Yearbook 05

Transcript

Yearbook 05

“Making European Aviation More Efficient and Sustainable”
AEA Action Plan
Yearbook
05
Adria Airways
Aer Lingus | Air France
Air Malta | Alitalia
Austrian | bmi
British Airways | Cargolux
Croatia Airlines | CSA
Cyprus Airways | Finnair
Iberia | Icelandair
Jat Airways | KLM
LOT | Lufthansa | Luxair
Malev | Olympic Airlines
SAS | SN Brussels Airlines
Spanair | SWISS
TAP Portugal | TAROM
Turkish Airlines
Virgin Atlantic Airways
Association of European Airlines
Disclaimer
Any views or opinions presented in this Yearbook are solely those of the
AEA and do not necessarily represent those of individual member airlines.
.
Avenue Louise 350 B - 1050 Brussels
Tel. +32 (0)2 639 89 89 Fax 639 89 99
E-mail [email protected]
Web www.aea.be
Dear reader of the AEA Yearbook,
_________
As always, every year is a special year. You will see on the cover page some photos which
may be familiar, as having already served to illustrate the “AEA Action Plan”. The Action Plan
is designed to stimulate discussion amongst all stakeholders in aviation and hopefully arrive
at the consensus that it is not enough to deal with a cyclical crisis – the key for sustainable
recovery is to overcome the structural crisis in our industry which requires dialogue. Thus the
photos are not of aircraft, but of the different phases of a flight.
2004 was a year of remarkable change in Europe, as described in last year’s Yearbook. 2005
is even more remarkable. In 2005 fuel prices soared to record highs; financial analysts are
attempting to predict what these could mean for an industry which is already suffering under
the effects of many extraordinary events in recent years. Coming into 2005 we find it
confirmed that established carriers have learned the lessons from the market which is clearly
in a growth phase again: internal costs are going down and capacity increases are prudent,
so that seat load factors reached a record high. That is very good news from an industry
traditionally plagued by overcapacity and legacy costs.
But 2005 also shows that it takes time to convince regulators of the need for a consistent and
coherent policy approach. A fuel tax or a ticket tax are not measures called for by the Lisbon
agenda, which was developed to ensure that all European regulatory initiatives would be
directed at enhancing European competitiveness.
An industry can become competitive if market mechanisms can function, and market entry
barriers are not too low and exit barriers too high. This is debatable in aviation. But these
issues must be resolved if European aviation is to remain competitive on a global scale. And
that in turn is predicated upon a political understanding that regulatory intervention should be
kept to a minimum.
All the more reason to continue a dialogue with the EU institutions which my colleagues and I
have taken it upon ourselves to engage in. And all the more reason to keep our readers
informed about developments in an industry which is doing its best to meet the challenges,
but which understands more than ever that it requires a consensus with the political decision
makers on the required framework for a sustainable recovery.
The following pages illustrate this learning and recovery process.
Fernando Pinto
Chief Executive Officer
TAP Portugal
AEA Chairman 2005
Adria Airways, Aer Lingus, Air France, Air Malta, Alitalia, Austrian, bmi, British Airways,
Cargolux, Croatia Airlines, CSA, Cyprus Airways, Finnair, Iberia, Icelandair, Jat Airways, KLM,
LOT, Lufthansa, Luxair, Malev, Olympic Airlines, SAS, SN Brussels Airlines,
Spanair, SWISS, TAP Portugal, TAROM, Turkish Airlines, Virgin Atlantic Airways.
Contents
AEA Airlines in 2004
1
n At
2
4
5
6
7
8
a Glance
n Global Economic Environment
n Traffic Trends 2004
n Spotlight on the North Atlantic
n Operating Results 2004
n No- Frills ‘Bloodbath’ - Di d it Happen?
Outlook for 2005
n Looking
Forward ...
Developments
n Sustaining the Recovery
n Macroeconomic
A call to Action
n AEA Action
Plan - What, and Why
n The ‘Lisbon Agenda’ - What is it?
n Infrastructure
n Environment
n Protecting the Consumer
n External Relations
n Security
n The Big Picture...
Spotlight on the AEA
n AEA Fast
Facts
AEA
n Airline Profiles & Review of 2004
n Key Statistics
n Glossary
n About
9
10
11
12
13
14
15
16
18
19
20
21
22
23
24
25
26
56
58
ASSOCIATION OF EUROPEAN AIRLINES
1
At a Glance
2004 was yet another year characterised by major swings - in this
case a recovery from the 2003
SARS and Iraq War effects. Some
underlying growth was detectable,
substantially so in the case of
Eastern routes, but there was noticeable weakening towards yearend.
Monthly Traffic Monitor
60% change in Revenue Passenger Kilometres
50
40
Total Europe
North Atlantic
30
Far East / Australasia
20
Total Scheduled
10
0
-10
-20
-30
-40
2001
2002
2003
2004
'05
Source: AEA
The industry continued to suffer
from very high oil prices, with an
increase of 26% over previous year.
Fears of a massive impact on general economic conditions, as in
1979/80, have not materialised,
however; in real terms, both the
cost increase and the high-inflation
environment were much more severe at that time.
World Oil Prices
80 constant Q4 2004 USD/bbl
70
60
+45%
50
40
+26%
30
20
10
0
1979
1980
2003
2004
Source: US EIA
Results continued to be influenced
by extreme changes in exchange
rates, with yet another substantial
appreciation of the Euro against
the US Dollar - and, by extension,
the other major currencies linked to it.
Currency effects: Strong Euro, Weak USD
1.4 USD per Euro
1.3
1.2
Annual appreciation of Euro against USD
+10.0%
1.1
+19.8%
+38.7%
1.0
+5.3%
0.9
0.8
1999
Source: OANDA
2
2000
2001
2002
2003
2004
'05
At a Glance
financial result in USD (billion)
0.4
more revenue in USD (billion)
6.6
more passengers carried (million)
14.3
% increase in passenger traffic (RPKs)
9.2
% increase in capacity (ASKs)
7.4
2004 over 2003
3
Global Economic Environment
2004 saw, from a worldwide perspective, the strongest economic
performance since 1976, with a
growth of 5.1%.
The two main drivers of growth, the
USA and China, together accounted for half the total increase.
US growth reached 4.4% in 2004,
as a consequence of an exceptionally laissez-faire monetary policy
which has continued to encourage
consumer spending and economic
recovery through tax cuts and low
interest rates.
China has been experiencing an
investment boom, resulting in a
GDP growth of 9.5%.
Japan and Europe continued to
underperform, with GDP increases
of 2.6% and 2.4% respectively.
Nonetheless, these were still the
highest figures for some time.
Within the EU, all the accession
countries with the exception of
Malta returned above-average
growth, with the list headed by the
three Baltic states.
Of the major European economies,
the UK posted the highest growth,
at plus 3.1%. The three largest
Eurozone countries, Germany,
France and Italy, did less well, with
increases of 1.6%, 2.5% and 1.2%
respectively.
how the strength of the single currency was constraining the performance of the Euro economies.
Year-on-year the Euro appreciated
10% against the Dollar. Since
2001 it has risen by almost 40%
against the US$.
The unprecedented Chinese investment boom also put pressure
on world supplies of other base
commodities, such as iron ore,
copper, concrete and rubber. The
price of steel products has risen by
80% over the past two years.
Within this broadly favourable economic environment, threats and
challenges remain. The most obvious of these is the oil price and
its effect on inflation in general.
World Economic Growth
IMF research suggests that any
permanent $5/barrel increase could
produce a reduction in global GDP
growth by a third of a percentage
point.
8% Real GDP growth
7
6
2004 GDP growth: +5.1%
5
The growth-induced demand for oil,
which is maintaining the high price
levels, is anticipated to remain
strong. World demand for crude oil
increased by 2.7 million barrels/day
in 2004, of which China alone accounted for 1m.
