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Air Berlin PLC

Extensive program accomplished

Berlin (euro adhoc) -

Air Berlin’s Management Board takes stock of an eventful 2007 –
Now is the time for profit optimization
  ots.CorporateNews transmitted by euro adhoc. The issuer is responsible for
  the content of this announcement.
air transport/annual results 2007
Despite the decline in earnings, the Management
Board of Air Berlin PLC rates the company´s 2007 performance as 
positive. The airline company has grown considerably, both 
organically and through acquisitions and partnerships, and has 
secured its second-place ranking in the German market. 2008 will be 
the year of profit optimization.
At the Press Conference on the Annual Financial Accounts in Berlin on
Monday, Joachim Hunold, Air Berlin´s CEO, declared 2007 the "Year of 
Growth". He designated the completion of the integration of dba, the 
Munich-based airline company which was bought last year, the 
acquisitions of the Düsseldorf-based LTU and the Swiss airline 
Belair, and the cooperation with the Dortmund-based airline company 
Walter as "milestones in Air Berlin´s corporate history". Air Berlin 
put its 100th jet into service, ordered 25 environmentally-friendly 
"Dreamliners" from Boeing, founded independently operating technology
companies in Berlin and Düsseldorf, completed a capital increase and 
placed a convertible bond, extended the "Top Bonus" program and 
designed a new intercontinental product. Since 2005, the former 
charter airline company has almost doubled the number of passengers 
transported, and has gained ground as a "premium carrier". "We have 
come a long way," concluded Hunold.
Nevertheless, 2007 was also a year in which the company had to 
overcome major obstacles. As Ulf Hüttmeyer, Air Berlin´s CFO, 
explained: Exceptional effects resulted in approximately EUR 70 
million in taxes on earnings. This was caused by the delayed start of
the integration of LTU, the technical problems encountered with the 
system integration and capacity monitoring, and the extreme 
weather-related weakness in demand in April, with the ensuing yield 
deterioration in the following two months.
Sales revenue up 61 percent
For the 2007 financial year, sales revenue climbed from EUR 1.58 
billion to EUR 2.54 billion, i.e. a 61 percent increase. EBITDAR 
(earnings before interest, taxes, depreciation, amortization and 
lease expenses) increased by 48 percent, i.e. from EUR 257 million to
EUR 379 million. Due to non-recurring expenses, EBIT (operating 
income before interest and taxes) dropped by 67 percent, i.e. from 
EUR 64 million to EUR 21 million. Net profit amounted to EUR 21 
million. In the ad hoc press release of 12 March 2008, the company 
had estimated this figure at approximately EUR 11 million.
The difference resulted from the circumstance that Air Berlin had 
activated a tax asset in 2006 and thus realized latent tax proceeds. 
In the context of preparing the 2007 Annual Financial Statements, it 
has now become apparent that this activation, in accordance with 
IFRS, has to be retroactively adjusted in 2006. As a result, the 2006
tax profit and thus also the net profit after taxes are reduced by 
EUR 10 million (net profit after taxes of EUR 40.1 million, instead 
of EUR 50.1 million originally disclosed). Consequently, for 2007, 
the tax profit and the net profit after taxes increased by the same 
amount. Net profit for 2007 reached EUR 21 million or EUR 0.33 per 
share (2006: EUR 0.76 per share). Operating income and pre-tax profit
for these two years are not affected by this period shift which has 
no effect on liquidity.
Cost-efficient Internet sales
The sale of individual seats increased by 3 percentage points to 
reach 63 percent of sales revenue. Despite strong linear growth, 
charter business decreased from 40 to 37 percent of sales revenue. 
Hüttmeyer was especially pleased with the percentage of Internet 
sales: Currently, cost-efficient Internet sales represent 46 percent 
of sales revenue. Furthermore, due to the successful integration of 
LTU´s "Redpoints" program, the Frequent Flyer program, "Top Bonus", 
now counts 1.3 million members. The number of corporate agreements 
increased from 330 to 493, i.e. an increase of 49 percent.
Air Berlin was able to reduce the share of direct operating costs by 
3.2 percentage points, i.e. from 61.3 to 58.1 percent, by lowering 
airport charges from 26.2 to 23.5 percent and by lowering the cost of
catering from 3.8 to 3.4 percent, among other things. As a share of 
direct operating costs, fuel cost only increased marginally from 22 
to 22.1 percent. Despite rising staff and technology costs and the 
expenses related to integration, unit cost (CASK) at 3.54 Eurocents 
(3.50 Eurocents in the previous year) remained practically unchanged.
The fleet increased from 88 to 124 aircraft, mainly as a result of 
the acquisition of LTU and Belair. Equity interest increased from 23 
to 28 percent. As at 31 December 2007, the company had liquid funds 
amounting to EUR 469 million (+105 %).
Potential for improving performance
According to CEO Joachim Hunold, the 2008 optimization program will 
include eliminating unprofitable flight routes, reducing flight 
frequencies on routes which are also served by other companies within
the Air Berlin Group, consolidating yield management, replacing 
Fokker 100 aircraft with Q400 turboprops, and reducing the 
utilization of short-term wet leases. Furthermore, sales will be 
rendered more efficient through a uniform structure for all the 
companies within the Air Berlin Group, and strengthened through 
world-wide ticket sales. The price structures of Air Berlin and LTU 
will be harmonized, and fee schedules adapted to the competitive 
level. Moreover, plans exist for aligning the collective agreements 
within the Group.
For 2008, all things considered, Air Berlin´s Management Board sees a
potential for improving operating performance by EUR 100 million. 
Inflation-triggered and growth-related cost increases could also be 
offset therewith. The company will have an average of 127 airplanes 
in service, with the fleet growing moderately to reach 134 airplanes 
by the end of the year. On average, 74 percent of 2008 fuel costs are
hedged.
end of announcement                               euro adhoc

Further inquiry note:

Press Contact:
Peter Hauptvogel
Director of Corporate Communications, Air Berlin
phone: +49 30 3434 1500
fax: +49 30 3434 1509
e-mail: abpresse@airberlin.com

Branche: Air Transport
ISIN: GB00B128C026
WKN: AB1000
Index: SDAX, Classic All Share, Prime All Share
Börsen: Börse Frankfurt / regulated dealing/prime standard
Börse Berlin / free trade
Börse Hamburg / free trade
Börse Stuttgart / free trade
Börse Düsseldorf / free trade
Börse München / free trade

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