SkyEurope: Worryingly low cash balances as losses continue

SkyEurope, which is yet to report a profit since it commenced operations in 2002, reported a net loss of EUR11.4 million in the three months ended 31-Dec-08 (a slight worsening from the EUR11.3 million net loss reported in the previous corresponding period), resulting in a negative 21.7% net margin in the quarter. [2550 words]

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This report contains the following subheadings:

• Ancillary revenue key element to turn-around strategy
• Unit revenues on the improve, due to targeted capacity reductions
• Unit costs remain at high end of LCC peer group
• Current strategy: Cutting capacity to eliminate unprofitable routes
• Fleet shrinks by two thirds; facing challenges financing future aircraft
• Further concerning signs
• Outlook: Challenging times ahead with much depending on willingness of investors

This report contains the following charts and tables:

• SkyEurope financial highlights for three months ended 31-Dec-08
• SkyEurope EBTIDAR, EBIT and net margins: 1QFY07 to 1QFY09
• SkyEurope operating revenue and passenger growth: 1QFY08 to 1QFY09
• Sample LCC unit cost (per ASK; USD cents)
• SkyEurope operating expenses breakdown (EUR): 1Q08 vs 1Q09
• Key SkyEurope developments: Oct-08 to Feb-09