Economic Growth EU-25 2004
4
3
2
1
0
1970 1975 1980 1985 1990 1995 2000 2005
Source: IMF World Economic Outlook
Source: EU Commission Spring Economic Forecast 2004-2005
10% GDP growth at constant prices
8
6
4
2
4
EU-25
Euro-zone
Italy
Portugal
Malta
Netherlands
Germany
Austria
Denmark
France
Belgium
UK
Spain
Cyprus
Sweden
Finland
Hungary
Czech Rep.
Greece
Luxembourg
Slovenia
Ireland
Poland
Estonia
Slovakia
Latvia
0
Lithuania
The average for the Eurozone at
plus 2.0%, was somewhat lower
than for EU-25, an indication of
Traffic Trends 2004
After the minimal market increase
of the year before, 2004 was a time
of renewed growth, driven in the
first instance by recovered traffic in
the areas hardest-hit by the previous year’s war and SARS shocks,
but overlaid with a solid market
increase.
The one segment where this was
not the case was in AEA members’
Domestic traffic, which barely grew
in passenger-kilometres and actually declined in passenger boardings. This gives rise to some distortions and discrepancies in aggregated figures, where the effect
on boardings is much greater than
on RPKs.
Overall, total scheduled passenger
numbers increased 4.9% to 307
million. The more representative
growth figure, however, was the
9.2% increase in passenger-km.
Largest increases were in the regions which suffered the greatest
downturn in 2003; North Africa and
Middle East traffic grew by about
20% and the much more substantial Far Eastern market was close
behind, with a plus 18.9%.
Broadly, if the effects of the Gulf
War and SARS are discounted, this
represented an underlying growth
rate through the year of about 7%.
when the SARS impact was at its
greatest, so 2004 growth rates
were hugely inflated. Adjusting for
SARS, the real growth in 2004
China traffic could nevertheless
have been in excess of 30%.
The cross-border European load
factor of 65.4% was also a record.
Cross-border European traffic (excluding Domestic) remained fairly
buoyant through the year and registered a plus 7.5%.
As anticipated, there was substantial growth in traffic to and from the
10 EU accession countries, with
AEA members registering a yearon-year growth of 15.4%, with double-digit (and even triple-digit)
growth in all markets except Slovenia and Cyprus.
Traffic Growth by Region
25% growth in RPK
North Africa
20
Middle East
The North Atlantic market experienced strong growth up to midsummer, boosted by increases well
into double digits around the anniversary of the Gulf War. Thereafter
the growth dropped away significantly and towards year-end had
slipped into negative figures. For
the year as a whole, the increase
was 7.2%.
Far East/Australasia
South Atlantic
15
10
Geographical Europe
Sub-Saharan Africa
5
Domestic
0
0
50
Source: AEA
100
150
200
Size of Region in 2003 RPK (bn)
Passenger Load Factors
With the exception of Domestic
operations, load factors improved
across the networks. Overall, the
figure of 74.6% was an all-time
high, an improvement of 1.2 percentage points over 2003.
90% load factor
85
Far-East/Australasia
80
North Atlantic
75
70
Driving the growth on the Far East
has been a very buoyant
Europe/China demand.
This market collapsed in mid-2003
North Atlantic
Mid Atlantic
80% was reached or surpassed on
North, Mid and South Atlantic sectors, while the greatest improvement, of 3.6 points, was recorded
on African routes.
Total Scheduled
65
60
55
1990
Geographical Europe
1995
2000
2004
Source: AEA
5
Spotlight on the North Atlantic
In 2004, AEA members’ traffic on
North Atlantic routes totalled 30
million passengers. In passengerkm terms the route forms the most
important region for the AEA airlines, some 27% greater than
cross-border Europe and 50% larger than the Far East.
US mega-carriers with an almost
identical flight frequency.
When AEA membership changes
are taken into account, the market
in 2004 remained slightly below the
level it had reached in 2000. While
all other operating regions have
recovered from the intervening
setbacks and moved on to new
yearly highs, the North Atlantic still
carries the legacy of 9/11.
In the Summer 2005 timetable,
AEA carriers will offer 55.3% of the
available Europe/US capacity,
compared with a US carrier share
of 43.4% (some non-AEA and 5thfreedom carriers make up the remainder).
Earnings on North Atlantic routes in
2004 totalled US$13.3 billion, split
approximately 5:1 between passengers and cargo.
Some 12% of the traffic relates to
Canada which, with passenger
figures in excess of 3 million, represents AEA’s fourth-largest nonEuropean market, behind Japan
and China/Hong Kong.
In terms of seats and passengers,
however, the European carriers
have a slender advantage arising
from their deployment of generally
larger aircraft.
This represents a reduction in AEA
share of 1.1 percentage points, and
a 0.9-point increase in the US
share, with an appreciable closing
of the gap.
As the European carriers practice a
cautious approach to expansion in
the US market, with a 5% capacity
increase in 2004 and little additional growth projected for 2005,
US carriers, with +6% and +5%
respectively, are expanding somewhat more aggressively.
Nevertheless the route is dominated by the huge Europe-US
flows. The New York market alone
is twice the size of the secondranked country market.
21 AEA member airlines (including
one all-cargo) fly between Europe
and the USA at a frequency of
more than 150 roundtrips per day
in peak Summer. They face strong
competition from, essentially, six
Europe-USA Summer Seats share
60% share weekly seats offered
AEA
55
50
45
40
35
30
2000
2001
2003
2004
2005
est.
Europe-USA Weekly Seats Offered
700 weekly seats (000)
AEA
600
500
US carriers
400
2000
2002
Source: OAG-Max
2001
Source: OAG-Max
6
US carriers
2002
2003
2004
2005
Operating Results 2004
After five consecutive years of
heavy losses, AEA airlines posted
an aggregate operating profit in
2004, of US$ 417 million.
reflected the impact of successive
fuel surcharges which, broadly,
covered about half the additional
fuel costs.
The result, while long-awaited and
evidently welcome, was nonetheless an extremely marginal one.
The profit represented an Operating Ratio (revenue:expenditure) of
just 100.6, far below the level required for the industry to recover its
cost of capital and remain sustainably viable.
The main contributor to the improved results in 2004 was an alltime high load factor (passengers
and cargo combined) of 70.0%, up
from 67.9% in 2003, when the
SARS effect in particular degraded
load factor on Eastern routes.
Amongst the member airlines, Operating Ratio varied between 81
and 111 , a range which is tending
to narrow as the industry stabilises.
The relationship between yield and
load factor translates into the load
factor needed to break even. For
the AEA airlines, this has become
a statistic which exhibits only the
smallest of year-on-year changes.
as they seek to consolidate bottomline improvements into something
which can sustain them through the
industry’s next phase of development.
Factors affecting Operating Ratio
Operating ratio after interest
While there were winners and losers all along the size range, in
general the larger airlines fared
better than the smaller ones.
A contributory factor has been a
relatively better profitability on longhaul, reflecting product differentiation targeting an identifiable business-travel segment, compared to
the intense price-driven competition on European routes.
Cost/revenue trends had a negative impact on the result, as a unit
cost increase of 4.6% (excluding
exchange-rate effects) cancelled
out an overall yield improvement of
3.9%.
Evidently, much of the cost increase was due to the continued
escalation in the price of fuel.
Equally, a part of the yield increase
In the 5 years 2000-04 breakeven
has been confined in the range
between 69.3% and 69.7%. The
2004 result aside, only once before
has the achieved load factor
(69.4% in 2000) fallen within this
range.
2003
2004
98.0
100.6
Change in operating ratio:
Change in load factor
+3.0
Cost vs revenue deviation
-0.7
Change in net interest rates
+0.3
TOTAL CHANGES
+2.6
+
+
=
The implications are clear: at
breakeven levels such as these,
only record load factors will produce an operating surplus, and
then by only the smallest of margins. For the industry to thrive, the
breakevens must come down, perhaps to the levels around 65%
where they found themselves in the
late 1990s.
Source: AEA
Operating Result after Interest
2.5 billion USD
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
Relentless price competition, however, mitigated against achieving
this through yield improvements.
