airberlin confirms outlook for 2013

14-May-2013

• Turbine turnaround program makes significant progress
• Two-thirds of the earnings contributions from Turbine for financial year 2013 already secured
• Results strained by one-off charges
• Adjusted quarterly results comparable with level of previous year
• Higher yield and considerable rise in capacity utilisation
• Only slightly reduced revenue despite significant capacity reduction
• Strong passenger figure increase on joint network with Etihad Airways

airberlin continues to pursue the consistent implementation of its Turbine turnaround program, thereby achieving significant progress. At the presentation of the figures for the first quarter of 2013, airberlin CEO Wolfgang Prock-Schauer commented: "We are undergoing major changes and are in the process of repositioning airberlin. We have already secured two-thirds of the planned earnings contributions from the Turbine program for the 2013 financial year. We are confident that we will reach our target amount of 200 million Euros this year. The Turbine effects will positively impact the results from the third quarter."

RASK increased by 9%
Despite the 11% reduction in capacity, revenue decreased by only three per cent to 791.9 million Euros compared with the same quarter last year (previous year: 812.9 million Euros). The seat occupancy rate improved by 3.3 percentage points to 85.6 per cent (previous year: 82.3 per cent). Thus airberlin achieved its best load factor for the first quarter since its initial public offering in 2006. The yield (revenue per passenger) increased by 6 per cent to 116.20 Euros (previous year: 109.70 Euros). The revenue per available seat kilometre (RASK) increased by nine per cent to 7.10 cents.

Adjusted quarterly results comparable with level of previous year
Adjusted by turnaround charges and other extraordinary items, the first quarter EBIT (earnings before interest and taxes) of -171.2 million Euros is at the level of the previous year (non-adjusted: -188.4 million Euros). For the same quarter last year, airberlin reported an EBIT of -149.3 million Euros, which would have been -173.1 million Euros without a one-time, positive earnings contribution from a sale of assets. In the first quarter, airberlin reduced net debt from 770 million Euros at the end of 2012 to 728 million Euros on 31st March 2013.

Improved liquidity
At the end of the first quarter, airberlin held 470 million Euros in liquid assets, which figure has increased by 43 per cent from 328 million Euros. After the traditionally weak first quarter, equity capital on the March 31st reporting date amounted to -53.1 million Euros. The negative equity capital is a reporting date assessment in accordance with IFRS and therefore represents a snapshot, which has no bearing on the economic operation of the company. It will recover by the end of the year, particularly through the implemented Turbine effects, which will be evident starting in the third quarter.

Chief Financial Officer Ulf Hüttmeyer commented: "Equity is negative as a result of the typical seasonally weak results and one-off charges. During the subsequent quarters, the typical seasonal increase in business will occur again and will strengthen equity. Our goal remains to achieve an equity ratio in the medium-term of 15 to 20 per cent. Furthermore, with 470 million Euros available in cash at the end of the reporting quarter, we have sufficient liquidity."

Cost reductions through further corporate restructuring
Within the framework of Turbine, airberlin has further optimised the network in particular and made substantial progress in negotiations with system partners. By the end of the year, airberlin will reduce the fleet to 143 aircraft and reduce the number of stations. The workforce reduction will proceed as planned. By the end of May, airberlin will have already eliminated 250 full-time jobs since the start of the turnaround program. Pilots and engineers are receiving offers to switch to Etihad Airways. Etihad Airways is offering this option for example for more than 50 airberlin pilots.

Strong increase in passengers through partnerships
After the success already achieved in the first year of the strategic partnership with Etihad Airways, combined passenger numbers continue to develop very positively. By the end of March, over 141,000 passengers were already using the joint route network in 2013, ten times the number from the corresponding period of the previous year. "The joint route network of Etihad Airways and airberlin has been very well received. We shall strengthen and further expand the joint network. The advance bookings have shown us that we can expect a large amount of growth in this area," explained Wolfgang Prock-Schauer. The membership in the oneworld® alliance also demonstrates this positive development. The number of passengers on joint codeshare routes doubled in comparison with the previous year to over 103,000 in the first three months of the year.

Earnings expectations confirmed
airberlin confirmed the earnings target for 2013 and still expects to achieve a break-even result on an EBIT basis for the current year.