Austrian Airlines Restructuring programme begins to take hold

Result for 3rd Quarter nearly doubled to 61 million euros
Adjusted result from operating activities of 6 million euros in first 9 months of the year
Real turnaround expected in 2013

The restructuring programme of the Austrian Airlines Group is beginning to take hold. The carrier almost doubled its adjusted result from operating activities for the third quarter of 2012, to 61.1 million euros (2011 figure: 31.6 million euros). The reasons for this were the company’s strong result over the summer months, when its aircraft were full, and the extent to which it has successfully slowed down automatically rising costs.

Taken over the first nine months of 2012, therefore, the country’s largest domestic carrier was able to generate an adjusted operating profit of 5.9 million euros. As a result, Austrian Airlines is back in the black for the first time in five years. In the months from January to September 2011, the company was still reporting an operating loss of 31.5 million euros.

CEO Jaan Albrecht said the following: “Above all, I am proud of our employees. Despite difficult circumstances, they have continued to work highly professionally over the summer months.” I would like to thank my entire team for the commitment they have shown.”

Incorporating one-off effects associated with the transfer of flight operations to Tyrolean Airways, Austrian Airlines is showing a result from operating activities

of 73 million euros after the first nine months of the year. Due to these one-off effects, Austrian Airlines will achieve a positive result from operating activities for 2012 as a whole. On an adjusted basis, however, Austrian Airlines is expecting to see an annual loss due to the weaker winter months.

Compared to the previous year, the turnover of the Austrian Airlines Group rose by 6.4 percent in the first nine months of 2012, to reach 1,648 million euros (1-9/2011:1,549 million euros).

Aircraft fuller again
In the period from January to September 2012, passenger volume stood at around 8.8 million in total, up on the figure for the previous year by 2.1 percent. The passenger load factor rose by 3.5 percentage points to 77.7 percent. Measured in Available Seat Kilometers (ASK), capacity fell by 2.5 percent, while demand, which is measured in Revenue Passenger Kilometers (RPK), rose by 2.1 percent.

Number of employees
The number of people employed by the Austrian Airlines Group on the deadline date of 30 September 2012 stood at 6,320 (compared to 6,836 on 30 September 2011).

Restructuring programme continues
Austrian Airlines launched an extensive restructuring programme at the beginning of 2012, with the focus on raising competitiveness and profitability. With the help of the programme, the company had already been able to implement a number of long-term measures by the end of the third quarter which will have the effect of improving the result. The central point in the programme was the transfer of flight operations to Austrian subsidiary Tyrolean Airways on 1 July 2012.

Progress is also being made as far as harmonisation of the company’s aircraft operating in Europe is concerned. Three out of the seven new Airbus A320 planned for the Austrian fleet will already be in the air by the end of this year, and it is planned to have the remaining four Airbus A320 operating by the summer schedule of 2013. At the same time, the Boeing B737-800 fleet will be taken out of flight operations on a step-by-step basis.

Austrian Airlines also launched a product offensive on its long-haul fleet in October. By April 2013, all its Boeing B767 and B777 aircraft will have been fitted with an updated, modern cabin, new Economy seats and new Business Class seats which can be converted at the touch of a button into fully-flat beds and feature a new inflight entertainment system. Over 90 million euros has been invested to realise these upgrades to the long-haul cabin.

“This is a sum we could not yet have raised by our own efforts. For that reason, our ‘business fitness programme’ is not yet at an end. Although we are well on the way to being where we want to be, we are not yet quite there,” said Jaan Albrecht in conclusion.