As ever, it is to the cost side of the
equation that the airlines turn first
-1.5
-2.0
-2.5
-3.0
-3.5
95
96
97
98
99
00
01
02
03
04
Source: AEA
7
No-Frills ‘Bloodbath’ - Did it Happen?
In 2004, the CEO of Ryanair forecast a ‘bloodbath’ in the no-frills
sector as more new entrants joined
the fray and competitive pricing
responses from the network carriers became more widespread.
His prediction was that a major
market shake-out would leave only
two or three significant players in
this segment.
Events have only partly vindicated
the statement. A major casualty in
late 2004 was the Italian carrier
o
Volare, which had ranked n 3 in
the sector during that Summer.
Other departures from the scene
were the much smaller carriers
Duo (UK), V-Bird (GER) and Air
Polonia (POL).
SAS’ Snowflake brand has also
exited the market and the UK’s
MyTravelLite has severely cut back
its operation.
1
Also included in the AEA list for
2005 is Aer Lingus’ shorthaul operation, which has completed the
transition to a rigorously-applied
no-frills business model.
Coupled with continuing strong
growth for the major players, the
result has been another substantial
increase in this sector between
Summer 2004 and Summer 2005 measured in scheduled seats per
week - of around 40%.
Approximately one-quarter of this
increase is provided by Aer Lingus,
which moves into third position,
behind Ryanair and Easyjet, and
ahead of the three large German
operators Germanwings, Air Berlin
and HLX.
Weekly Seats in Europe
10 million weekly seats
AEA
8
6
1
The AEA survey, which makes no claim to
be comprehensive, includes airlines with
substantial networks (>15,000 seats/week)
encompassing business and leisure destinations, which conform substantially to the ‘nofrills’ business model.
The sector continues to attract new
entrants, however. In the UK market, 2004 new entrants ThomsonFly and Jet2Com have both expanded substantially and have
been joined by EUJet.
In Central Europe, Wizz and Smart
Wings have joined SkyEurope to
offer no-frills product from Bratislava, Budapest, Prague and several Polish cities. Swiss and Spanish carriers Helvetic and Vueling
have also joined the sector.
4
No-frills
2
0
Summer 2000
Summer 2005
Source: OAG-Max / websites
'No-frills': 2.6 million weekly seats
Air Berlin
bmibaby
Hapag-Lloyd Express
Germanwings
Transavia
Jet2com
35%
ThomsonFly
Wizz
Vueling
Virgin Express
SkyEurope
EuJet
Helvetic Airways
Smartwings
MyTravelLite
7%
aerlingus.com
Ryanair
31%
27%
easyJet
Summer 2005
Source: OAG-Max / websites
8
Contents
n
n
n
n
n
n
At a Glance
Traffic Trends 2004
No- Frills ‘Bloodbat h’ - D id it Happen?
Outlook for 2005
n Looking
Forward ...
Developments
n Sustaining the Recovery
n Macroeconomic
A call to Action
n AEA Action
Plan - What, and Why
n Infrastructure
n Environment
n Security
n AEA Fast
Facts
AEA
n Key Statistics
n Glossary
n About
1
2
4
5
6
7
8
9
10
11
12
13
14
15
16
18
19
20
21
22
23
24
25
26
56
58
9
Looking Forward...
Outlook for 2005 is for a year of
reasonably strong growth, led by
sustained buoyancy in Far Eastern
markets. European traffic should
also grow at marginally aboveaverage levels, but the North Atlantic is expected to deliver only small
increases.
forecast financial result in USD (billion)
1.0
forecast % increase in passenger traffic (RPKs)
6.5
Overall, a 6.5% passenger traffic
increase should marginally exceed
the extra capacity on offer and super-high load factors are once
again in prospect.
If, as anticipated, continuing cost
control can neutralise the downward pressure on yields, operating
results will show a further improvement in 2005.
AEA Total Scheduled Traffic - Seasonally Adjusted
60 000 monthly million RPKs
+ 6.5% est.
+ 9.2%
50 000
yearly average
40 000
30 000
1996
1997
Source: AEA
10 ASSOCIATION OF EUROPEAN AIRLINES
1998
1999
2000
2001
2002
2003
2004
2005
Macroeconomic Developments
Although 2004 set a recent record
for economic growth, there was
evident weakening in the trend
towards year-end, a weakening
sustained into early 2005.
The latest projection for 2005 is
nevertheless buoyant at plus 4.3%.
Of the decrease from the +5.1%
recorded in 2004, one-third is accounted for by high oil prices.
Reduction in growth is foreseen
over a range of major economies.
The Chinese boom is expected to
continue at a slightly lower rate,
estimated at +8.5% in 2005 and
8.0% in 2006.
A reduction is also forecast in US
growth, to 3.6% for both years.
The outlook for the EU is for a plus
2.0% in 2005, increasing to +2.3%
in 2006, with the Eurozone economies performing at slightly below
these levels.
The level of uncertainty surrounding these projections is relatively
high as policy-makers confront a
period of slowing growth and increasing prices.
In the USA, a gradual increase in
interest rates - f rom a historic low
level - is aimed at slowing consumer spending, and consequently
current-account deficit, while avoiding too strong an impact on the
economic recovery.
through credit controls which will
reduce investment and consumer
spending.
Within the EU, several Eurozone
countries are struggling to stay
within the Maastricht convergence
criteria for the European Monetary
union of fiscal deficit not exceeding
3% of GDP (in 2004, Italy 3.0%,
France and Germany 3.7%,
Greece 6.1%).
Consequently, restrictive tax regimes cannot be loosened to encourage consumer spending to rise
from currently subdued levels.
A further uncertainty is the price of
oil. Most observers predict that it
will climb down slightly from the
current $50+ levels but the consensus is that it will not return to
the $20-$30 levels which prevailed
through most of the 1990s.
Economic Forecast EU-25 - 2005 Variance over 2004
Source: EU Commission Spring Economic Forecast 2004-2005
1.0 %-points change in GDP growth at constant prices
0.5
Economic weight increases
0.0
-0.5
-1.0
EU-25
Euro-zone
Malta
Cyprus
Latvia
Estonia
Slovenia
Luxembourg
Lithuania
Ireland
Slovakia
Finland
Hungary
Denmark
Czech Rep.
Greece
Portugal
Austria
Sweden
Poland
Belgium
Netherlands
Italy
Spain
UK
France
-1.5
Germany
The Chinese authorities, meanwhile, are engaged in controlling a
slowdown in their GDP growth rate
ASSOCIATION OF EUROPEAN AIRLINES 11
Sustaining the Recovery
Early results for 2005 have pointed
to a continuation of the growth
trends which emerged towards the
end of 2004, with a reasonably
buoyant European cross-border
market, very good growth on Far
Eastern routes, but weakness in
the North Atlantic market.
This broad pattern is foreseen to
continue through the year. In particular, the Far East market is projected to remain strong and a yearon-year growth in excess of 12% is
expected.
European cross-border traffic is
also forecast to maintain its growth
profile, ending the year at close to
7% up on 2004.
Following a first-quarter growth of
just 1.3%, the North Atlantic market
is projected to improve marginally
through the Summer, but the yearend outcome is not expected to
exceed plus 2.5%.
Overall, a growth in passenger-km
of about 6.5% is projected for what
is hoped will be the first ‘normal’
annual growth, free either of major
external shocks or market recoveries from external shocks, since
2000.
Despite 2004’s record load factors,
there are indications that some
incremental improvement can still
be realised. Capacity development
remains on the cautious side, as
industry consolidation - with Air
France/KLM being joined by Luft-
hansa /Swiss - brings elements of
network rationalisation.
The first three months of the year
saw a growth in passenger load
factor of 1.2 points to 72.8%.
There is scarcely the potential to
sustain such improvements
through the Summer, nevertheless
a half-point increase in annual load
factor would more than double the
operating surplus.
Yield trends are difficult to predict.
It is certainly the case that downward pressure through low-fare
competition - and passenger expectations of low fares - will continue, although the expectation is
that the pace of yield erosion will
slow.
