Austrian Airlines Improves Operating Results by EUR 2 million

Airline reduces losses in the winter season from minus EUR 56 million to minus EUR 54 million
Crises in Ukraine and Middle East negatively impact operating revenues
Austrian Airlines confirms its outlook to improve operating results in 2014

The financial indicators for Austrian Airlines in the traditionally weak winter-related first quarter of the year 2014 indicate that the company has made a little progress in its return to the path of profitability. Although the crises in the Middle East, Russia and Ukraine significantly pushed down operating revenues, the largest domestic airline succeeded in improving its operating results by EUR 2 million in the first quarter of 2014 compared to the prior-year period. Accordingly, Austrian Airlines posted an operating loss of minus EUR 54 million in the first three months of the year (Q1 2013: minus EUR 56 million).

“Unfortunately we had to cancel our profitable flights to Tripoli and Baghdad. Due to the tense political situation we also cut down on flight service to Ukraine“, states CEO Jaan Albrecht. “But at the same time, we managed to further reduce costs by seven percent“, he adds.

Key figures in detail
Total operating revenues generated by Austrian Airlines amounted to EUR 403 million in the period January to March 2014. This comprises a decline of 5.4 percent from the comparable figure of EUR 426 million in the previous year. However, operating expenditures were down 7.4 percent to EUR 476 million from EUR 514 million in the first quarter of 2013. This is a clear sign that the restructuring measures have a positive impact on the cost situation. The operating results in the first quarter of 2014 totaled minus EUR 54 million, a rise of 3.6 percent or EUR 2 million from the prior-year quarter. This improvement was achieved both by easing the pressure on the cost side as well as by the reduced burden on earnings attributable to an adjustment in the airline’s depreciation policy.

Improved capacity utilization of aircraft
Austrian Airlines carried 2.2 million passengers in the first three months of the year, comprising a drop of 2.2 percent in a year-on-year comparison. Capacity in available seat kilometers (ASK) was increased by 0.5 percent, whereas revenue passenger kilometers (RPK) rose disproportionately by 0.7 percent. As a result, capacity utilization (passenger load factor) improved by 0.2 percentage points to 74.2 percent.

In the first quarter of 2014, Austrian Airlines had 74 aircraft (three in wet lease) in service. It operated a total of 29,404 flights, corresponding to about 327 flights per day. The regularity of operation was 99.3 percent, whereas the rate of punctuality at departure was 92.3 percent. As a consequence, Austrian Airlines continues to rank as one of the most reliable airlines in the world.

Expansion of staff and fleet
The total staff of the Austrian Airlines Group amounted to 6,310 employees at the balance sheet date of March 31, 2014 (December 31, 2013: 6,208 employees). The increase of 102 employees is related to the additional Boeing 777 long-haul aircraft which will expand the Austrian Airlines fleet. Starting on July 2, 2014, Austrian Airlines will be able to expand its flight service to the USA by adding the destination of Newark Airport. Advanced bookings for the new Vienna to Newark route are developing gratifyingly.

Positive outlook for 2014
Austrian Airlines expects the successfully initiated restructuring program to result in further earning-enhancing effects. “After very hard years focusing on our restructuring drive, we would like to increasingly focus on our customers and the further development of our business”, CEO Albrecht says. “The new long-haul aircraft should bring us more passengers and thus higher operating revenues. In spite of an ongoing difficult competitive situation, we confirm our original outlook in which we expect an improvement in our operating results for the 2014 financial year”, he concludes. Austrian Airlines achieved an operating profit of EUR 25 million in 2013.