The change in the traffic mix and reduction in available seat kilometers (ASK) produced a relative increase in unit costs in 2007. As a result, the Austrian Airlines Group was unable to continue reducing its unit costs for the present, which had previously been declining consistently since 2001. Since yields were rising at the same time, however – to an even greater extent, in fact –this increase did not impact negatively on the profitability of the Group. In concrete terms, unit costs (total adjusted operating expenses in relation to ASK) increased year-on-year by 11.5% to 9.43 ct/ASK (2006 figure: 8.46 ct/ASK). Employee productivity (measured in flight revenue per employee) improved by 2.9% in the report period as a result of the fact that the fall in flight revenue caused by the production cutbacks on long-haul routes was lower than the reduction in the number of employees.
Liquidity remains solid
At the end of 2007 cash and cash equivalents stood at EUR 219.3m (2006: EUR 516.1m) due to planned repayments of liabilities, cash out from the restructuring programme as well as a shift towards disposable securities.
Reduction in Net Gearing, increase in equity ratio
The steady reduction of liabilities and improvement of balance sheet structure continue to be core priorities for the Austrian Airlines Group. As a result of the repayment of long-term liabilities, the net debt of the Group fell in the past financial year by EUR 33.0m to EUR 982.9m. In total, interest-bearing liabilities fell by EUR 329.8m in the report period, to EUR 1,202.2m. The level of Net Gearing (net debt in relation to shareholders’ equity) also fell thanks to the reduction in long-term liabilities, from 129.4% to 125.0%.
As at the balance sheet date of 31 December 2007, the equity ratio of the Austrian Airlines Group, at 27.7%, was above the comparable figure for the end of 2006 (24.5%) due to the consistent reduction in liabilities in the report period.
Expansion of specialist role for CEE and Middle East
The scheduled flights of the Group operate under the Austrian and Austrian arrows brands, while the charter flight product is marketed under the “Lauda Air – The Austrian way to holidays” brand. Irrespective of the sales brand in question, production revenue in both the scheduled services and charter segments is generated by the two Production Companies of Austrian, created following the merger of the flight operations of Austrian and Lauda Air, and Austrian arrows (Tyrolean Airways). Since the demand curves for scheduled and charter traffic are broadly complementary when considered on weekly and annual bases, this structure allows for better management and optimised utilisation of necessary capacities. This is particularly true at weekends and during holiday periods.
Scheduled traffic
As the key business segment of the Austrian Airlines Group, scheduled traffic contributed EUR 2,152.1m to revenue in the report period 2007. As a result of the production cutbacks in the long-haul segment, this figure is EUR 45.0m, or 2.0%, below that for the previous year (2006: EUR 2,197.1m). With an 87.2% share of revenue, scheduled business undoubtedly remains the core segment of the Group (2006: 84.7%).
The Austrian Airlines Group continued to pursue its Focus East strategy in 2007 by expanding its connections into the Central and Eastern Europe region. To this end, the Group incorporated the cities of Burgas, Astana and Tallinn (the latter in cooperation with Estonian Air) into its route network. In addition to opening up new destinations into the network, Austrian continued to expand its product on existing connections. The Group increased its flight volume to destinations including Sofia, Bucharest, Donetsk and Belgrade, as well as capacity to St. Petersburg and Krasnodar in the Russian Federation. The Austrian Airlines Group sought to expand its incoming connections to Innsbruck in the winter season, offering direct flights on routes from Moscow, St. Petersburg and Kiev in particular. In the Middle East geographical segment, the Group strengthened its flight schedule to Iran and Cyprus in 2007, with the number of flights to both Tehran and Larnaca increased in the summer. In October of last year, the Austrian Airlines Group launched a new service to London City Airport to complement its connections to London Heathrow, enabling the company to offer an even more extensive and attractive schedule of flights to the city. The Group also succeeded in strengthening its presence in Italy in 2007: capacity to Rome was expanded in cooperation with Air One, and Naples was newly incorporated into the schedule. The Group’s service to Germany was also improved in cooperation with Lufthansa with a number of measures including a connection from Graz to Munich and Stuttgart, and the reintegration into the schedule of a service from Linz to Munich. The redimensioning of long-haul capacity, first launched the preceding year, was implemented according to plan in 2007. The low-revenue destinations of Shanghai, Phuket, Mauritius, Kathmandu and the Australian routes to Sydney and Melbourne were all removed from the schedule. In contrast, the Group newly incorporated Chicago into its route network as a new destination.