Operating Result after Interest
2.5 billion USD
2.0
1.5
1.0
0.5
0.0
-0.5
On the cost side, fuel prices continue to exert an inflationary influence, and there are as yet no encouraging signs that other external
costs are abating - although the
potential certainly exists for substantial savings along the airlines’
Value Chain.
-1.0
-1.5
-2.0
-2.5
-3.0
-3.5
95 96 97 98 99 00 01 02 03 04 05E
Source: AEA
Projected Traffic Growth
Nevertheless, the assumption is
that AEA carriers will continue to
identify and implement internal cost
savings which will at least counteract any fall in yields.
Consequently, the likely financial
outcome for 2005 is foreseen to be
an improvement on 2004, with an
operating surplus after interest of
$1 billion.
2005 over 2004 Revenue Passenger Kilometres
Route Area
Europe cross-border
+7.0
North Atlantic
+2.5
Far East / Australasia
Total Scheduled
Source: AEA
RPK
% change
+12.0
+6.5
Contents
n
n
n
n
n
n
At a Glance
Traffic Trends 2004
No- Frills ‘Bloodbath’ – Did it Happen?
Outlook for 2005
n
n
n
Looking Forward ...
A call to Action
n AEA
Action Plan - What, and Why
‘Lisbon Agenda’ - What is it?
n Infrastructure
n Environment
n Security
n The Big Picture…
n The
n AEA
Fast Facts
AEA
n Key Statistics
n Glossary
n About
1
2
4
5
6
7
8
9
10
11
12
13
14
15
16
18
19
20
21
22
23
24
25
26
56
58
AEA Action Plan - What and Why?
n Aviation is in a structural crisis
which will be eased but not solved
by improved economic conditions;
n Airlines‘ financial performance is
poorer than that of all the other
elements in the Value Chain that
supports them;
n These more successful elements
are invariably not subject to the
same market forces as airlines, but
tend to be monopolistic;
n Airlines are also hampered by
burdensome and uncoordinated
regulation in many fields;
n There is no coherent policy
aimed at providing the conditions
for an effective and competitive
industry to evolve.
The Action Plan coincided with the
move by new Commission President Barroso to revive the ‘Lisbon
We live in an interconnected world.
Transport guarantees that goods and ser vices are available at our fingertips. Airlines are
an important part of that network. They pro vide access to global markets for European
business, secure over 3 million jobs in Europe
and enable the sourcing of goods and ser vices that enrich our lives. Without travel and
logistics things don’t happen. Many regions
of Europe would simply wither without the
ser vices of civil aviation. Airports are the
gateways – and airlines keep businesses connected with the rest of the world .
The airlines’ contribution to global economic growth is under threat.
According to the statistics of the
International Civil Aviation Organisatio n
(ICA O), the scheduled airlines of ICAO’s 188
member states have experienced a com bined loss of USD 13 billion over the past 14
years. AEA statistics reflect this trend for the
European network airlines. Network airlines
are not able to generate sufficient returns on
investments even when economic cycles
peak.
Why?
Since 200 1, European network airlines have
adapted to new market conditions by slashing all costs under their control. They have
reduced staff by 35,000 and readjusted thei r
business models. The airlines’ cost reductions
are, however , neutralised by external cost
increases – costs beyond the control of the
airlines.
The regulators must focus on the right
issues .
Airlines are faced with substantial cost
increases for anti-terror security , insurance
payments, implementation of cumbersom e
regulations and an array of taxes and fees.
Ef f i ci en ci es
o f N et w o r k s
5 A i r cr af t f l y i n g
p o i n t -t o -p o i n t ser v e
A
B
C
D
E
F
G
The so-called Lisbon agenda set out a num ber of measures designed to promote the
competitiveness of the European industr y in
all sectors. In order to fulfil that political
objective, European regulators must also
ensure that the backbone of European pros perity , aviation, can become and remai n
competitive.
H
I
J
5 R ou t es
5 A i r cr a f t f l y i n g o u t
o f a h u b co n n e c t
A
B
For this industr y to thrive sustainably in the
global market, not only must the airlines ’
costs be further reduced, but the aviation
system costs must also be brought in line.
Airports, air traffic control systems and other
ser vice providers must become market-ori ented. Governments must act now to
ensure that the entire aviation sector is fully
liberalised – not only airlines but all the players.
F
C
After a long haul flight from Australia, the
Far East, North or South America, virtually
ever y city in Europe is just a short connecting
flight away .
D
Moreover, the airline industry itself
is a global player and competes
against carriers from every region
of the world, on a playing-field
which is not always level.
Network Airlines –
Securing Europe’s prosperity and mobility
Our lifestyles, our living standards – can
we take them for granted?
E
to European competitiveness;
This, too, has enhanced the impact
of the AEA initiative, since it is
clear that, for Europe to trade successfully in a global marketplace, it
needs a strong international airline
industry.
J
n Aviation is of crucial importance
AEA’s Call for Action
H
The Action Plan is based on a
number of premises:
Making European Aviation
More Efficient and Sustainable
G
The initiative was a particularly
timely one. A new, expanded
European Parliament had been
elected. New Commissioners were
in the process of being appointed,
with consequent changes to the
structure of the Commission.
Agenda’ for European competitiveness.
I
In the latter part of 2004, AEA unveiled its ‘Action Plan’, a blueprint
for the industry‘s relationship with
its regulators for the period 20042009.
5 5 Co n n ect i o n s
2 Connected hubs
multiply
the connectivity
2 1 0 Co n n ect i o n s
In the past, regulation has been
imposed in a largely piecemeal
fashion, addressing specific political objectives as and when they
arise. Sometimes these objectives
diverge, and even conflict.
The AEA Action Plan is, in fact, a
challenge to the European rulemakers - design and develop a
regulatory structure within which all
sectors of the industry can flourish.
Two of these objectives, in particular, pull in different directions. Two
cities on opposite sides of the
worl d - Lis bon and Kyoto - have
given their names to specific goals
which, while not mutually exclusive, will need a level of engagement from the EU‘s decisionmakers greater than hitherto if they
are to be achieved.
It should be stable, transparent and
predictable, and its elements
should conform to a single vision,
recognising the importance of air
travel for the social, political and
economic fabric of Europe, combined with environmentallyresponsible policies and a determination that European airlines retain
their position as globally-respected
brands.
While the Kyoto Protocol is the
better-known, the Lisbon commitment to European competitiveness
is nonetheless a driver of EU policy. Unfortunately, too much of the
present crop of regulation, actual or
proposed, appears to weaken the
European airlines vis-à-vis their
global competitors.
The ‘Lisbon Agenda’ - What is it?
The ‘Lisbon Agenda’ - or Strategy,
or Process - has entered the EU
collective consciousness through
its very public re-launch in 2004 by
the new President of the European
Commission, Josè Manuel Barroso.
In fact the Strategy first appeared
at the European Council meeting,
in the city from which it took its
name, in March 2000.
Its aim was for Europe “to become
the most competitive and dynamic
knowledge-based economy in the
world, capable of sustainable economic growth with more and better
jobs and greater social cohesion’’.
The concept of a Knowledge
Economy is one which has a strong
resonance with the airline sector.
The industry has always had a high
information/knowledge intensity
and indeed was a pioneer in the
widespread application of computer
technology.
Globalisation is a key driver of the
Knowledge Economy, as the EU’s
policy recognizes. The European
airlines are facilitators of global
business and, at the same time,
participants in a global marketplace.
The Lisbon Agenda has strong
social and environmental dimensions. A stronger economy will
drive job creation, but the process
must also encompass environmental policies which ensure that
development is sustainable.
As well as the 400,000 people directly employed by European airlines, many more owe their livelihoods to other aviation sectors,
industries which provide goods and
services to aviation, to its passengers, and to its workers.
For this reason, AEA is very anxious that the relaunch of the Lisbon
Agenda reshapes the European
regulatory environment, to the extent that regulatory measures are
formulated in a manner which is
consistent with maintaining the
industry’s, and hence Europe’s,
competitiveness.
