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Published on : Thursday, July 30, 2015
In spite of the crises in the East, Austrian Airlines generated clearly positive earnings of EUR 36 million in the second quarter of 2015. Due to the traditionally weak and loss-making first quarter, earnings before interest and taxes (EBIT) in the first half of 2015 totaled minus EUR 17 million (H1 2014: minus EUR 41 million). The reasons for the considerable improvement are higher proceeds and lower costs as a consequence of the restructuring. Lower fuel prices also had a positive impact. However, this effect was neutralized by an increase in technical expenses and added costs resulting from a stronger US dollar.
“Our performance reflects the strong focus on efficiency and profitability”, says Austrian Airlines CFO Heinz Lachinger. “We are gaining in altitude.”
Key indicators at a glance
Total operating revenue in the first half of 2015 was up 1.7 percent or EUR 17 million to EUR 1,030 million (H1 2014: EUR 1,013 million). At the same time, total operating expenditures could be further reduced by 0.6 percent or EUR 6 million to EUR 1,047 million (H1 2014: EUR 1,053 million). As a result, EBIT totaled minus EUR 17 million on June 30, 2015 (H1 2014: minus EUR 41 million). The second quarter of 2015 was positive, with EUR 36 million, clearly improved results compared to the prior-year quarter (Q2 2014: EUR 13 million).
Crisis regions in Europe and Middle East, good performance in North America
The crisis areas in the Ukraine and Russia negatively impact Austrian Airlines in its role as a specialist for Eastern Europe. Accordingly, the airline reported a significant decline in passenger volume in the region. The situation is similar in the Middle East. Flight service still cannot be resumed to profitable routes such as Tripoli or Baghdad. In contrast, the historic atomic energy agreement between Iran and the United Nations raises hope for a revival of trade and thus for passenger traffic between Austria and Iran. “We are currently taking a close look at Iran, and are ready to go with new destinations”, Lachinger says optimistically.
Austria’s national carrier is pleased with its long-haul routes to North America. The new routes of Chicago and Newark have been developing satisfactorily, both in terms of capacity utilization and earnings. Furthermore, the expanded offering to Washington, where the deployed Boeing 767 was replaced by a larger Boeing 777 aircraft, has been doing well. Starting in October Austrian Airlines will add Miami as a further North American destination in its flight schedule. Advance bookings to Miami are developing better than expected.