The Austrian Airlines Group continued to expand the medium-haul route capacity departing from its Vienna hub in the report period, whilst at the same time successfully implementing the redimensioning of long-haul services launched in 2006. With around 53% of the total, the Austrian Airlines Group has by far the largest share of passenger volume passing through Vienna controlled by any one carrier. The share of total scheduled passenger volume of the Group attributable to transfer traffic was around 60% in the report period. The Austrian Airlines Group is accelerating its previous strategy by continuing to concentrate strongly on secondary market destinations with medium-sized passenger volumes, for which competition is less intense, and the bundling of the resultant streams of transfer traffic. Routes of this type account for a steadily rising share of the total, while the share contributed by primary transfer traffic, for which competition is more intense, is shrinking. In 2007, 66% of the Group’s total transfer volume was already attributable to secondary markets (2006: 62%).
Charter traffic
In an effort to improve its profitability, the Austrian Airlines Group made targeted capacity reductions in both long-haul and short- and medium-haul business in the financial year 2007. In this context, four fewer aircraft were deployed in the charter segment in the report period than the year before. Two of these were transferred to the scheduled segment, and two were in use with Slovak Airlines. The Group operated 390 different routes to 215 different destinations in the charter segment in the past year, with revenue 17.3% lower than the figure for the preceding year, at EUR 216.5m. Demand in the charter field remained stable overall despite challenging market conditions. Despite the production cutbacks, the most important destinations were Greece, Turkey, Spain and Egypt. On the route to Egypt, it even proved possible to increase revenue compared to the preceding year. The EBIT of the segment improved from EUR –10.6m to EUR 2.0m, a rise of EUR 12.6m. The share of Group revenue accounted for by the charter segment fell by 1.3 percentage points to 8.8% (2006 figure: 10.1%).
Revenue from the complementary services segment, which includes services provided by the subsidiary companies of the Austrian Airlines Group, third-party handling at Vienna Airport and the leasing of aircraft, fell to EUR 100.0m (2006 figure EUR 134.4m), due mainly to the impact of the sale of the Travel Value Wien (TVW) subsidiary. The share of Group revenue accounted for by this segment fell to 4.0% (2006 figure: 5.2%).
Fleet development
Long-haul
The Austrian Airlines Group disposed of the last of its long-haul Airbus fleet in 2007 in the course of its programme of restructuring. The company leased out one Airbus A330-200 and two Airbus A340-300 long-term, sold two Airbus A330-200 and returned one Airbus A330-200 to the lessor. For the present time, these changes brought to an end the fleet harmonisation programme launched following the merger of Austrian Airlines, Lauda Air, Tyrolean Airways and Rheintalflug. The programme was begun in 2001 due to the large number of different fleet families in use at the Group at the time. The Austrian Airlines Group has steadily removed the oldest, least efficient aircraft from its fleet, and by the end of 2007 was using just seven, highly efficient fleet families and their respective sub-types. Combined with the phasing out of unprofitable routes, fleet harmonisation has contributed massively to the improvement in the Group’s long-haul result. The long-haul fleet is now the optimum size to meet the needs of the Group, and no plans are in place to increase the segment at the present time.
Short- and medium-haul
The report period saw the Group sell its final Canadair CRJ100 in another step towards harmonisation of the regional fleet. Only the CRJ200 type will continue to be used. Of the 15 Fokker 100 aircraft acquired from 2004 onwards, 14 were already in service as at the 2007 balance sheet date. Termination of the flight operations of Slovak Airlines also led to removal of the last Boeing 737-300 Classic from operational service with the Austrian Airlines Group. The Boeing 737-300, which the Austrian Airlines Group owned, was sold in 2007.
In the medium-term, the Group is seeking to reduce the size of its Canadair CRJ fleet in order to partially replace these 50-seater jets with aircraft with 80-100 seats. There will also be some regrouping within the charter fleet. This segment should be covered by one Airbus A321-200 and seven Boeing 737-800 (six in the winter) in the planning period.
http://www.aua.com/it/ita/austrian/news/Press+Archive/default.htm?artGuid={DEBFF91C-5927-42B5-9309-30085B19A4B9}