In particular, new regulations
should be subject to a full assessment of their likely impact, on airlines’ economics, on jobs, on their
relationship with their customers,
and especially on their competitive
situation vis-à-vis their global competitors.
A further feature of the Knowledge
Economy is networking and connectivity. Evidently, the fullservice network airlines have a
wealth of experience in maximizing
this aspect of their business model
which, essentially, is what differentiates them from the new breed of
‘no-frills’ carriers.
Infrastructure
When the European airline sector
was liberalised more than ten years
ago, the stated aim was to offer the
passenger more choice and lower
fares.
away from the incumbent network
carriers, despite the consequence
that this fragmentation weakens
competitiveness on the panEuropean and global scale.
Clearly, both of these objectives
have been achieved, but at the
cost of congestion and delay.
Meanwhile, procedures for infrastructure construction - be it terminal buildings or runways - are extremely complex and lengthy.
Since the last pre-liberalisation
year, 1992, passenger traffic on
AEA intra-European routes has
almost doubled. During the same
period the average aircraft size has
fallen from 124 to 119 seats.
This has placed a great deal of
strain on infrastructure, notably
airports and airspace.
Airports are the airlines’ key service providers. In particular, network airlines rely upon their hub
airports to be able to operate a
consistent pattern of incoming and
outgoing flights and thereby offer
convenient connectivity.
Hub-based networks compete vigorously with each other - this is
indeed one of the most important
legacies of the liberalisation process. This competition can be severely distorted if an airline cannot
access the capacity it needs to
match its rivals.
As traffic has grown in the changing regulatory environment, the
business of operating airports has
also been transformed. With substantial revenue streams from both
aeronautical and non-aeronautical
activities, airports are blue-chip
investment opportunities.
The ongoing privatisation of airports paves the way for private
investors to ensure that efficient
organisational structures and appropriate market-oriented strategies are put in place.
There is a need, however, for regulatory safeguards, recognising the
natural monopoly of the hub airports, but also their potential to
generate higher returns from nonaviation-related activities. Governments must ensure that instruments to steer growth-related aviation policies are available to them.
Throughout the post-liberalisation
period, far more political effort has
gone into managing the problem of
capacity shortage, than solving it.
Successive slot regulations have
sought to redistribute capacity
Infrastructure
The other pillar of aviation infrastructure, airspace and its management, also has a political/regulatory dimension, albeit the
perspective is somewhat different.
The enactment of the Single European Sky legislation in early 2004
created the de jure framework for a
unified European airspace.
The ongoing task is to make this
long-held ambition (on the part of
the users) a reality through the
dismantling of the archaic, fragmented Air Traffic Control system
which for 15 years has been recognised as a source of delay, inefficiency and environmental disbenefit.
The Single Sky brings together not
only a large number of sovereign
‘territories’ in three dimensions, but
also a similar number of preexisting route networks which meet,
not always seamlessly, at national
frontiers. Within these frontiers,
the sometimes incompatible requirements of civil and military traffic have to be accommodated.
In other words, the redesign of
European airspace involves both
the political will to reassess sovereignty issues, and the expertise to
construct a network of airways finetuned to the needs of the market,
rather than the exigencies of national borders.
AEA is heavily involved in projects
which will use the Single Sky
framework to achieve early imple-
mentation of Air Transport Management (ATM) improvements,
and in the longer term to define the
baseline of an ATM system for
2020 and map out the transitional
stages necessary to achieve it.
parties involved - national authorities (civil and military), Eurocontrol,
service providers and airspace
users - remain focused on the objectives; the achievements in building the Single Sky framework are
too important to be squandered.
Throughout these processes, it is
of the greatest importance that the
From concept to reality
Terminal 5 at LHR
Design competition.
Airbus 380
1989
1991
Planning application submitted.
Talks begin for super-large passenger aircraft.
Airbus consortium partners work on individual
schemes which lead to A3XX project.
1993
1996
Airbus Large Aircraft Division formed. Project
chiefs opt for new specially designed engines to
cope with aircraft size.
2000
Commercial launch of the A3XX, later named A380.
Go-ahead decision.
2001
Construction begins.
2002
Work begins on manufacturing key components in UK.
2005
First engines delivered by Rolls-Royce - 2 months later
the first wing rolls off the production line. Assembly begins
in May.
A380 unveiled to the world first test flight in April.
2006
A380 to take off as a commercial airliner.
Singapore Airlines to operate first trailblazing aircraft.
2004
Are we there yet?
Planned opening.
2008
Fully complete.
2011
Environment
Recent months have seen a significant raising of the stakes in the
debate on aviation’s environmental
impact.
greenhouse-gas emissions, and (b)
by giving the airlines an incentive
to invest in greener, fuel-saving
technology.
While the European airlines continue to work towards defining an
Emissions Trading scheme for
Carbon Dioxide (CO2) which will
have a genuine impact on the sector‘s contribution to climate change,
external pressure to subject it to a
Taxes and Charges regime has
intensified.
The impact on AEA airlines, however, would be immense. Annual
revenue losses could be as high as
€9bn per year. Total profit in 2004
was around $0.4bn, and has never
exceeded $2.5bn even in the very
best of trading circumstances.
Curiously, the issue has been
linked to humanitarian as well as
ecological objectives. In September 2000, 189 governments signed
the UN Millennium Declaration
which set a number of Development Goals to be achieved by 2015,
aimed at reducing poverty and inequality, and improving education
and health on a worldwide scale.
Financing these commitments is
currently under debate. Following
comments by the French and German Premiers, the EU ECOFIN on
12 April 2005 was presented with a
proposal which, amongst other
suggestions, included two aviationrelated sources of revenue: a ticket
tax of €10 for intra-EU journeys
and €30 from an EU to a non-EU
destination, and a kerosene tax of
€330 per 1000lit of fuel, for intraEU journeys.
These proposals, it was argued,
would also benefit the environment,
(a) by reducing the demand for air
travel and hence the production of
For European airlines, it would be
extremely damaging to their global
competitiveness. Financially-weak
airlines, operating out of an artificially-constrained home market,
would find it ever more difficult to
take on competitors from around
the world who are more than likely
enjoying active government support. Circumstances would also
arise where passengers could reduce their tax exposure by choosing non-EU carriers for journeys
involving hub transfers.
Ironically, the very communities in
the developing world that the initiative is supposed to help would be
among those who suffer. European airlines are net contributors to
the economies of the developing
world, in terms of tourism, trade
and social mobility.
AEA believes that other, far more
efficient, mechanisms for containing emissions can be developed.
These include infrastructural improvements which could deliver
substantial reductions but which
require political will for their imple-
mentation. They also include technological improvements in the form
of more efficient aircraft although
these require the financial resources on the part of the airlines
to replace their fleets.
Ultimately, AEA sees the need to
evaluate an Emissions Trading
scheme whereby airlines buy and
trade credits. This too would not
be without its costs but would have
the multiple benefits of ensuring
that resources are directed to
where they do the most good, of
being capable to be fine-tuned to
meet specific targets, and being
suitable for implementation on a
global scale.
Protecting the Consumer
The early months of 2005 have
seen a flurry of regulatory activity in
the field of consumer protection.
Most importantly, the 1991 Regulation on Denied Boarding Compensation was revised, effective Febth
ruary 17 , to increase compensation levels for involuntary denied
boarding, extend the compensation
to cancelled flights, and provide for
assistance, accommodation and
refund in the case of delay.
The legislation also made it mandatory to conduct volunteer calls in
instances where not all booked
passengers can be accommodated. This has long been proposed by AEA as a solution to denied boarding, and inconsistent
with a punitive statutory compensation level.
However it is in the other provisions of the rules where the airlines
encounter most problems with the
new legislation. Specifically, they
are wholly inconsistent between
delay and cancellation in the circumstances that can trigger the
provisions, as well as being totally
unclear as to what those circumstances might be.
