Austrian Airlines

euro adhoc: Austrian Airlines AG
Quarterly or Semiannual Financial Statements
Restructuring moves into overdrive in third quarter (E)

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Results trend and balance sheet for first three quarters of 2002 (according to IAS)

The Austrian Airlines Group achieved a positive result (EBIT) of EUR 61.8m (2001: EUR -16.0m) in the period from January to September. The Group’s profit before tax (PBT) was EUR 35.6m, compared to EUR -75.0m in the previous year. Despite the fact that the number of available seats was reduced by 2.3 % (available seats on scheduled services were down by 9.4 %), the passenger volume of the Austrian Airlines Group for the first nine months of 2002 increased by 1.6 % to 6,841,313 passengers carried. Vagn Soerensen, Chief Executive Officer of the Austrian Airlines Group, made the following statement at this interim stage of his restructuring programme: "We have been working to implement long-term restructuring measures in operations and to make ongoing improvements in profitability and corporate value, and are currently fully on course to do precisely that. Such a powerful interim result has also enabled the Group to reduce its liabilities by EUR 136.3m. This has massively increased our ability to overcome crises and our options for future action."

Significant improvement in result The Group strongly improved its result in the first nine months of the year. EBITDAR reached EUR 377.6m, compared to EUR 205.8m in the first nine months of 2001.

After falling to a level of EUR -16.0m the previous year, the Group’s EBIT bounced back to reach EUR 61.8m. Profit before tax in the first three quarters of 2002 was EUR 35.6m, following EUR -75.0m for the same period in 2001.

Thomas Kleibl, Chief Financial Officer of the Austrian Airlines Group, expanded upon the revision of the results forecast for the full year: "Our robust traffic performance in the third quarter, associated gains in market share and positive effects on income have enabled us to revise our forecast for the year upwards to between EUR 35m and 40m (EBIT). It is because passenger volume in the airline industry is traditionally lower in the fourth quarter that the budgeted annual result is below the actual result for the first three quarters of the year. If we are to continue implementing a lasting turnaround at the Austrian Airlines Group, we must maintain the strictest possible cost discipline and real dynamism in fine-tuning our business model. We achieved our strong result out of the operational business, since exchange rate gains of EUR 87.6m were offset by aircraft depreciations of EUR 72.8m." being.

Summary of Austrian Airlines Group result in first three quarters of
                                                                 1-9 / 2002 1-9 / 2001 +/- %
Revenue                                              EURm 1,673.5      1,634.2      2.4
EBITDAR adjusted 1                            EURm    290.3         207.0      40.2
EBITDAR                                              EURm    377.6         205.8      83.5
EBIT adjusted 2                                 EURm      47.3          -19.3         -
EBIT                                                  EURm      61.8          -16.0         -
Profit before tax adjusted 2            EURm      13.2          -80.1         -
Profit before tax                              EURm      35.6          -75.0         -
Cash flow from operating activities EURm    428.2          157.8         -
Passengers carried                                 6,841,313    6,735,596      1.6
Passenger load factor
(scheduled services)                              %      71.4          70.7        0.7P.

1) Adjusted for profits from the disposal of assets and for exchange rate valuations at the reporting date 2) Adjusted for profits from the disposal of assets, exchange rate valuations at the reporting date and revaluations of aircraft

Cash flow from operating activities increased again Following lasting improvements in operating business and changes in working capital (due to increased provisions for liabilities arising from flight documents sold and not yet used), cash flow from operating activities increased sharply from EUR 157.8m last year to EUR 428.2m.

Cost-cutting measures continue according to plan Operating expenses in the reporting period reached EUR 1,780.6m, that is EUR 80.5m or 4.7 % above those for the comparable period last year. The increase is essentially the result of depreciations on the reporting date in the value of aircraft awaiting sale; when adjusted to account for such effects, expenses were down by EUR 12.9m. Production cutbacks led to a significant reduction in expenses, particularly in the area of variable costs. The implementation of personnel cost savings continues according to plan. The Group-wide voluntary salary waiver of 8 % was implemented for a period of one year as at 01.01.2002 and 01.03.2002 respectively. By the end of September, 850 of the 968 planned job cuts had been made, bringing additional savings of 7 % of personnel costs.

