Dramatic fuel price increases over recent weeks have caused Austrian Airlines Group to issue a full-year profit warning and appoint a consultancy firm to evaluate its strategic options, including a possible partnership.
Vienna-based Austrian says fuel prices are putting its results under strain, forcing it to produce new full-year forecasts. Under the new outlook, Austrian estimates that its fuel costs will grow by €130 million ($203 million) this year.
It says: “Austrian Airlines expects that, due to the introduced countermeasures, these costs will not fully affect the result and therefore expects that its net result for the financial year 2008 will be [a loss] within a bandwidth of between €70 million and €90 million.”
Austrian has brought in Boston Consulting Group (BCG) to determine ways of improving its results, such as internal optimisation and a strategic partnership.
Interim results of the project should be available by July, says Austrian, and detailed recommendations will be available by the end of September.
Austrian has not given an outlook for 2009, as this will depend on the kerosene price trend. The Star Alliance carrier does not believe that fuel prices will remain at over $130 per barrel in the medium term, but it adds that it is difficult to estimate when prices will begin to fall.
It says: “Due to the current situation in the industry the previous forecasts for 2009 are outdated. It will not be possible to produce reliable result forecasts for 2009 and subsequent years before the results of the project become available.”
Source: flightglobal.com's sister premium news site Air Transport Intelligence news
Source: Flight International