All delays are deemed to be the
responsibility of the airline in terms
of applying the conditions of the
Regulation. This is an evident incongruity given that most delays
are outside the control of the airlines and that major events such as
extreme weather and politically-
driven decisions can cause massive schedule disruption.
As regards service cancellation,
the airlines can claim relief in the
case of exceptional circumstances,
but the legislation gives no guidance as to when this might apply.
Apart from the obvious cost implications of such burdensome and
poorly-constructed legislation, airlines believe that their fundamental
relationship with their customers
may be threatened.
While any travel plans, by any
travel mode, are susceptible to
unforeseen disruption, major inconvenience of the kind covered by
the EU Regulation is extremely
rare.
stating or misrepresenting the passengers’ statutory rights.
In such circumstances, it is inevitable that passenger expectations in
the case of journey disruption will
on occasion differ from the perspective of the airline, with damaging outcomes.
When it occurs, the most likely
reaction of a service-driven quality
airline is to act in its customersí
best interests. Flexible solutions
are invariably favourable to mandatory ones. The new rules could
work against flexible solutions,
however.
One of the major obstacles to
maintaining a good relationship
with the customer is likely to be the
misunderstanding and misinformation surrounding the issue.
th
Within days of the Feb 17 implementation date, a number of highprofile incidents involving severe
weather, strikes and in-flight technical malfunctions attracted widespread publicity, invariably over-
External Relations
The AEA Action Plan highlights the
necessity for the EU to develop an
external aviation relations policy
which is coherent, pragmatic, and
which delivers added value to the
airlines and their customers.
What the policy should avoid is that
it should become driven by political
rather than commercial objectives.
Following the suspension of EU/US
negotiations in 2004, the Commission has sought to extend its mandate to other ‘Third Countries’ in
the wake of the 2002 European
Court of Justice ruling that established Community responsibilities
in certain areas of external relations in aviation.
While US talks are being reactivated in early 2005, the Commission is also pushing to secure a
mandate to negotiate comprehensive agreements with a number of
other countries, top of the list being
Russia and China.
There are also moves to extend the
frontiers of the European Single
Market for air transport, in successive waves of expansion taking in
firstly Romania, Bulgaria and the
Western Balkans, then the countries bordering the Mediterranean
to the East and South, then
Europe’s Eastern neighbours from
the former USSR.
(which limit operations to the airlines of the two countries concerned) and other areas addressed
by the ECJ ruling.
With technical discussions between
Europe and the USA having resumed in early 2005, the hope of
the European airlines is that full
talks may be resumed as quickly
as possible.
The AEA airlines remain convinced
that the preferred solution for the
North Atlantic is the ‘Open Aviation
Area’ concept developed in the
1990s by AEA and adopted by the
European Commission and the
Member States.
This model provides for a genuine
single-market construction in which
harmonised rules impose a minimum of intervention consistent with
fair and equal opportunities
throughout the three market entities: Europe, Transatlantic and the
USA.
Although the AEA airlines agree
that it cannot be achieved in one
step, such a solution, it is believed,
would bring benefits to the carriers
of both sides - who are facing the
same challenges - as well as to
European and US consumers.
Finally the ‘horizontal mandate’
allows the Commission to negotiate
worldwide to amend nationality
clauses in bilateral agreements
Security
According to a European Commission study, European airlines were
saddled with costs of at least €1.6
billion for ‘additional security’ in
2002 alone.
Out of this figure, an estimated
€1bn was not passed on to the
passenger, but was absorbed by
the carriers.
As highlighted in the study, there is
an almost total lack of public financing for aviation security, despite the fact that perceived threats
- like the 9/11 attacks - are almost
invariably aimed at civil populations
and national institutions, rather
than specifically at the airlines and
their passengers.
ognition of security standards, to
avoid the costly legal obligation to
re-screen transfer passengers and
baggage.
Other divergences are arising in
the area of passenger data provision. AEA continues to request a
central storage/filtering system to
be recognised as part of national
security obligations, and funded as
such.
Meanwhile, other countries have
followed the US’ lead in introducing
data provision requirements, but
which differ from one state to another. The cumulation of divergent
requirements adds yet another
layer of cost burden onto airline
operations.
The study also revealed that the
measures undertaken as a reaction
to 9/11 were imposed without cost
impact or risk assessments, despite the fact that measures such
as cockpit door strengthening and
insurance requirements have
grown out of all proportion to the
original threats.
It is self-evident that US airlines are
equally affected by the imposition
of new security rules and, as in
Europe, the US Administration
does not apply cost impact assessment procedures to its rulemaking.
In addition, extra-territorial measures continue to be imposed,
mainly by the United States, without consultation with the European
carriers‘ national authorities.
Nevertheless, there has been a
willingness on the part of the US
government to fund these measures; the financial assistance
granted to the US aviation industry
is estimated at $32 billion from
2002 to 2004.
With many transit passengers encountering a comprehensive EU
security process before being subjected to an equally comprehensive
- but different - screening as they
board their US-bound flight, there
is a pressing need for mutual rec-
ments in regulatory processes
called for under the ‘Lisbon
Agenda’.
Legislation, as it arises, should
address the question of who is
responsible for what - including
who picks up the bill.
AEA continues to call for a balance
between the costs, the benefits and
the efficiency of each new security
measure. Systematic impact assessments should be carried out,
as recognised by the improve-
The Big Picture...
The global economy depends on
networks - be it telecommunications or transport, on the ground or
in the air.
Europe’s network airlines are indispensable for the smooth and
efficient functioning of global trade
and understanding between peoples.
“ Let me be clear on
this. I see a thriving
flourishing aviation
industry as an essential component of the
EU’s economy and a
pre-requisite for our
continued prosperity.
The concept of a shrinking world or
a ‘global village’ would not and
could not exist without air transport.
Equally, in Europe, aviation is an
essential part of the geographical,
political and social framework.
Between the 25 EU Member States
there exist 300 possible countrypair markets. While they obviously
vary in size, these are real travel
markets, particularly since the 2004
enlargement, with real levels of
demand.
Very many of these are only served
by air. For many more, in a Single
Market which stretches 4000km
from North to South and 3000km
from East to West, air is the only
practicable mode of transport.
Without air transport, the fundamental concept of the free movement of people, goods and services throughout the Community
would be meaningless.
The industry needs a period of
regulatory clarity. The ‘Lisbon
Agenda’ for European competitiveness offers a clear direction; regulation of key sectors of European
industry needs to conform to a coherent vision.
...
Our economy also
depends on air travel.
Many businesses, in
both manufacturing
and service industries,
also rely on air travel;
and it is particularly
important for many of
Within this coherent vision, disparate parts have their plac e - t he
environment, consumer concerns,
social issues - but each needs to
be addressed in the context of the
whole. They are all part of the Big
Picture.
An elemental component of the
AEA Action Plan is a High Level
Political Conference on Air Transport Policy, involving all the European Institutions - Transport and
Finance Ministers, the Commission,
the Parliament, in dialogue with the
stakeholders.
the fastest growing
sectors of the economy
’’ .
Günter Verheugen
Commission VicePresident responsible for
Enterprise and Industry
AEA would, of course, fully endorse Vice-President Verheugen’s
views. It is also very encouraging
for the industry that Vice-President
Barrot, Transport Commissioner,
has chosen to consult intensively
with AEA Presidents on strategic
issues.
With a clear understanding of the
industry’s problems, and the industry’s potential to contribute to a
successful Europe, today’s decision-makers can significantly influence the lifestyle and livelihood of
tomorrow’s European citizens.
Contents
n
n
n
n
n
n
At a Glance
Traffic Trends 2004
No- Frills ‘Bloodbat h’ - D id it Happen?
Outlook for 2005
n
n
n
Looking Forward ...
