• Operating loss reduced by 28.3 percent
• Total revenues from operating activities up 6 percent despite airspace closures
• Austrian anticipates sharp improvement in result for 2010 overall

Austrian Airlines achieved a result from operating activities of minus 67 million euros in the first half-year of 2010. This meant the carrier succeeded in reducing its operating loss by 28.3 percent compared to the previous year (first half-year of 2009: minus 93.5 million euros). The extensive measures aimed at restructuring the company and reducing the cost base gradually began to bite in the first half-year. These effects will continue increasing in the course of the second half-year. That is the same for the new, active market strategy. The total revenues from operating activities rose by 6 percent to 1,024.9 million euros in the first half-year of 2010 (2009: 969.4 million euros) despite losses due to airspace closures.

Austrian Airlines is striving to reduce its costs for the full-year 2010 by around 250 million euros, and to significantly stimulate its turnover. The aim is to achieve a positive cash-flow (free cash-flow before one-off effects) and to significantly reduce the operating loss compared to the previous year. The members of the Austrian Airlines Executive Board, Andreas Bierwirth and Peter Malanik, said the following: “Our measures are taking effect. We are moving in the right direction, but we have not yet reached our goal. We cannot afford to let up now, and must continue to implement our restructuring programme as consistently as before.”
Traffic figures: Growth with new market strategy Austrian Airlines carried approximately 5 million passengers from January to June, or 8.8 percent more than the figure for last year. Without the negative impact of the airspace closures, this growth in the number of passengers carried would have hit double figures – in the single month of June 2010, the increase was 16.5 percent. The new market strategy, which Austrian Airlines implemented in the second quarter of 2010, is enabling the company to win back market share at its Vienna hub: the carrier’s share of the market at the hub rose by 2.7 percent in the first half-year.

The load factor rose by 3.7 percentage points to 74.2 percent in the first half-year. Austrian Airlines reduced its capacity measured in Available Seat Kilometers (ASK) by 1.1 percent. Demand measured in Revenue Passenger Kilometers (RPK) rose by 4.1 percent, however.

In the Europe business segment, Austrian Airlines carried approximately 3.9 million passengers in the first half-year of 2010 – 13.6 percent up on the figure for last year. The load factor rose by 2.1 percentage points to 67.5 percent. The figure for ASK rose by 8.9 percent, and that for RPK by 12.3 percent.

In the Intercontinental business segment, Austrian Airlines carried 785,100 passengers in the first half-year of 2010. This is the equivalent of an increase of 5.6 percent compared to the previous year. The load factor improved by 7.2 percentage points to 80.3 percent. Austrian Airlines reduced its ASK by 4.4 percent. RPK rose by 5.1 percent.

In the Charter business segment, Austrian Airlines carried 281,600 passengers in the first half-year of 2010. This figure is 27.7 percent lower than last year. The load factor fell by 4 percentage points to 74.1 percent. Austrian Airlines reduced its ASK by 25.9 percent. The figure for RPK fell by 29.7 percent.

The restructuring concept
Austrian Airlines is currently implementing a concept entitled “Austrian Next Generation” to reorient and restructure the organisation. The concept consists of three pillars:
1. The new, active market strategy in European traffic: Austrian remains a network carrier offering high quality. We will continue to offer first-class service with good catering and high levels of reliability and punctuality – Austrian remains Austrian. We are increasing quality in the areas where it is relevant: we are improving our flight capacity by increasing the number of flights we offer on key routes with high passenger volume, and by using larger aircraft. We are now producing this relevant quality more cheaply, which enables us to offer more attractive prices.
2. Costs-side restructuring: We are increasing our competitiveness by massively reducing our costs. We are creating new processes and streamlining the company. We will reduce the number of people we employ to around 6,000 full-time posts by the end of 2010. We are reducing supplier prices. We are reducing our wage costs by implementing measures agreed with the Works Councils and negotiating reform of the collective agreement rules in an effort to increase productivity.
3. Synergies with Lufthansa: we are collaborating on a targeted basis with sister units in the Lufthansa Group in order to realise synergies. As a result, we are merging our Sales units with Lufthansa and using joint sales tools. We are implementing a similar concept in the field of Ground Operations. In Purchasing, we are using the market strength of the Lufthansa Group, and increasing our purchasing power.

Punctuality
Austrian Airlines is one of the most punctual airlines in the world. In the month January to May of 2010 (more up-to-date comparison figures are not yet available), Austrian Airlines reported the second best performance out of all 23 AEA airlines, with 86.9 percent of all its flights departing within the tolerance range of 15 minutes. When measured by the punctuality of its arrival flights, Austrian Airlines was ranked in second place in the AEA, with a figure of 85.8 percent.

Awards
Austrian Airlines regularly receives international awards for its outstanding service and high-quality in-flight catering. At the World Airlines Awards 2010, Austrian Airlines’ status as one of the world’s best carriers was confirmed once again, when it took second place in the categories of Best Business Class Catering and Staff Service Excellence Europe respectively.

Employee numbers
Austrian Airlines employed an average of 6,617 people in the first half-year of 2010 (measured in person-years). The company employed 6,394 people on the cut-off date of 30 June 2010.

Austrian Airlines
Austrian Airlines is Austria’s largest carrier and offers a global route network of round 130 destinations. In Central and Eastern Europe, the route network is particularly dense: With 42 destinations Austrian Airlines is the market leader throughout the region. Thanks to its favourable geographical location at the heart of Europe, the company’s hub at Vienna International Airport is the ideal gateway between East and West. Austrian Airlines is part of the Lufthansa Group, Europe’s largest airline group, and a member of the Star Alliance, the first global alliance of international airlines.

Owner, Editor, Reproducer: Austrian Airlines AG, Corporate Communications public.relations@austrian.com.
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