airberlin books solid results

Third quarter results make up for the first half-year – Indebtedness significantly lowered – Equity ratio improved – Capacity reduction due to air travel tax – Additional cost-saving measures

airberlin reached an operating profit (EBIT) of EUR 171.7 million for the third quarter of 2010; however, the accumulated figures for the first nine months of the year could have been better: The harsh winter and the flight cancellations caused by the volcanic ash cloud from Iceland reduced EBIT to EUR 44.8 mil- lion. As at 30 September 2010, the net result for the first nine months amounted to EUR -14.6 million.

Total revenue for the quarter reached EUR 1.241 billion, i.e. is a 5 percent in- crease over the corresponding quarter of the previous year. Due to the capaci- ty increase, yield decreased by 2.2 percent to EUR 103.93. Analogously, rev- enue per available seat kilometer decreased by 2.9 percent to 6.79 Eurocents.

Conversely, cost per available seat kilometer (ASK) for the first nine months of 2010 was lowered by 3.6 percent, in the third quarter even by 4.3 percent. Air Berlin PLC’s net indebtedness was significantly reduced, namely from EUR 574 million to EUR 438 million. This figure, however, also includes EUR 132 million for the first-time consolidation of the Austrian subsidiary, NIKI. The eq- uity ratio improved to 22 percent as compared to 20 percent in the correspond- ing quarter of the previous year.

Promising economic data and increasing consumer confidence encouraged airberlin’s Management to expand the fleet during the first nine months of the year. Seat capacity was increased by 4.9 percent, in the third quarter even by 9 percent. However, the air travel tax which will become effective as of Janu- ary 2011 is prompting the company to change its course. Since the charge is expected to amount to between EUR 160 and 170 million, capacity will be re- duced by 5 percent as of the beginning of the summer flight schedule 2011.

As airberlin’s CEO Joachim Hunold stated in Berlin on Thursday: “Although the economic conditions remain favorable, we are cautious with respect to the coming year. In my opinion, the fierce competition on some flight routes will make it impossible to pass on the air travel tax to the passengers in its entire- ty. Therefore, we will reduce our capacity by five percent, and reduce our fleet by seven aircraft, instead of carrying out the originally planned increase.”

airberlin is Germany’s second-largest airline company and currently has over 8,700 employees. In 2009 alone, airberlin received more than 10 awards for its service and quality. The modern fleet (including NIKI) encompasses 167 aircraft with an average age of five years, making it one of the youngest fleets in Europe. Due to their low kerosene consumption, airberlin’s modern jets contri- bute to a sustainable reduction of emissions in air transportation. airberlin is one of the major airlines in Europe and currently flies to 168 destinations in 40 countries (incl. NIKI). In 2009, the airline transported approximately 28 million passengers. airberlin has joined the global airline alliance, oneworld®. Full membership is scheduled for the beginning of 2012. Since November 2010, airberlin has been operating codeshare flights with American Airlines and Finnair.