Austrian Airlines Group has delivered results for the first half year 2008 with positive development in the second quarter despite challenging market environment.
Austrian Chief Executive Officer Alfred ?-tsch commenting on the result: “An expected positive development of the financial performance was seen in the second quarter 2008, EBIT improved in despite the difficult business environment, but the second quarter of 2008 was not burdened by the negative effects to the same extent as the first quarter, e.g. Easter, and profited from the positive effects attributable to EURO 2008. Flight revenue and operating revenue increased, net profit in the second quarter rose from EUR 7.7m to EUR 11.7m, despite the difficult business environment, confirming the need for us to systematically intensify our clearly-defined strategic focus. A positive development with passenger increase in the Focus East area (CEE and Middle East) was seen in the first half-year 2008. Flight revenues were stable in the period January-June 2008, at EUR 1,142.5m, and a positive EBITDAR of 138.9m was generated. However, due to the clearly negative business results in the first quarter of 2008 and the distorted year-on-year comparison, adjusted EBIT amounted to EUR -16.9m in the first half-year 2008, down from EUR 2.4m in the same period of 2007. EBIT was EUR -24.6m in the first half-year, compared to EUR 10.1m in the previous year. The net result for the first half-year 2008 was down on previous year figure and totalled EUR-48.7m.
The average increase of 73.7% in the fuel price compared to the previous year, the ongoing subprime mortgage crisis and economic slowdown, as well as the high density of low cost carriers at the hub Vienna and very aggressive pricing policies of some have combined to make 2008 an extremely challenging year. At present we can confirm our earlier forecast, and expect a net result for the 2008 financial year ranging from EUR -70 million to EUR -90 million. Against the backdrop of these challenging market conditions, we can build upon our successful strategic positioning. Our Focus East strategy is an important factor of stability, due to the fact that the Central and Eastern European markets are currently less susceptible to cyclical trends. The reduction of net debt and gearing in recent years as well as our well-positioned fleet provide a solid basis for the future. The geographical location of our Vienna hub compared to other airports such as Frankfurt and Munich enables us to reap the benefits of shorter flight times to Eastern Europe, and the related competitive advantages in respect to costs and quality.”