Thursday, November 13, 2014

AirBerlin reports 3rd quarter results

Oneworld member Airberlin reported a third-quarter net profit of €49.9 million ($62.2 million), down 50.5% compared to a net profit of €101 million in the year-ago period as it continues cost-cutting measures.

Revenue for the quarter, ended Sept. 30, was down 2.5% to €1.31 billion compared to the 2013 third quarter.

The airline said initial restructuring costs of €15 million in the third quarter reduced the results.

EBIT decreased 35% year-over-year to €74.93 million.

Airberlin said in a statement that its cost reductions were achieved despite a significant increase in expenditures of 5.8% as a result of airport charges, air navigation charges and air transport tax.

Personnel costs increased 6.4% due to wage increases and one-time effects, such as the closure of 15 crew bases.

ASKs increased 0.9% to 17.73 billion, but load factor dipped slightly from 87.3% to 87.2%. Yield decreased 4.4%, which is in line with the general aviation market.

CEO Wolfgang Prock-Schauer announced in early November that he will step down Feb. 1, 2015, as former Lufthansa executive and Fiji Airways CEO Stefan Pichler takes the helm to move the company forward with its previously announced restructuring program.

Pichler has been quoted by the German magazine Der Spiegel as saying that current measures to bring Airberlin back to profitability have not been good enough and did not deliver the requested results. He added that his first priority will be to check out the carrier’s strategy, and then will adjust management structure.

Airberlin said an updated restructuring program should improve the bottom line by €400 million by 2016—comprising 40% through cost savings and efficiency increases, 20% through network restructuring, and 40% from additional income and significantly improved market penetration.

As part of continued cost-cutting measures, the carrier plans to cut 200 positions in administration and ground staff.

Since the beginning of the Turbine cost-cutting program, 850 positions have been made redundant. Changes to the route network have led to a 5% reduction in capacity.

Fleet harmonization from Boeing 737s to the Airbus A320 family is expected to be completed by the end of 2016. Airberlin has a further 10 Airbus A321 aircraft on order and will acquire additional A320 aircraft in the market and take over 14 aircraft from a European airline. Several media outlets are reporting those 14 aircraft could come from Alitalia.

Airberlin is part of the Etihad Airways equity alliance. The Abu-Dhabi-based carrier has a 29.21% stake in the German airline.

(Kurt Hofmann - ATWOnline News) 

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