Flight revenue improved strongly despite reduced capacity Despite significantly reduced production (-2.3 % in total available seat kilometers and -9.4 % in available seat kilometers on scheduled services) flight revenue increased by 3.1 % to EUR 1,554.2m. Other revenue fell due to a 6.1 % reduction in income from aircraft leasing. Total revenue increased by 2.4 % or EUR 39.3m to reach EUR 1,673.5m. The operating revenue of the Austrian Airlines Group rose from EUR 1,684.1m the previous year to EUR 1,842.4m in 2002.

The Austrian Airlines Group is on course to continue the improvements already made in the area of operations. The positive structural consequences were a result of the reduction in long haul capacities in favour of short and medium haul production with higher yields.

Offensive marketing and product strategy proves a lasting success The strategic reorientation of the production programme launched in the 2002 summer schedule enabled the Group to improve the connection quality of its network by 23 % (number of possible connections) and to increase market share at its Vienna hub from 61.2 % to 66.2 % (Group passengers as a percentage of total scheduled and charter passengers using Vienna Airport).

Chief Commercial Officer Dr. Josef E. Burger made the following statement on the continuing marketing offensive: "By tightly managing capacity, making structural improvements to our route programme and taking action more rapidly and flexibly, we have succeeded in raising our yield and winning additional market share on routes in Western and Eastern Europe and Asia. As a result, our overall performance has been strongly above the industry average during the key summer months. I have no doubt this situation will continue."

Consolidation of the regional flight segment was completed in October, as Rheintalflug was integrated into Tyrolean Airways. The repositioning of the regional flight segment as part of the scheduled flight programme is one of the central planks in the development of a new brand architecture for the Austrian Airlines Group, due to be presented at the beginning of 2003. Both plans will serve to develop the market presence of the Austrian Airlines Group more clearly, and to realise the Production Company Concept more consistently in terms of its external visual presence.

Dr. Josef E. Burger had the following to say about the Group’s ongoing innovations in the fare sector: "Our new fare concepts for domestic flights, regional traffic to Germany, traffic between Vienna and Altenrhein and Switzerland, and flights to Belgium and the Netherlands are beginning to take effect. Both our business clientele and holiday travellers are welcoming the new concepts. This is just the beginning, however - we shall not stop innovating. The Austrian Airlines Group intends to meet the new competition in the airline industry head on!"

Marketing of overcapacities Total investment volume in the first three quarters of 2002 was 216.3m, that is 29.8 % or EUR 92.0m lower than in the comparable period in 2001. Based on non-alterable, long-term purchase agreements, one Canadair RJ, one Dash 8, one Boeing 737 and one Boeing 777 have been newly integrated into the fleet since the beginning of the year. Other aircraft deliveries originally planned for 2002 have been postponed by an average of one to two years, in intensive negotiations with manufacturers Currently existing overcapacity is either being reduced where possible or will be profitably deployed again once markets have recovered.

By October 2002, concrete agreements had been concluded for the sale of one Challenger CL600, two Dash 8 and one Boeing 737. One Boeing 737, three Dash 8 and two business jets of the Learjet 60 type are currently leased out. Chief Operations Officer Dr. Walter Bock made the following comment on the current market position: "The market for used aircraft remains sluggish, however, the excellent condition of our fleet is an invaluable asset for possible further aircraft sales and leasing."

end of announcement            euro adhoc 19.11.2002

Further inquiry note: Konzernkommunikation: Johannes Davoras Johann Jurceka Tel.: 051755-1231 Investor Relations Karl Knezourek Tel.: 051766 - 3328

Branche: Air Transport
ISIN:      AT0000620158
WKN:        062015
Index:    ATX, ATX Prime, WBI
Börsen:  Wiener Börse AG / official dealing

Weitere Meldungen: Austrian Airlines

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