“Results of Austrian Airlines for April-June 2015: Austrian Airlines Achieves Jump in Earnings in the Second Quarter”

Published on : Thursday, July 30, 2015

Austrian AirlinesIn 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.

 

Improved earnings but fewer passengers

Close to five million passengers flew with Austrian Airlines in the first six months of 2015, comprising a drop of 7.3 percent from the previous year. Flight offering measured in available seat kilometers (ASK) was slightly increased by 0.1 percent, due to the expansion of long-haul routes. Capacity utilization was down by 2.5 percentage points to 75.0 percent.

 

The total staff of the Austrian Airlines Group including its full-consolidated subsidiaries amounted to 6,019 employees at the balance sheet date of June 30, 2015 (June 30, 2014: 6,300 employees).

 

Although Austrian Airlines continues to boast a top performance with respect to reliability and punctuality, it had to report a slight deterioration compared to the previous year: Punctuality on departure was 90.1 percent in the first half of 2015 (H1 2014: 91.0 percent), where the punctuality on arrival equaled 89.2 percent (H1 2014: 89.9 percent). The regularity of operation reached a level of 99.0 percent (H1 2014: 99.1 percent). With this performance Austrian Airlines still ranks among the most punctual airlines in Europe. It is rated number one at the present time among all European AEA airlines with respect to both departures and arrivals.

 

Austrian Airlines also achieved top ratings for service quality at the renowned Skytrax – World Airline Awards 2015: In particular, Austrian Airlines was voted first in the category “Best Airline Staff Service in Europe” on both the ground and in the air. In addition, the national carrier took first place in the category “Best Business Class Catering“. All in all, Austrian Airlines is rated 13th in the ranking of the world’s best airlines.

 

Positive outlook for the entire year 2015

In spite of short-term flight cancellations, Austrian Airlines remains optimistic about its performance for the rest of 2015: “I expect further earnings-improving effects and a significant increase in our adjusted EBIT this year”, concludes CFO Heinz Lachinger.

 

Source:- Austrian Airlines

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