A call to Action
n AEA Action Plan - What, and Why
n Infrastructure
n Environment
n Security
n AEA Fast
Facts
AEA
n Key Statistics
n Glossary
n About
1
2
4
5
6
7
8
9
10
11
12
13
14
15
16
18
19
20
21
22
23
24
25
26
56
58
AEA Fast Facts
member airlines
30
billion € turnover
60
million passengers carried
million tonnes of cargo
316
6
destinations served
675
countries served
159
flights every day
10,700
aircraft in fleet
employees
2,400
339,000
About AEA
AEA is a non-profit making association. It operates for, and is represented jointly by all its members,
expressing the common interests
of its members at international and
governmental level. The Secretary
General acts as the Association’s
spokesman.
The AEA is governed by the full
Assembly of Presidents of its
member airlines. The Presidents
elect a Chairman to represent and
support the AEA for a period of one
year, assisted by the so-called
Presidents’ Committee, which is
composed of the past and present
Chairmen, the Chairman-elect and
nine other Presidents elected by
the Assembly.
The AEA Secretariat, with at its
head the Secretary General, is
located in Brussels and has a staff
of twenty-two.
Assembly of Presidents
Chairman 2005
Fernando Pinto, TAP Portugal
Presidents' Committee
Jean-Cyril Spinetta, Air France
Giancarlo Cimoli, Alitalia
Vagn Soerensen, Austrian
Rod Eddington, British Airways
Ivan Misetic, Croatia Airlines
Keijo Suila, Finnair
Fernando Conte, Iberia
Leo van Wijk, KLM
Wolfgang Mayrhuber, Lufthansa
Jorgen Lindegaard, SAS
Rob Kuijpers, SN Brussels Airlines
^
The Association of European Airlines is an industry organisation
representing 30 major European
airlines, with a collective turnover
of € 60bn, carrying more than 316
million passengers and 6 million
tonnes of cargo in 2004. AEA airlines operate 10,700 flights daily
with a fleet of more than 2,400 aircraft, serving 675 destinations
worldwide, with a combined staff of
just over 339,000. The membership
of AEA includes European scheduled and charter, passenger and
all-cargo carriers, operating domestic, European and international
services.
AEA Secretariat
Secretary General
Ulrich Schulte-Strathaus, Secretary General
Nathalie Mulleners, Executive Assistant
Political Communications Team
Giancarlo Crivellaro, General Manager Political Affairs
Sefik Yuksel, General Manager Trade & Social Affairs
Le Thi Mai, General Manager Infrastructure & Environment
Guenter Martis, General Manager Technical & Operations
David Henderson, Manager Information
Vincent de Vroey, Manager Operations & ATM
Nathalie Herbelles, Manager Legal Analysis
Julia Egerer, Manager Trade & Social Affairs
Doreen Blow, Event Co-ordinator
Ann Flynn, Administrative Assistant
Yvonne Hopkins, Administrative Assistant
Market Research Team
Sue Lockey, General Manager Market Research
Dario Spila, Manager Research & Analysis
Stefan Bruehlmann, Manager Strategy & Statistics
IT Team
Mario De Smedt, IT Manager
Anne-Marie Weirauch, Information Base Manager
Didier Poriau, Publishing Manager
Administration Team
Seya Immonen, General Manager Finance & Administration
Jozef Swalus, Specialist Printing & Dispatch
Miriam Swan, Administrative Assistant
Adria Airways
Kuzmiceva 7
1000 Ljubljana
Slovenia
17
1
16
0
Scheduled Destinations
within Slovenia
rest of Europe
beyond Europe
552
Employees
9
3
6
Aircraft in Fleet
Airbus A320
Canadair CRJ-200
0
Aircraft on Order
Review of 2004
st
www.adria-airways.com
Status at 31 December 2004 for information
on destinations, employees and fleet.
Owned by…
56%
Slovenian Pension Fund
20%
Slovenian Restitution Fund
6.5%
Daimond d.d.
6%
Zvon ena holding
5%
Infond - Investment Company
2%
National Finance Corporation
2%
Employees and others
1.5%
Zvon ena i.d.
1%
Zlata moneta d.d.
Adria Airways was accepted into the Star Alliance in 2004.
Adria was one of 6 new applicants, including US Airways
and South African Airways, accepted into the world’s
largest alliance last year. Following regional Scandinavian
airline Blue1 in November, Adria Airways and fellow
Balkan carrier Croatia Airlines became regional members
in December, extending the alliance’s coverage into the
new Eastern European EU countries. ‘Regional’ members
are sponsored and represented by an established alliance
member with existing links with the prospective new
partners. For Adria Airways and Croatia Airlines Lufthansa
takes this role.
Adria Airways launched a co-operation agreement with
Polish airline LOT. The agreement includes code-share
on services between the two capitals, Warsaw and
Ljubljana, timed to coincide with the accession of the two
st
countries to the European Union on 1 May 2004.
Owner of…
Major partnerships
Member of the Star Alliance.
Various code-share agreements: Aeroflot,
Austrian, Croatia Airlines, LOT Polish
Airlines, Lufthansa, Montenegro Airlines.
In the fleet Adria took delivery of an additional Canadair
Regional Jet 200. The company operates a total of six
aircraft of this type and is an authorised Bombardier
centre for heavy maintenance and overhaul checks for
CRJs in Europe. A further three Airbus A320 bring the
fleet total to 9 aircraft.
In August Adria was amongst the first airlines in the world
to receive the IATA Operational Safety Audit certificate
(IOSA).
Financial Results
€mill
Turnover
Operating profit/loss
Net profit/loss
2004
133
3.8
0.17
2003
122
3.9
0.45
Branko Lucovnik
President
Aer Lingus
Dublin Airport
Dublin
Ireland
44
3
36
5
within Ireland
rest of Europe
beyond Europe
3906
Employees
34
4
3
6
12
6
3
Aircraft in Fleet
Airbus A330-300
Airbus A330-200
Airbus A321-200
Airbus A320-200
Boeing 737-500
Boeing 737-400
11
11
Aircraft on Order
Airbus A320-200
www.aerlingus.com
Review of 2004
Throughout 2004 Aer Lingus continued its strategy of
transforming the State-owned airline into a streamlined
and profitable company. Measures taken included the
continued promotion of aerlingus.com (the website) as the
primary distribution channel, now exceeding 60% of all
bookings, fare restructuring (sale of one-way fares only,
no restrictions, changes permitted with surcharge), fare
reductions and the introduction of a new user friendly self
service check-in service.
st
The fleet currently consists of a mix of Boeing and Airbus.
The transition to an all-Airbus fleet, which is a key element
of the company’s cost saving and increase of operational
flexibility plans, is scheduled to be completed by the end
of 2005.
Owned by…
95.24% State ownership
4.76%
Aer Lingus employees
Owner of…
Major partnerships
Member of the Oneworld Alliance.
Code-share agreements with American
Airlines, British Airways, Crossair Europe,
Finnair, Iberia, KLM and SWISS.
Financial Results
€mill
Turnover
Net profit/loss
2004
906.8
107.0
1.2
The airline continued to increase its profit levels, posting
an operating profit in excess of EUR 100 million in 2004.
After deduction of exceptional costs related to on-going
restructuring, net profit stood at EUR 1.2 million.
2003
888.3
83.0
69.2
In the network, Aer Lingus introduced some seventeen
new routes in 2004, including Bristol, Liverpool, Las
Palmas, Lanzarote, Budapest and, on longhaul, Orlando
in Florida.
In the latter part of the year Chief Executive Willie Walsh
tendered his resignation and left the company in January
2005. The appointment of Dermot Mannion, currently
President of Group Support Services at Emirates, as new
Chief Executive from August 2005 was subsequently
announced.
Dermot Mannion
Chief Executive
wef August 2005
Air France
45 rue de Paris
95747 Roissy CDG Cedex
France
200
35
68
97
within France
rest of Europe
beyond Europe
71654
Employees (Group, average FY 03-04,
where air transport accounts for +/-84%.)
www.airfrance.com
252
22
13
13
67
43
7
6
25
16
4
8
8
20
Aircraft in Fleet
Airbus A340-300
Airbus A330-200
Airbus A321-100/200
Airbus A320-100/200
Airbus A319-100
Airbus A318-100
Boeing 777-300
Boeing 777-200
Boeing 747-400
Boeing 747-400F
Boeing 747-200/300
Boeing 747-200F
Boeing 737-500
34
Aircraft on Order
10
Airbus A380
3
Airbus A330-200
2
Airbus A319-100
8
Airbus A318-100
10
Boeing 777-300
1
Boeing 747-400F
st
on destinations and fleet.
