• Austrian Airlines returns to profitability after six years
• Strict cost management brings improvement of EUR 31 million
• Jaan Albrecht: “On the right path, but no turnaround yet“
The rigorous restructuring program implemented by the Austrian Airlines Group is clearly reflected in the business results for the year 2013: Austrian Airlines succeeded in posting an operating profit of EUR 25.1 million (2012: loss of EUR 6.0 million on an adjusted basis). In addition to strict cost management, the higher passenger load factor on the aircraft was the main factor contributing to Austrian Airlines’ return to profitability. The successful marketing of intercontinental flights also brought positive results. The year 2007 was the last time Austrian Airlines was in the black.
“Austrian Airlines has put the crisis behind it. We are well on track. Now the priority is to shape our future. This entails the modernization of our medium-haul fleet and expansion of the long-haul fleet”, says Jaan Albrecht, Chief Executive Officer of Austrian Airlines.
As a consequence of stringent cost management measures, operating expenditures fell from EUR 2,265 million (adjusted) to EUR 2,173 million in the year 2013. This comprises a decline of 4.1 percent or EUR 92 million. At the same time, total operating revenues were down 2.7 percent to EUR 2,198 million in 2013 (2012: EUR 2,259 million). This is related to the targeted reduction in the flight offering.
Accordingly, Austrian Airlines generated an operating profit of EUR 25.1 million in the year 2013. Adjusted to take account of non-recurring effects (see enclosed chart), the operating result improved by a total of EUR 31 million from the prior-year level.
With respect to its operational business, Austrian Airlines carried close to 11.3 million passengers, a drop of 1.6 percent from the previous year. Capacity expressed in available seat kilometers was cut back by 2.7 percent. In contrast, capacity utilization (passenger load factor) improved by 1.1 percentage points from the previous year to 78.6 percent in 2013. Austrian Airlines has close to a 50% market share at the Vienna Airport flight hub. In 2013 the airline operated a total of 135,088 flights using 73 aircraft, or about 370 flights per day. The regularity of operation was 98.9%, whereas the punctuality rate on departure equaled 88.5%. Accordingly, Austrian Airlines ranks among the most reliable airlines in the world.
More passengers expected in 2014 – Expansion of long-haul network services
The Supervisory Board of the Lufthansa Group approved the request of the Austrian Airlines Group to acquire an additional Boeing 777 long-haul aircraft. In addition to the success of the restructuring measures, the basis for this decision was also growth forecasts for the long-haul market ex Vienna. This will secure the long-term competitiveness of the Vienna flight hub. The additional aircraft will enable Austrian Airlines to expand its route network to North America as of July 2014. In the future Austrian Airlines will operate flight service to Washington with a B777 aircraft, expand flight service to Chicago to daily flights and also add Newark, New Jersey as a new flight destination. The national carrier will continue to offer daily flights to New York and Toronto. Austrian Airlines expects an increase in passenger traffic in 2014 as a result of the increased number of flights.
Austrian Airlines recruiting once again
The total staff of the Austrian Airlines Group amounted to 6,208 employees at the balance sheet date of December 31, 2013 (December 31, 2012: 6,236 employees). The number of employees is expected to rise slightly in 2014. At present Austrian Airlines is recruiting 100 flight attendants and 15 technical apprentices. The new positions are related to the additional long-haul aircraft which will be operated under the red-white-red colors of Austrian Airlines.
Positive outlook for 2014
“2014 will be a challenging year against the backdrop of the current trouble spots in the world. However, the situation at Austrian Airlines has stabilized enough from a business perspective that the company will be able to effectively withstand crosswinds. This year we want to further consolidate our position as a profitable company”, CEO Jaan Albrecht adds.
Key Facts & Figures
Austrian Airlines is Austria’s largest carrier and operates a global route network of round 130 destinations. That route network is particularly dense in Central and Eastern Europe with 41 destinations. 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. The flight operations of the Austrian Airlines Group has been bundled at its 100% subsidiary Tyrolean Airways since 1st July, 2012.
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