Estonian Air revenues up by 24%, airline to take vigorous steps to reach profitability
09-Aug-2012 The total revenue of Estonian Air in the first six months was up by 24% to reach 43.9 million euros, the financial result for the first six months was a loss of 14.9 million euros. The company expects to have significantly better results in the second half of the year.
Estonian Air CEO Tero Taskila said that despite of increased passenger numbers and sales revenue, the results were primarily influenced by fuel prices which increased expenditures by 32%, one-off costs of the fleet exchange, weak euro and uncertainty of the economy.
The number of Estonian Air passengers in the first half of the year rose by 38% to 423 581 passengers. The company opened nine new destinations and increased its scheduled market share at Tallinn airport from 30% up to 44%. The load factor increased by eight percentage points up to 70%. Unit revenue (RASK) increased by 19%.
"In spring we conducted a strong optimization of variable costs and in July we decreased the administration staff by 15%. We hope to sign a new collective agreement with our pilot and cabin crew unions to replace the expired agreements, which were officially terminated today. The new collective agreement should be based on changed market environment, and based on EU and Estonian regulations. We aim to reach 15% efficiency in crew utilization during the negotiations," said Taskila. "We have also adjusted our schedule for improved profitability. The effect of the listed activities will occur already in the end of this year," added Taskila.
"Regardless of the extremely difficult situation on regional and international aviation market, the management of Estonian Air is committed to reach profitability with the help of above-mentioned activities by the end of 2013," added Taskila.
IATA (the International Air Transport Association) downgraded their forecast of losses for the European airline industry to $1.1 billion, nearly double the previously forecast of $600 million loss.
To increase openness and transparency, the company will start reporting quarterly its performance and economic results. This year third quarter results will be published in the end of October.