Airberlin’s second quarter and first half loss widens

Airberlin (airberlin.com) (Berlin) has not stemmed its losses. The airline reported a second quarter net loss of €37.5 million ($41.8 million). This represents a 2Q widened net loss from €8.6 million ($9.5 million) reported in the same period a year ago.

The company’s first half net loss was also reported as €247.6 million ($276 million), widened from the €201.2 million net loss ($224.4 million) previously reported for the same period a year ago.

The airline issued this financial report:

Airberlin logo-2

Revenue performance in the second quarter of 2015 was characterized by tactical capacity adjustments. At 1.07 billion euros in Q2 2015, revenue fell by 7.0 percent compared to the same period last year (Q2 2014 1.15 billion euros). Accordingly, Group revenue also declined by -2.3 percent (from 1.91 billion euros to 1.87 billion euros) in the first half of 2015. As a result of capacity consolidation, revenue decreased compared to last year, but capacity utilisation and revenue per available seat kilometre (RASK) improved.

Stefan Pichler, CEO airberlin:

“Following a good first quarter, the second quarter was a transition quarter in line with the market trend, as expected and announced. We are optimistic about the outlook for the second half of the year. I am convinced that airberlin is well positioned, thanks to the efficiency improvement measures we have introduced. The noticeable 2.1 percent load factor improvement in July to 87.3 percent shows that we’re on the right track. In the fourth quarter, we will begin the consistent transformation of our business model.”

Operating earnings (EBIT) were -15.9 million euros in Q2 2015 (Q2 2014: -6.9 million euros). This year’s shift in the Easter holidays and last year’s Lufthansa strike affected earnings performance during Q2 2015. Benefits due to the low oil prices were offset by fuel hedging and the US dollar development. Over the half-year, however, airberlin improved its operating earnings (EBIT) by 7.3 percent compared to last year (HY 2014: -189.7 million euros, HY 2015: -175.8 million euros).

Net profit in the second quarter is -37.5 million euros (Q2 2014: 8.6 million euros). In the first half-year, net profit was -247.6 million euros (HY 2014: -201.2 million euros), which was primarily due to pronounced currency effects when evaluating derivates.

Positive RASK performance thanks to efficient capacity and revenue management

In a competitive market environment, Airberlin slightly increased revenue per available seat kilometer (RASK) in the second quarter, which coincided with the system-driven realignment of its revenue management. Total revenue per available seat kilometre (RASK) was 7.20 eurocts (Q2 2014: 7.16 eurocts), which represents a 0.6 percent increase. In terms of half-year results, RASK also increased by 1.2 percent, from 6.90 eurocts to 6.99 eurocts. In terms of yield performance, the average yield fell by -1.6 percent, from 120.5 euros to 118.5 euros. Compared to the same half-year period last year, the yield improved by 0.7 percent, from 119.0 euros to 119.8 euros.

In the second quarter, Airberlin offered 15.0 billion available seat kilometers (ASK), which, in accordance with its capacity planning, represents a fall of 7.1 percent (Q2 2014: 16.0 billion). Cost per ASK (CASK) rose by 1.5 percent from 7.20 eurocts to 7.31 eurocts.

Realignment of business model

During the first phase of the realignment, the management structure and management processes of the Airberlin Group were more closely aligned to operational airline processes. In addition to the short-term capacity consolidation, the airberlin group continues to focus its efforts on the redesign of its revenue management and sales.

A fundamental review of the current network operated by Airberlin is nearing completion and is aimed at significantly improving both the starting position of the operating costs per ASK (CASK) and the revenue per available seat kilometre. Optimising internal business processes and increasing focus on core business will continue during the 2nd half of 2015.

Outlook

The second half of the current financial year will aim at implementing the optimisation measures initiated during the first half year. Considerable improvements in yield, capacity utilisation and RASK are expected.

Copyright Photo: Rolf Wallner/AirlinersGallery.com. Airberlin is phasing out its Boeing 737 fleet and is going to an all-Airbus fleet. The last 737 should be retired by the end of next year unless the carrier decides to cut additional loss-making routes. Boeing 737-86J D-ABME (msn 37766) painted in the Oneworld scheme taxies at Zurich.

Airberlin aircraft slide show: AG Airline Slide Show

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