Air Berlin’s 2007 performance positive, 2008 will be year of profit optimisation - Board
Tags :
Continental Europe,
Air Berlin
Despite the decline in earnings, the Management Board of Air Berlin PLC rates the company’s 2007 performance as positive. The Management Board of Air Berling stated the carrier has grown considerably, both organically and through acquisitions and partnerships, and that 2008 will be the year of profit optimisation.
Air Berlin’s CEO, Joachim Hunold, declared 2007 the "Year of Growth", having designated the completion of the integration of dba, the acquisitions of LTU and Belair, and the cooperation with Dortmund-based airline company, Walter, as "milestones in Air Berlin’s corporate history".
Air Berlin’s fleet increased from 88 to 124 aircraft, as a result of the acquisition of LTU and Belair.
In 2007, Air Berlin brought its 100th jet into service, ordered 25 B787s from Boeing, completed a capital increase and placed a convertible bond, extended the "Top Bonus" programme and designed a new intercontinental product.
Sales revenue up 61%
For the 2007 financial year, Air Berlin’s sales revenue increased from EUR1.58 billion to EUR2.54 billion, representing a 61% increase. EBITDAR increased by 48%, from EUR257 million to EUR379 million. Due to non-recurring expenses, EBIT fell by 67%, from EUR64 million to EUR21 million. Net profit reached EUR21 million. On 12-Mar-08, the company had estimated this figure at approximately EUR11 million.
Cost-efficient Internet sales
The sale of individual seats increased by 3 ppts to reach 63% of sales revenue. Despite strong linear growth, charter business decreased from 40% to 37% of sales revenue. Currently, Internet sales represent 46% of sales revenue.
Air Berlin was able to reduce the share of direct operating costs by 3.2 ppts, from 61.3% to 58.1%, by lowering airport charges from 26.2% to 23.5% and by lowering the cost of catering from 3.8% to 3.4%, among other things.
As a share of direct operating costs, fuel cost increased marginally from 22% to 22.1%. Despite rising staff and technology costs and the expenses related to integration, unit cost (CASK) at EUR3.54 cents remained unchanged.
Potential for improving performance
According to CEO Joachim Hunold, Air Berlin’s 2008 optimisation programme 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 utilisation of short-term wet leases.
For 2008, all things considered, Air Berlin’s Management Board sees a potential for improving operating performance by EUR100 million.
The company will have an average of 127 aircrafts in service, with the fleet growing moderately to reach 134 aircrafts by end-08. On average, 74% of Air Berlin’s 2008 fuel costs are hedged.
© Centre for Asia Pacific Aviation. Date posted: 01-Apr-08
Other Air Berlin News |
Air Berlin’s 2007 performance positive, 2008 will be year of profit optimisation - Board 
