Air Berlin PLC & Co Luftverkehrs KG

EANS-News: Air Berlin PLC /airberlin: Efficiency programme has desired effect

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Financial Figures/Balance Sheet/fy2011 results

Subtitle: • 2011 balance sheet: turnover rose to 4.23 billion Euros, passenger
numbers to 35.3 million
• Despite higher fuel costs 1st quarter will be better than previous year
• Mehdorn: bottoming out process ridden out
• oneworld membership and strategic partnership with Etihad Airways will have a
positive outcome

London/Berlin (euro adhoc) - The second largest German airline airberlin is
looking at the future more positively after a poor 2011. As airberlin CEO
Hartmut Mehdorn reported at the company´s press conference to announce the
results for the financial year on Friday in Berlin: "Despite record figures for
turnover and passenger numbers, we cannot be satisfied with the 2011 results."
Not only as a result of the severe winter in Europe in early 2011, the Arab
Spring, air-traffic control strikes and the threat of strike action, the results
remained well below expectations. In particular the introduction of air traffic
tax (165.6 million Euros) and the rise in fuel prices (229.2 million Euros)
added costs of around 395 million Euros for the company within 12 months.
Mehdorn comments: "I am still confident that the German government will
recognise how damaging the air traffic tax is to German aviation. It leads to
distortion of competition, is environmentally nonsensical and puts jobs at
risk." The fact that six German airlines have to pay almost 60 percent of the
approximately one billion Euros in taxes, whereas the remaining 40 percent is
paid by 100 foreign airline companies, is said to be absurd.

As Mehdorn says: "airberlin is now able, through major course corrections and
other actions, to detect positive effects, and therefore to look to the future
with optimism." This means that the efficiency improvement programme "Shape &
Size" is likely to show its effectiveness as early as the first quarter; despite
the roughly 35 million Euros of extra costs due to the rise in aviation fuel
prices, a better result will be attained in comparison with the previous year´s
quarter. airberlin´s CFO Ulf Hüttmeyer comments: "Our fitness programme `Shape &
Size´ will reach its full effect and unfold in the second half. We expect to
achieve an operational improved result of more than 200 million Euros this year
alone." Performance in all areas is visibly improving; we have ridden out the
bottoming out process", emphasised Mehdorn. He also gave a positive assessment
of the strategic partnership with Etihad Airways and membership in the oneworld®
global airline alliance which commenced on 20th March. Both would offer
attractive growth opportunities to the company after consolidation.

2011 balance sheet

Compared with the previous year, Air Berlin PLC 2011 was able to increase
turnover by 13.7 percent to 4.23 billion Euros (previous year: 3.72 billion
Euros) and the number of passengers by 1.2 percent to 35.3 million (previous
year: 33.6 million). Operational expenditure at the EBITDAR level has increased
by 20.6 percent from 3.16 billion Euros to 3.81 billion Euros. In fact the
increase in expenditure would have been distinctly lower without additional
taxes and one-off effects. Because of this additional expenditure, the EBITDAR
(result before interest, taxes, depreciation and rental costs) of 618.5 million
Euros reduced by 31.1 percent to 425.9 million Euros during the financial year
2011. The EBIT (operating result before interest and taxes) falls from 
-9.3 million Euros to -247.0 million Euros. Contrary to this, the financial
result has improved from -133.3 million Euros to -111.9 million Euros. Lower
financing costs contributed mainly to the lower level of costs. The pre-tax
result in the 2011 financial year is -358.8 million Euros after -141.6 million
Euros in 2010. After a tax credit of 93.2 million Euros, the net result for the
reporting year is -265.6 million Euros after -97.2 million Euros in the previous
year. Equity capital is 259.9 million Euros (previous year: 505.3 million Euros)
and net indebtedness is 813.0 million Euros (previous year: 489.3 million

Shape & Size: airberlin´s fitness programme 

With its efficiency improvement programme "Shape & Size", airberlin intends to
make an improvement in the operating result of more than 200 million Euros in
2012 alone. "Shape & Size" is the comprehensive programme rolled out across the
group to improve the efficiency of all operating processes. This includes,
amongst other measures, the optimisation of network and fleet, processes and
allocation of staff, savings in administration and procurement with the aim of
sustainably reducing overall operating costs while achieving higher revenues,
including the implementation of a state-of-the-art sales platform through which
a better use can be made of available capacity and a higher average seat
occupancy factor can be achieved.

Strategic partnership with Etihad Airways

Due to the strategic partnership with Etihad Airways entered into on 19th
December, new markets have opened up to airberlin and its passengers, providing
new growth opportunities in Asia and Australia. Likewise, passengers travelling
with Etihad Airways will benefit from airberlin´s dense European network and its
links to North America. Both parties are also looking for synergies in their
co-operation. The strategic partnership links the route networks and
frequent-flyer programmes of both airlines with one another and expands the
flight offers for both companies to 239 destinations in 77 countries. Both route
networks are expanded in an ideal way, as they scarcely overlap and therefore
complement one another. The co-operation between Etihad Airways and airberlin
will be comprehensive. Both companies announced just a few days ago, for
instance, that they will be combining their programme for the procurement,
specification and maintenance of the future Boeing 787 Dreamliner. A series of
joint working groups have also been formed to obtain benefits from this 
co-operation. The frequent-flyer programmes of both airlines are co-operating,
so that topbonus members will be able to collect both status and premium miles
on all flights with Etihad Airways.

Membership in oneworld airline alliance

When airberlin will become a member of the global alliance oneworld on 20th
March, this represents a further major strategic step. Membership in oneworld
massively expands the offers for airberlin passengers: the access opportunities
to gateways increase to 75 and destinations to around 800 in 150 countries. The
alliance fleet comprises around 2,500 aircraft, offers around 9,000 flights per
day and transports 300 million passengers per year. Customers of the airberlin
frequent flyer programme topbonus can collect and redeem status and premium
miles worldwide with 11 oneworld carriers. Frequent flyers also gain access to
more than 550 airport lounges worldwide. And the airberlin frequent flyer
program topbonus is already co-operating with some frequent flyer programmes
operated by other members of oneworld. topbonus participants can collect and
redeem miles over the whole route network of the oneworld alliance.

Further inquiry note:
Uwe Berlinghoff 
Senior Vice President Communications airberlin 
phone:  +49 30 3434 1500
fax:    +49 30 3434 1509

end of announcement                               euro adhoc 

company:     Air Berlin PLC
             The Hour House, High Street 32
             UK-WD3 1ER Rickmansworth, Herts
phone:       +49 (0)30 3434 1500
FAX:         +49 (0)30/3434-1509
sector:      Air Transport
ISIN:        GB00B128C026
indexes:     SDAX, Classic All Share, Prime All Share
stockmarkets: free trade: Berlin, München, Hamburg, Düsseldorf, Stuttgart,
             regulated dealing/prime standard: Frankfurt 
language:   English

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