Austrian Airlines Generates Third-Quarter Earnings of EUR 61 Million

· Positive impact of the restructuring program is being felt – Costs continue to be under control

· Good figures for bookings and favorably-priced jet fuel lead to record summer results

· Higher revenue and earnings in spite of the slight decline in passenger volume

Austrian Airlines, Austria’s leading airline, generated earnings before interest and taxes (EBIT) of EUR 61 million in the first nine months of the current financial year 2015. This is in contrast to an EBIT of minus EUR 4 million in the same period of the previous year.

“The strong improvement in our performance can be attributed to several factors“, says Austrian Airlines CFO Heinz Lachinger. “For one thing, Austrian Airlines was able to further reduce its costs thanks to the restructuring program. At the same time, lower prices for jet fuel and a very good summer season from an economic perspective led to the upswing in our business results“.

In spite of higher technical costs relating to maintenance work carried out on jet engines, total operating expenditures were reduced slightly by 0.3 percent to EUR 1,644 million (Q1-3 2014: EUR 1,649 million) in the first three quarters of this year as a result of stringent cost management. In contrast, total operating revenue rose by 3.6 percent in the same period to EUR 1,705 million (Q1-3 2014: EUR 1,646 million). Accordingly, EBIT amounted to EUR 61 million, up from the comparable figure of minus EUR 4 million in the first three quarters of 2014. Revenue at the end of the third quarter of 2014 totaled EUR 1,591 million, comprising a year-on-year increase of 1.1 percent.

The summer quarter proceeded particularly well for Austrian Airlines: Revenue climbed by 4.6 percent compared to the summer quarter of 2014, whereas total operating revenue was up by 6.6 percent. EBIT rose to EUR 78 million in the third quarter of 2015 compared to EUR 37 million in the previous year. Passenger volume in the third quarter of 2015 was up 2.5 percent to 3.4 million. Capacity utilization equaled 84.8 percent, a rise of 1.1 percentage points from the comparable prior-year period.

Approximately 8.4 million passengers flew with Austrian Airlines in the period January to September 2015, comprising a decrease of 3.5 percent. This drop is due to efforts to offset seasonality as well as the declining market in Russia. Capacity measured in available seat kilometers (ASK) rose by 0.4 percent. For this reason, total capacity utilization (passenger load factor) in the period under review fell by 1.1 percentage points to 78.8 percent.

Mauritius part of the Austrian Airlines route network starting today

The crisis regions around Russia continue to have a negative impact on the business of Austrian Airlines in its role as a specialist for flight service to Eastern Europe. Flight service had to be temporarily cancelled on many routes, including St. Petersburg, where the airline registered a drop in revenue and passenger volume. The available capacity was deployed by Austria’s national carrier for new routes such as Bari, Odessa, Manchester, Marrakech and Menorca.

The performance of long-haul routes gave Austria’s national carrier a great deal of satisfaction: Bookings developed well on the newly inaugurated flight service to Miami. Business was also good with respect to the airline’s expanded offering to Washington and New York. This week Austrian Airlines operated its initial flight to Colombo, Sri Lanka, and the airline adds Mauritius to its route network starting today. The planned take-off of the Boeing 767 aircraft to Mauritius with flight number OS-017 is scheduled for 5:15 p.m. today.

Austrian Airlines continues to deliver good performance with respect to punctuality. It reported a punctuality rate on departure of 88.8 percent, still above the average in the industry, although it declined by one percentage point. The regularity of operation remained unchanged at 98.8 percent. There was a shortage of staff this summer in connection with preparations for the integration of 17 Embraer jets and the related extensive training measures, which in turn had a negative impact on the regularity of operation. Austrian Airlines reacted by leasing external capacities, changing its training program and making greater use of management pilots. As a result, the operational situation could be largely stabilized.

The total staff of the Austrian Airlines Group including its fully consolidated subsidiaries amounted to 5,916 employees (September 30, 2014: 6,188 employees). This 4.4 percent decline in the workforce can be attributed to the sale of the subsidiary TraviAustria as well as downsizing with regard to management and administrative employees resulting from the merger of Tyrolean Airways and Austrian Airlines. In the meantime, Austrian Airlines has launched a drive to raise the number of people involved in flight operations. A total of 80 pilots and 240 flight attendants will be hired.

Outlook 2015: Significant earnings improvement targeted

In spite of the traditionally negative winter months of November and December, Austrian Airlines expects a significant rise in EBIT in 2015 compared to the previous year.

“We are satisfied with the earnings development, and optimistically look ahead to good overall earnings in 2015”, states CEO Kay Kratky. “Even if the fuel price and the urge to travel on the part of passengers have considerably helped our performance, in my capacity as the new CEO I want to express my recognition to the staff and management for their achievements in bringing about an economic turnaround. We are not yet where we want to be, but we are now flying in the right direction”, Mr. Kratky concludes.

Key Facts & Figures in Q3 2015

Q3 2015

Q3 2014

Change

Revenue in € million

640

611

4.7%

Total operating revenue in € million

675

633

6.6%

Total operating expenditures in € million

597

596

0.2%

EBIT in € million

78

37

–

Adjusted EBIT in € million

78

37

–

Key Facts & Figures in Q1-3 2015

1-9/2015

1-9/2014

Change

Revenue in € million

1,591

1,574

1.1%

Total operating revenue in € million

1,705

1,646

3.6%

Total operating expenditures in € million

1,644

1,649

-0.3%

EBIT in € million

61

-4

–

Adjusted EBIT in € million

61

-7

–

Passengers in thousands

8,356

8,663

-3.5%

Available seat kilometers (ASK) in millions

17,846

17,768

0.4%

Capacity utilization (passenger load factor)

78.8%

79.9%

-1.1 p

Number of flights

96,756

97,307

-0.6%

Size of fleet (aircraft in operation as of September 30, 2015 including wet lease out)

76

76

–

Regularity of operation

98.8%

98.8%

–

Punctuality on departure

88.8%

89.9%

-1.1 p

Punctuality on arrival

88.5%

88.9%

-0.4 p

Number of employees as of September 30, 2015

5,916

6,188

-4.4%