Earnings figures in Q1 2012: Higher kerosene prices and air travel tax burden business results

• Result from operating activities at minus EUR 66.7 million
• Result is down from the prior-year level
• Record passenger volume in the first quarter

In the first quarter of 2012, Austrian Airlines generated a result from operating activities of minus EUR 66.7 million, a decline of five percent from the previous year (Q1 2011: minus EUR 63.5 million). The total operating income amounted to EUR 464.3 million, a rise of 3.8 percent from the prior-year (Q1 2011: EUR 447.4 million). EBITA totaled minus EUR 26.9 million, a drop of 19.2 percent from same period in 2011 (Q1 2011: minus EUR 22.5 million).

The operating loss can be attributed to the increased fuel prices and the burden of increased taxes and fees. The costs for fuel and fees, which comprise some 50 percent of the company's total operating costs, were EUR 257 million in the first quarter of 2012, a rise of EUR 28 million than in the prior-year quarter.

"In particular, the air travel tax, which was introduced on April 1, 2011, negatively impacts our business in a completely new manner and with full intensity", says Austrian Airlines CEO Jaan Albrecht, commenting on the results. "We cannot fully pass on the fees to customers due to the tough competition. Therefore I appeal to the Federal Ministry of Finance once again to do everything in its power to relieve the burden on the Austrian air traffic hub", CEO Albrecht adds.

At the same time, passenger numbers reached an historic all-time high in the first quarter of 2012. A total of 2.3 million passengers were carried by Austrian Airlines in the first three months, representing an increase of 10.1 percent. This gives rise to the hope that capacity utilization will be good in the year 2012. A clear trend is evident by looking at advance bookings. In terms of available seat kilometers (ASK), Austrian Airlines expanded its offering by 6.4 percent in the first quarter, thus increasing the passenger load factor to 70.6 percent. This corresponds to an improvement of 2.1 percentage points.

"The unfavorable results on the one hand and the increasing passenger numbers on the other hand present the following picture", says Austrian Airlines CEO Jaan Albrecht. "First, our costs are too high. This confirms that the countermeasures we have initiated within the framework of the Work Programme are important and urgently needed. Second, more passengers are flying with Austrian Airlines. Considering both these factors, one can see that we have a good basis for future growth", Albrecht continues.

Moreover, Austrian Airlines is increasingly focusing on customers, markets and competition, and making targeted investments in improving quality. The quality of the airport terminal experienced by customers will improve in June with the opening of the new Austrian Star Alliance Terminal at Vienna International Airport. The new terminal will offer passengers improved service and more comfort with a modern architecture, new check-in zones, six new lounges and much more. In the winter of 2012/13, all aircraft of the airline's long-haul fleet will be given a modern interior design with new seats. Moreover, the Dash and Fokker aircraft will be equipped with a new modern cabin design.

At the reporting date of March 31, 2012, the number of staff employed by Austrian Airlines was 6,774 people, down 2.4 percent from the previous year (March 31, 2011: 6,943 employees).

Outlook

The initial positive effects of the Work Programme will first be perceptible as of the second quarter of 2012. However, one-off restructuring measures could lead the result in operating activities for the year 2012 as a whole to be below the comparable performance in 2011."We first see reaching the break-even point in 2013". CEO Jan Albrecht concludes.

Austrian Airlines

Austrian Airlines is Austria's largest carrier and operates a global route network of round 130 destinations. That route network is particularly dense in Central and Eastern Europe: with 44 destinations, Austrian Airlines operates the densest route network into this region served by a single airport. Thanks to its favourable geographical location at the heart of Europe, the company's hub at Vienna International Airport is the ideal gateway between East and West. Austrian Airlines is part of the Lufthansa Group, Europe's largest airline group, and a member of the Star Alliance, the first global alliance of international airlines.