Austrian Airlines*


 

 

Austrian Airlines tail fin (graphics)

 

 

2011

2010

Change
in %

*

Further information on Austrian Airlines can be found at www.aua.com.

Revenue

€m

2,047

2,033

0.7

Operating result

€m

–62

–66

6.1

EBITDA

€m

107

168

–36.3

Passengers carried

thousands

11,261

10,895

3.4

Employees as of 31.12.

number

6,777

6,943

–2.4

The specialist for traffic between Eastern and Western Europe

Austrian Airlines operates a global route network with around 130 destinations and specialises in traffic between Western Europe and the growth regions Central and Eastern Europe.

The restructuring of the company is progressing well

For Austrian Airlines the financial year 2011 was particularly dominated by the adverse effects of the unrest in the Middle East, the catastrophes in Japan, sharp price rises for kerosene and the ongoing uncertainty caused by the euro crisis. Despite this, the company was able to slightly buck the trend for the industry and improve its results. The original goal of achieving a positive operating result could not be reached, however. Austrian Airlines is therefore working hard to turn the company around. The focus lies on improving the cost base and increasing profitability. Further efforts will be made to exploit synergies in the Lufthansa airline group. Progress was made on the turnaround in 2011: structures have been made even leaner, processes accelerated, unit costs cut and price reductions obtained from system partners. The global developments mentioned above also made the market situation much more difficult than expected for Austrian Airlines in 2011. Competition from low-cost carriers, especially at Vienna Airport, also remained intense. The market strategy introduced in 2010 as part of the Austrian Next Generation programme no longer positions the company solely as a pure Eastern Europe specialist, however, but increasingly highlights traffic between Eastern and Western Europe.

Targeted development of network, product and distribution

In the reporting year Austrian Airlines made great improvements to its product range and strengthened its long-haul routes by using the sales force of the Lufthansa airline group. In June 2011 the connection to Baghdad was reinstated in the flight plan after an absence of 21 years. In 2011 Austrian Airlines thus became the first Western European network carrier to fly to a second destination in Iraq alongside Erbil. Two destinations in Western Europe were removed from the winter 2011/12 flight timetable and in exchange the number of flights on strategically important routes to Central and Eastern Europe was increased for summer 2012.

At the same time, Austrian Airlines is making focused investments to improve quality: a total of 32 aircraft from the medium-haul fleet were fitted with the new Europa seats in 2011. In winter 2012 the long-haul fleet will also be given a modern interior design and new seats. As part of the central sales coordination at Austrian Airlines, progress was made on developing proprietary sales, especially via internet, and by means of specific marketing campaigns. The heightened focus on crisis-proof market segments and its increased presence in all relevant sales channels also had a positive effect on passenger trends.

Slight improvement in operating result

With 11.3 million passengers Austrian Airlines transported 3.4 per cent more customers than a year earlier. Capacity increased by 5.9 per cent. Sales went up by 1.7 per cent at the same time. The load factor came to 73.8 per cent (–3.0 percentage points). These traffic figures enabled revenue to be stabilised at EUR 2.0bn despite the crises. The operating result for Austrian Airlines was still negative in 2011 at EUR –62m, but this was nevertheless an improvement of EUR 4m on the year before.

Jaan Albrecht is new CEO of Austrian Airlines

With effect from 1 November 2011 the Supervisory Board appointed Jaan Albrecht as Chairman of the Executive Board, which now has three members. Previously CEO of Star Alliance Services GmbH, he made a major contribution to expanding the leading role of the Star Alliance in the competitive global airline sector.

Further improvement in operating result targeted for 2012

Austrian Airlines has set itself the goal of improving its operating result further in 2012. In view of persistently high fuel costs, however, achieving a balanced operating result for 2012 does not seem within reach from a current perspective. The continued restructuring of the company remains the top priority, because the operating environment is still difficult and could lead to lasting changes and further consolidation within the airline industry. To meet the turnaround targets, the Executive Board of Austrian Airlines presented a work programme in early 2012 which requires contributions from all stakeholders and is made up of two thirds cost savings and one third increased revenue. On the revenue side, it is primarily enhanced sales activities in the home market and the introduction of new yield management systems that are to deliver higher income. The sale of eleven Boeing 737s is planned under the restructuring programme. Depending on further market developments, these will be replaced with up to seven Airbus A319/A320s and the medium-haul fleet will be harmonised around this model. The intention is also to revise the existing wage agreements in order to make staff costs competitive.

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