euro adhoc: SkyEurope Holding / quarterly or semiannual financial statement / SkyEurope continues to grow strongly and reduces its operating loss in Q1 2007

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3-month report

28.02.2007

• 45% passenger volume growth, with 10.5pp increase in load factors
• 8.4% increase in unit revenues and 4.4% reduction in unit costs
• Improvement in EBIT margin by 16.6pp, on target for

positive EBITDAR in 2007
• Launch of flights from Vienna in March 2007

Bratislava, 28 February 2007

Development of operations

In the first quarter of its 2007 financial year, SkyEurope improved
very significantly its aircraft utilisation, both in terms of
capacity generated and number of passengers carried on board.

Despite the reduction in the average number of aircraft operated
(12.1 in Q1 2007 vs 13.7 in Q1 2006), the introduction of six
(larger) Boeing 737 NG aircraft allowed SkyEurope to increase the
daily utilisation by 20.4% to 9:15 hours per day (7:41 hours in Q1
2006), resulting in an 18.5% increase in capacity for the Q1 2007
period to 812 million ASKs (685 million in Q1 2006).

The implementation of a load factor active policy (+10.5pp increase
in load factor to 76.4% in Q1 2007) offset the slowed capacity growth
compared to previous quarters, allowing SkyEurope to deliver an
impressive 45% growth in passengers carried, reaching 595,332 during
the three months ended 31 December 2006 (409,946 passengers for three
months ended 31 December 2005).

The new Boeing 737-700 NG aircraft have also contributed fuel and
maintenance efficiencies and allowed SkyEurope to achieve an 83.3%
on-time performance during the quarter, making it one of the most
punctual low-cost airline operators in Europe.

Financial development

The very significant growth in traffic for the period was partly
stimulated by promotional fares for the seasonally weak
October-December quarter, resulting in some yield erosion (6.7% down
from Q1 2006), which was fully offset by the 10.5pp increase in load
factor. As a result of this and a surge in ancillary revenues (75%
higher Q1 2007 than Q1 2006), unit revenues grew strongly (by 8.4%)
to EURc 4.14, resulting in total revenue for the period of EUR 33.6
million (+27% growth from Q1 2006).

Ancillary revenues contributed to 18% of SkyEurope’s operating
revenue vs only 13% in Q1 2006. This growth is attributable to an
increase in the booking fees and to the enhanced portfolio of
products offered to customers, including seat assignment, car rental
and hotel bookings, options which are available through SkyEurope’s
website.

Unit costs in Q1 2007 have been reduced by 4.4% to EURc 5.64, despite
targeted increases in sales and marketing expenditure to continue
promoting SkyEurope’s brand in key markets and increases in salaries
of pilots and mechanics to competitive levels. New fleet efficiency,
improved airport contracts and other cost management initiatives have
driven the overall cost base down. For the full FY 2007, SkyEurope
targets a reduction in unit costs of 5%.

The overall improvement in unit margin for the quarter resulted in a
reduced EBITDAR loss of EUR 3.8 million (negative EUR 7.7 million in
Q1 2006). The operating loss (EBIT) for Q1 2007 amounted to negative
EUR 12.2 million vs negative EUR 14.0 million in Q1 2006, reflecting
an improved EBIT margin by 16.6 percentage points. The net loss,
excluding the impact of deferred income taxes (loss before income
taxes), was reduced by EUR 700 thousand.

SkyEurope has pursued an active risk management policy for the FY
2007 and has hedged approximately 90% of the planned fuel consumption
for the FY 2007 at a price of USD 62.5 bbl/equivalent and the US
Dollar exposure at a USD/EUR rate of 1.32. These hedges together lock
in savings in the region of EUR 10 million for FY 2007 vs the oil
price and FX levels at which costs were incurred in FY 2006.

Development of the group’s property and finances

As a result of the reduced operating loss for the period, net cash
outflow from operating activities was EUR 3.0 million lower in Q1
2007 than in Q1 2006. Further to this improvement, investing cash
outflow incurred in Q1 2007 of EUR 2.1 million was received back
January 2007, as SkyEurope secured pre-delivery payments financing
for its 2008/09 Boeing aircraft orders.

Property, plant and equipment increased due to capitalised
pre-delivery payments made to Boeing for aircraft to be delivered
between 2007 and 2009, financed by pre-delivery loans obtained from
Bank of Scotland Corporate.

Outlook

By the end of FY 2007, SkyEurope expects to have fully renewed its
fleet with new Boeing 737 NGs, thereby operating with one of the
youngest fleets among European airlines, helping the Company to
continue improving utilisation and further reduce its unit fuel and
maintenance costs.

SkyEurope’s strengthened revenue management team will continue
implementing a load factor active policy, targeting an average load
factor of 80% for the FY 2007.

In March 2007, SkyEurope will commence flights from Vienna, where its
brand is already well known, to capitalise on the high revenue
potential of the larger Vienna/Bratislava catchment area (6 million
inhabitants), further strengthening the Company’s position as the
leading low cost carrier in the region.

With the overall improvements in revenue and a rigorous cost savings
programme, the Company is optimistic about delivering a significant
improvement in financial performance in coming months, and is on
track to deliver a positive EBITDAR for the FY 2007.

end of announcement euro adhoc 28.02.2007 08:02:52
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ots Originaltext: SkyEurope Holding
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:
SkyEurope Holding AG
Christian Mandl, CEO
Tel.:+421 2 4850 1180
mailto:investor.relations@skyeurope.com
http://www.skyeurope.com

Branche: Air Transport
ISIN: AT0000497003
WKN: A0F5WU
Index: WBI
Börsen: Wiener Börse AG / official market


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