airberlin plans cuts to improve results
airberlin reached an operating profit (EBIT) of EUR 171.7 million for the third quarter of 2010; however, the accumulated figures for the first nine months of the year could have been better: As at 30 September 2010, the net result for the first nine months amounted to EUR -14.6 million.
Total revenue for the quarter reached EUR 1.241 billion, i.e. is a 5 percent increase over the corresponding quarter of the previous year. Due to the capacity increase, yield decreased by 2.2 percent to EUR 103.93. Analogously, revenue per available seat kilometer decreased by 2.9 percent to 6.79 Eurocents.
Conversely, cost per available seat kilometer (ASK) for the first nine months of 2010 was lowered by 3.6 percent, in the third quarter even by 4.3 percent. Air Berlin PLC's net indebtedness was significantly reduced, namely from EUR 574 million to EUR 438 million. This figure, however, also includes EUR 132 million for the first-time consolidation of the Austrian subsidiary, NIKI. The equity ratio improved to 22 percent as compared to 20 percent in the corresponding quarter of the previous year.
Promising economic data and increasing consumer confidence encouraged airberlin's Management to expand the fleet during the first nine months of the year. Seat capacity was increased by 4.9 percent, in the third quarter even by 9 percent. However, the air travel tax which will become effective as of January 2011 is prompting the company to change its course. Since the charge is expected to amount to between EUR 160 and 170 million, capacity will be reduced by 5 percent as of the beginning of the summer flight schedule 2011.
As airberlin's CEO Joachim Hunold stated in Berlin on Thursday: "Although the economic conditions remain favorable, we are cautious with respect to the coming year. In my opinion, the fierce competition on some flight routes will make it impossible to pass on the air travel tax to the passengers in its entirety. Therefore, we will reduce our capacity by five percent, and reduce our fleet by seven aircraft, instead of carrying out the originally planned increase."