Air Transport World

Europe. (ATW's World Airline Report).(Brief Article)(Statistical Data Included)

Adria: The Slovenian carrier, which celebrated its 40th anniversary last year, saw its traffic and revenues fall in 2001 but is looking for recovery this year.

Although passenger boardings were off 7.3% and revenues dipped just under 1% to $95.9 million, Adria was able to post an operating profit of $2.3 million versus a loss of $614,952 in 2000. It had slim net profits in both years.

Aer Lingus: The past year has brought one sad event after another to the Irish carrier. First, its recently installed CEO, Michael Foley, became embroiled in a sexual harassment suit and was dismissed by the board. Chairman Bernie Cahill took over temporarily while the search for a replacement was conducted, only to die in a boating accident. He was succeeded as chairman in late August by Tom Mulcahy, former CEO of AIB, who selected COO Willie Walsh to become CEO just in time to lead the airline into a drastic post-Sept. 11 retrenchment aimed at reducing its size by 25%.

This year Aer Lingus pilots threatened a strike that caused the airline to shut down briefly. All of this chaos, along with general elections, derailed an effort to sell about 85% of the carrier. Meanwhile, an attempt to drop the requirement to serve Shannon equally with Dublin was shot down.

The 2000 annual report was delayed until mid-2001 by the privatization effort and no other airline performance information has been released since then. The carrier did tell ICAO that its RPKs grew 7.4% last year.

Aeroflot: Like other Russian airlines, Aeroflot enjoyed excellent growth in traffic and revenues last year, but unlike most carriers it is looking for a traffic decline in 2002 as a restructuring program continues. Passenger boardings rose 14.3% last year, RPKs climbed 8.7% and revenues were up 10.1% to $1.4 billion. The airline posted a net profit of $44.3 million, up from $43.7 million in 2000.

The year's events included groundbreaking for a new terminal at Aeroflot's Moscow hub and listing of depository receipts on major international stock exchanges.

Air Dolomiti: Partly owned by Lufthansa, Air Dolomiti entered into a codesharing agreement this spring with fellow Star Alliance carrier United Airlines and was listed on the Italian stock exchange. In 2001 it received its first CRJ200 and was flying five at year end.

Traffic was up substantially last year with passenger boardings rising 22% and RPKs increasing 23.7%. The airline had revenues of $117 million but suffered a $2 million net loss after posting a tiny profit in 2000. It expects its revenues to grow about 20% this year.

Air France: The French flag carrier had an active year, and based on a slight increase in revenue and a 1.4% growth in traffic it was a commercially acceptable year as well. Revenues rose 2% to $11 billion and AF bucked the trend of losses at other European carriers by reporting a group net profit of $134.6 million for the year ended March 31, off from the previous year's $370 million.

Aim of the current year, said Chairman and CEO Jen-Cyril Spinetta, is "to post an operating income which is higher than that of financial 2001-02." Operating costs in FY02 rose 3.9% to $10.8 billion and operating profit fell to $206.8 million from $389.8 million.

In October an open skies agreement was reached between the US and France that in turn led to a grant of US antitrust immunity to the SkyTeam combination of Air France, Alitalia, Delta Air Lines and Czech Airlines. This February Air France and Delta reinstated their codeshare with Korean Airlines. Air France and Alitalia also agreed to swap 3% equity stakes in each other as part of a $1.2 billion recapitalization program for Alitalia.

In April Air France ended a hiring freeze put in place after Sept. 11. Aircraft withdrawn from service included all A310s, a 767-300, four 747-200s, three A321s and a 737-300. A 777-200 delivery was delayed into early 2003. The airline this fall will receive Boeing's first 747-400ER freighter. In December it accepted its first A330-200 and put it into transatlantic service. It also leased three 777-328ERs from ILEC to be delivered next spring.

In November the airline resumed Concorde service. Also, Air France, Delta and KAL opened their US cargo sales joint venture in Atlanta.

Air Lib: Survival remains unsure for Air Lib as undercapitalization and social unrest have continued to afflict the airline since ex-Air France pilot Jean-Charles Corbet, backed by Canadian bank CIBC, took over defunct merged AOM/Air Liberte in July 2001.

Swissair Group's bankruptcy hurt Air Lib's restart as the Swiss company forsook a second installment of a $174 million payment it had committed as part of an agreement to pull out of the two financially troubled French airlines, in which it held 49% stakes. A court since has ruled that Crossair must pay the debt. The French government in January decided to grant struggling Air Lib an "exceptional" $27 million loan pending EC approval.

Despite its financial woes, the air-line launched service from Paris Orly to Algiers, a route abandoned by Air France in 1994. In hopes of finding itself a niche in the domestic market, this April it launched a "lower cost" service, Air Lib Express.

Air Lib operates about 50 aircraft, MD-83s for its domestic and regional network and DC-l0-30s and A340s for its long-haul routes, mainly to French overseas territories. Corbet said he expects to "halve" the operating loss this year to $44-$53 million on $705 million revenue.

Airtours/MyTravel: Shareholders of Airtours Group plc, the UK leisure travel and tourism giant, approved in February a rebranding to MyTravel Group. Its two airlines, Airtours International and Premiair, are being renamed MyTravel Airways and it is planned to replace 21 of the 49 existing airplanes with new A320s and A321s.

Revenues for the group, including joint ventures, for the fiscal year ended Sept. 30 rose 15% to $7.4 billion and it posted a record operating profit of $213 million. Direct costs associated with the Sept. 11 attacks were estimated at $16.5 million.

This spring the company announced plans to start its own no-fills airline in the fall.

Alitalia: The year was going poorly for the Italian flag carrier, producing scant profits at best, when Sept. 11 happened. It estimated that it lost $42 million in revenues due to the terrorist attacks.

After that the wheels really came off, a major restructuring was announced and the group produced a full-year net loss of $798 million. Extraordinary items totaled $473 million, primarily related to the restructuring plan put into effect for 2002-03 and devaluation charges related to the long-haul fleet. Alitalia warned that 2002 results may be somewhat worse than its forecast of a loss before extraordinary items of $145 million and a net loss of $47 million.

In good news, last July 27 Alitalia officially joined SkyTeam. In January, Delta Air lines, Air France, Alitalia and CSA Czech Airlines received final approval from the US Dept. of Transportation for antitrust immunity.

The post-Sept. 11 slump forced Alitalia to confirm in November cuts of 2,500 jobs plus early retirement for another 900, part of a two-year plan aimed at achieving a profit of $22 million in 2003. It said it also needs a promised government capital injection of $338 million "together with shareholder participation and raising capital" of $890-$950 million to help it return to profitability. The airline is 53% government-owned. The restructuring plan also includes reducing aircraft types and reorganizing or selling noncore business activities.

Alitalia last year ended its ties to Northwest Airlines but entered a codeshare with Varig.

Augsburg: After suffering unspecified severe losses last year, the Team Lufthansa partner is undergoing radical restructuring, including severance for 144 of its 560 employees. The fleet will be reduced from 16 aircraft to a maximum of 12--five Q400 turboprops plus a mix of Q300s and Dash 8-200s. …

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