Aegean Airlines announces results for the First Half 2007 with key highlights:
Turnover rose 22% to euro 209m
Total passengers carried up by 19% (or 372,090) from the previous year
EBITDAR up 45% to euro 29.1m against euro 20.1m in the previous year
Net profit for the period increased to euro 6.4m from euro 1.1m
Total cost per available seat kilometer fell by 8.6%. Yield per passenger Kilometer reduced by 3%
Balance sheet cash and cash equivalents totaled euro 30.1m prior gross IPO proceeds of euro 135m to be booked in the third quarter of 2007
Average passengers per flight up to 91 from 89. Scheduled services load factor at 66.6%.
Eftichios Vassilakis, Executive Vice President, commented:
"I am pleased to report positive momentum on our first set of results as a publicly listed company. Overall market growth in our main base Athens International Airport remains very strong with traffic up 10% in the first half of 2007 with Aegean Airlines significantly outperforming with 19% growth in the same period and a significant gain of market share. In international routes we have grown by 35% with a solid performance in most of our new routes. While H1 is not the important contributor to profitability we have managed to improve EBITDAR by 45% despite increased capacity from competitors and increased yield pressure. Furthermore, the improvement in our first half 2007 financial results was achieved without the positive contribution of the share capital increase that was completed in July and will only be included starting with Q3 financial statements.
The recent IPO represents an important milestone for our company since the gross proceeds of euro 135m, coupled with our improved positive results give us the necessary tools to implement our growth plans with financial security. Finally, it is important to note that both the qualitative and the cost efficiency related benefits stemming from our investment in new A-320 aircraft will only become significant starting from the second half of 2008 when the new aircraft will account for almost 50% of our total fleet seat capacity. We expect significant further gains in cost efficiency as our refleeting plans and distribution cost control efforts mature."
Overview
The company's balance sheet and its financial results for H1 2007 have not been affected by the recent share capital increase as euro 135.2m of gross proceeds (euro 126.6m net of IPO related expenses) will be included as of Q3.
Aegean Airlines began 2007 with strong growth in travel demand. In the first six months the company flew over 2.3 million passengers, up 19%. Domestic traffic grew by 12%, with Aegean Airlines continuing to gain market share and successfully stimulating demand in the local market. International traffic grew by 35% to 781,330 passengers. Scheduled services load factor eased to 66.6% as a result of the increase in average aircraft seat capacity of 4% and the introduction of new international routes, especially seasonal. The number of average passengers per flight rose to 91 from 89.
Aegean Airlines network covers 7 countries on 30 year-round routes and 13 seasonal routes compared with 26 and 2 seasonal routes in the comparable 2006 period. In late 2006 Aegean Airlines opened Athens-Bucharest and Athens-Cairo routes while in 2007, the company is introducing new direct services from Athens to Frankfurt and Munich, code-shared with Lufthansa, whilst also doubling frequencies to Milan. With these new routes, the company aims to become more attractive in the point-to-point market and increase its feed into the Lufthansa global network. The company's objective is to gradually increase its coverage and flight density to European destinations so that business as well as leisure passengers are offered an attractive competitive product.
The fleet renewal programme, which will see the present Boeing 737-300/400 fleet replaced by new aircraft of the Airbus A-320 family was initiated in Q1 2007 when Aegean Airlines took delivery of the first 3 A-320s. 2008 is going to be a much more significant year in terms of re-fleeting with 10 new Airbus arriving by the end of the year both replacing existing 737-300/400's and adding capacity for growth. The fleet renewal program which will be completed by early 2010 will increase the attractiveness of our product and reduce operating costs.
First half financial results show continued improvements with total revenue rising by 22% to euro 209m, attributed to strong demand trend, on a flying program 29% larger in ASKs. Passenger yield was down 3% to euro 13.60 cents while revenue per available seat kilometer eased 5.5% to euro 9.12 cents, reflecting a combination of drivers like the recent new route openings, a longer stage length, a relatively weak yield environment prevailing on Western European routes and higher web sales contribution. The price of jet fuel remained high for the first six months of 2007 and similar to last year's levels. Nevertheless, scale economies, increased RJ seat capacity (112 from 100 seats), rising contribution of web sales and a stronger Euro against the US dollar resulted to an 8.6% reduction of CASK, allowing us to significantly improve pre-tax earnings from euro 0.8m to euro 8.0m. Consequently, Aegean Airlines net earnings for the first six months of 2007 improved to euro 6.4m from euro 1.1m in the comparable 2006 period.