Austrian suffers record loss, looks to stay afloat until LH rescue
Monday March 16, 2009
Austrian Airlines Group executive board members Andreas Bierwirth and Peter Malanik said Friday in Vienna that the company does "not have enough reserves to get through the crisis" that helped push it to a €429.5 million ($550.3 million) loss in 2008, a reversal from the €3.3 million profit in 2007 and the worst result in its history.
AAG, which is awaiting approval of its acquisition by Lufthansa, must create a cost base for interim survival before putting itself in position "to be able to fit in enough to compete with the LH Group's airlines, so we again can reach the strength to generate our own capital costs," Malanik explained. AAG already has implemented a €225 million savings program that may be extended if necessary.
Full-year revenue fell 0.8% to €2.53 billion while expenses climbed 13.3% to €2.84 billion. AAG's operating loss of €312.1 million compared to a €42.1 million profit in 2007. Passenger numbers slipped 0.9% to 10.7 million and load factor was down 0.7 point to 74.4%. Flight revenue fell only "slightly" and operating unit revenue rose 5.1%, the company said, but a 31.5% surge in fuel costs to €581 million, plus one-time charges of €334.4 million owing largely to aircraft depreciation, were a "significant burden" on the result.
The carrier continued enhancing its presence in Central and Eastern Europe and the Middle East, launched its premium A320 service and said it would continue to concentrate on promoting transit traffic through a focus on secondary markets with less competition. Transfer passengers comprised 60% of the total last year, while one-third of all passengers traveled to/from Eastern Europe.
Malanik and Bierwirth said Vienna eventually will be integrated into Lufthansa's hub network and that the company is hoping to enhance its long-haul profile through increased sales efforts in foreign destinations and schedule optimization between Austria and Europe. OS expects annual synergies of €80 million once it joins Lufthansa Group.
The carrier currently operates 89 aircraft, having phased out six smaller RJs and temporarily grounded two A320s. "We would be able to park more than 10% of our total fleet if necessary," Bierwirth told ATWOnline.
by Kurt Hofmann and Brian Straus
ATWOnline
Monday March 16, 2009
Austrian Airlines Group executive board members Andreas Bierwirth and Peter Malanik said Friday in Vienna that the company does "not have enough reserves to get through the crisis" that helped push it to a €429.5 million ($550.3 million) loss in 2008, a reversal from the €3.3 million profit in 2007 and the worst result in its history.
AAG, which is awaiting approval of its acquisition by Lufthansa, must create a cost base for interim survival before putting itself in position "to be able to fit in enough to compete with the LH Group's airlines, so we again can reach the strength to generate our own capital costs," Malanik explained. AAG already has implemented a €225 million savings program that may be extended if necessary.
Full-year revenue fell 0.8% to €2.53 billion while expenses climbed 13.3% to €2.84 billion. AAG's operating loss of €312.1 million compared to a €42.1 million profit in 2007. Passenger numbers slipped 0.9% to 10.7 million and load factor was down 0.7 point to 74.4%. Flight revenue fell only "slightly" and operating unit revenue rose 5.1%, the company said, but a 31.5% surge in fuel costs to €581 million, plus one-time charges of €334.4 million owing largely to aircraft depreciation, were a "significant burden" on the result.
The carrier continued enhancing its presence in Central and Eastern Europe and the Middle East, launched its premium A320 service and said it would continue to concentrate on promoting transit traffic through a focus on secondary markets with less competition. Transfer passengers comprised 60% of the total last year, while one-third of all passengers traveled to/from Eastern Europe.
Malanik and Bierwirth said Vienna eventually will be integrated into Lufthansa's hub network and that the company is hoping to enhance its long-haul profile through increased sales efforts in foreign destinations and schedule optimization between Austria and Europe. OS expects annual synergies of €80 million once it joins Lufthansa Group.
The carrier currently operates 89 aircraft, having phased out six smaller RJs and temporarily grounded two A320s. "We would be able to park more than 10% of our total fleet if necessary," Bierwirth told ATWOnline.
by Kurt Hofmann and Brian Straus
ATWOnline
