SkyEurope Holding

euro adhoc: SkyEurope Holding
quarterly or semiannual financial statement / Half year results 2008: Improved cost base offsets record high fuel prices, cost reductions

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6-month report


SkyEurope reports a record unit cost reduction in H1 by 17.7% despite an increase in fuel prices of 42% as turnaround continues Vienna/Bratislava, 30 May, 2008. SkyEurope Holding AG, listed on the Vienna Stock Exchange´s Prime Market segment, has published its financial results for the 1st half of the 2008 financial year (1 October - 31 March 2008).

After 6 months of operations under the revised base network and schedule, the positive effects on the cost base can be seen in the H1 2008 results of SkyEurope Holding AG. Fewer bases led to significant improvements in aircraft and crew utilisation and substantially less overheads. Operating margins have continued to improve in H1. EBITDAR and EBIT margins improved by 2.1pp and 1.8pp respectively despite high fuel prices and the new capacity based in Vienna and Prague.

Nick Manoudakis, CFO said "The H1 results clearly demonstrate the success of our determined drive to eliminate complexity and reduce costs in a big way. We are probably the only airline without a fuel hedge reporting a decrease in unit costs despite the massive increases in fuel costs.  We have put the low back into low cost and we are determined to continue our efforts to lower our costs even further.

In addition, our Vienna base is now 1 year old and our new routes out of Vienna and our other bases are maturing.  We have also revised our aircraft delivery schedule to allow for more managed growth.  Taken together, our Company fundamentals going forward are strong"

Notwithstanding solid results in cost reduction, SkyEurope does not expect to meet original revenue growth guidance due to a combination of lower load factors and capacity reductions.  Load factors were affected by substantial increases in capacity in new markets (62.5%) while non-productive capacity was eliminated as a result of high fuel prices.  Further to this, high fuel prices have significantly increased SkyEurope´s costs impacting its ability to meet full year guidance on EBITDAR.

SkyEurope expects to achieve a cost per seat reduction (excluding fuel) in excess of 10%; however they do not expect to meet original guidance of cost per seat reduction (including fuel) of 5-10% which was given assuming no material adverse changes in fuel prices.

SkyEurope will continue to improve on its business fundamentals, growing revenues and delivering cost reductions versus 2007 (assuming current fuel prices). The capacity increase in H2 2008, will be significantly less than the 51.9% increase in seats added in H1 2008 and therefore less pressure on revenue per passenger and load factors is expected. SkyEurope has been operating from Vienna for more than 1 year now and is expecting to see the benefits of market maturity already experienced in Prague.  The Vienna advance bookings for the summer period are very strong and load factors and yields are expected to continuously improve.

SkyEurope has developed its network into one that focuses on both business and leisure passengers by flying to convenient airports with frequent flights.  This type of network is less seasonal, price-sensitive and is better able to cope with high fuel prices and the results of a slowing global economy. Moreover, revenue and seat load factor benefits are already being realised thanks to more convenient schedule, maturity of new markets and a more manageable growth rate.

The full financial report on the First Half (H1) for the FY 2008 can be found on relations.

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ots Originaltext: SkyEurope Holding
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Further inquiry note:
SkyEurope Holding AG
Nick Manoudakis, CFO
Tel.:+421 915 782 432

Branche: Air Transport
ISIN:      AT0000497003
WKN:        A0F5WU
Index:    WBI
Börsen:  Wiener Börse AG / official market

Weitere Meldungen: SkyEurope Holding

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