Italian carrier Meridiana Fly saw earnings tumble in the year to 31 December as rising fuel costs, intense competition in the Italian market and weak economic activity took their toll.
Although the airline cautions over making a like-for-like comparison with the prior year, due to its October 2011 acquisition of Air Italy, it says EBITDAR was negative at €27.7 million ($36.7 million) against positive earnings of €31.8 million in 2010. EBIT also fell into the red, standing at minus €103.8 million, compared with €41.3 million a year earlier.
Total consolidated revenue was €646.9 million, against €645.4 million in 2010.
The carrier blames its poor performance on a number of factors. It says the cost of jet fuel has risen by 34% compared to the same period a year earlier and it has been unable to claw back the full amount through fuel surcharges or increased charter fees. Maintenance charges also rose as a proportion of income to 16.1% from 14.3% in 2010.
Tensions in the Middle East resulted in lower charter bookings and falls in revenue and margin on scheduled services, it says. In addition, it incurred high costs related to the integration of Air Italy.
It describes 2012 as "an important turnaround year for the group" and believes it is still on target to break-even on EBIT by the first half of 2013.
However, it cautions that 2012 will remain a challenging business environment due to the economic problems in Italy and the euro zone. As a result its parent company has provided an additional €9 million in working capital for 2012.