Review of 2004
In May 2004, the consolidation agreement of Air France
with KLM, which was signed in October 2003, was
followed by an exchange of common shares, the issuance
of new shares and the privatisation of Air France, with the
State holding falling to 44.2%. In December 2004, the
French State subsequently reduced its equity stake
further, with the sale of 18.4% of the airline’s capital. At
the beginning of this year, in February 2005, employees
were able to acquire shares through two offerings,
whereupon the French State’s stake in the capital of Air
France-KLM dropped below 20%, to 18.7%, with 17.4% of
shares held by employees, 2% retained by the Group and
the remainder floated publicly.
Owned by…
64%
Public Float
18.7%
State ownership
17.4%
Air France employees
Owner of…
100%
Régional, Brit Air, CityJet
96%
KLM
39%
Sté Nouvelle Air Ivoire
33.4%
Air Austral
11.9%
CCM (Corsica)
7.7%
Air Mauritius
7.5%
Air Tahiti
5.6%
Tunis Air
3.6%
Cameroon Airlines
3.5%
Air Madagascar
2.9%
Royal Air Maroc
2.1%
Air Calédonie
2%
Alitalia
1.5%
Austrian
As of June 2004, the first benefits of the co-operation
between Air France and KLM came into effect, with coordinated schedules between Paris-CDG and Schiphol
hubs, complementary world networks and combinable
fares. More recently the frequent flyer programmes were
merged, named Flying Blue, effective from June 2005.
During the Spring, the company launched a new
European product offering new ground and in-flight
services, and a better targeted price schedule. On longhaul, the first 777-300ER went into service on the Paris
CDG-New York route, with the New Air France Travel
Concept.
Major partnerships
Member of SkyTeam Alliance.
Franchisees:Régional, Brit Air, CityJet, CCM.
Various code-share agreements incl. with
Austrian, China Eastern, China Southern,
Middle East Airlines, Qantas, Royal Air
Maroc, South African Airways, TAM,
Tunisair.
Financial Results (Group FY 31 March)
€mill 2004/05 2003/04
Turnover
12337
139
Net profit/loss
93
st
Jean-Cyril Spinetta
Chairman
Air Malta
Head Office
Luqa LQA05
Malta
47
2
41
4
within Malta
rest of Europe
beyond Europe
1834
Employees
14
4
4
6
Aircraft in Fleet
Airbus A320-200
Airbus A319-100
Boeing 737-300
8
5
3
Aircraft on Order
Airbus A320-200
Airbus A319-100
Review of 2004
st
www.airmalta.com
Owned by…
97.9%
State ownership
2.1%
Private shareholders
Owner of…
100%
Malta Air Charter Co Ltd
49%
AZZURRA Air
(declared bankrupt July 2004)
Major partnerships
Code-share agreement with SN Brussels
Airlines.
Financial Results (FY 31 July)
€mill 2004/03 2003/02
Turnover
219.1
215.8
9.0
8.2
Net profit/loss
(34.4)
(54.6)
st
The year under review was one of challenge and change
for Air Malta, as the industry as a whole struggled to cope
with external pressures, including the escalation in fuel
prices. In the same year Malta acceded to the European
Union, participating in the internal market as a fully
fledged Community carrier, taking advantage of the newly
extended geographical borders and rising to the challenge
of free competition.
Air Malta’s mission as a scheduled leisure airline has not
changed. However external developments have
necessitated internal change, starting with a modification
in the airline’s strategic objectives and focus on its core
operations and followed by a major re-organisation of its
top management, that culminated in the appointment of
seven Chief Officers heading the company’s Divisions,
soon to be followed by other appointments at General
Manager level and a zero-based approach to the rest of
the organisation.
During 2004 the airline also took delivery of eight new
Airbus aircraft, four A320s and four A319s, the latter being
the first of the aircraft type to be put into service at Air
Malta. Re-fleeting will continue until 2008 by which time
Air Malta will be operating an all Airbus fleet.
In the latter part of the year a code share agreement was
concluded with SN Brussels Airlines covering flights
operated by Air Malta between Malta and Brussels.
Discussions with various other carriers are on-going and a
number of code-share agreements will come into force in
2005.
Lawrence Zammit
Chairman
Alitalia – Linee Aeree Italiane Spa
Viale Alessandro Marchetti 111
00148 Roma
Italy
94
22
44
28
within Italy
rest of Europe
beyond Europe
20575
Employees
190
155
23
11
12
10
13
2
79
5
35
6
14
10
5
Aircraft in Fleet
of which Alitalia
Airbus A321
Airbus A320
Airbus A319
Boeing 777-200
Boeing 767-300
Boeing 747-200F
MD82 (3 grounded)
MD11 (2 grounded)
of which AZ Express
Embraer RJ-170
Embraer RJ-145
ATR-72
ATR-42 (1 grounded)
0
Aircraft on Order
www.alitalia.com
Review of 2004
In October 2004 the Alitalia Board adopted an Industrial
Plan (2005-2008) which provides for a split of the national
carrier into two separate companies: AZ Services and AZ
Fly. The non-core ground support business AZ Service
will include ground support, maintenance, accounting,
administration and IT. State-owned engineering holding
company Fintecna is due to take control of AZ Services
and will then dispose of the various activities involved.
Alitalia will retain the flight operations part of the company.
The Industrial Plan, which includes substantial cost cuts
and productivity improvements, was formally backed by
th
the Unions on 6 October 2004. The European
Commission is currently reviewing the Plan, which must
obtain official approval, with a pronouncement due in
2005.
st
Owned by…
62.4%
State ownership
35.7%
Private investors
2%
Air France
Meanwhile the company activated a EUR 400 million
bridging loan guaranteed by the Italian Government and
provided by the Dresdner Wasserstein Bank. The loan
was approved by the European Commission in July 2004
with a commitment from the Italian authorities to lower
their shareholding in Alitalia below 50% (the Government
currently holds a 62.4% stake).
In accordance with such commitment, a specific Decree
rd
was adopted by the Government on 3 February 2005
setting out the modalities of such privatisation.
Owner of…
100%
Alitalia Express
2%
Air France
Major partnerships
Member of SkyTeam Alliance.
JAL and Varig.
Financial Results (Group)
€mill
Turnover
Net profit/loss
2004
4074
(97)
-
2003
4320
(53)
(520)
Giancarlo Cimoli
Chairman & CEO
www.austrianairlines.co.at
Austrian
Fontanastrasse 1
P.O. Box 50
1107 Vienna
Austria
130
6
84
40
within Austria
rest of Europe
beyond Europe
7984
Employees (Group)
97
27
2
2
4
3
3
8
3
2
18
3
6
4
2
1
1
1
52
8
12
17
6
9
Aircraft in Fleet
of which Austrian
Airbus A340-300
Airbus A340-200
Airbus A330-200
Airbus A321-200
Airbus A321-100
Airbus A320-200
Airbus A319
MD83
of which Lauda Air
Boeing 777-200
Boeing 767-300
Boeing 737-800
Boeing 737-700
Boeing 737-600
Boeing 737-400
Boeing 737-300
of which Austrian arrows
Bombardier Q400
Bombardier Q300
Canadair CRJ-100
Fokker 100
Fokker 70
8
2
2
1
3
Aircraft on Order
Airbus A319
Boeing 737-800
de Havilland Dash-8
Fokker 100
Review of 2004
In February Swiss investment bank Credit Suisse First
Boston sold its remaining stake in Austrian Airlines Group,
bringing the total proportion of AUA shares in free float to
43.5%. The remaining shares in the company are split
between four groups. The OIAG Austrian Privatisation
Agency owns 39.7%. Austrian institutional investors hold
some 10.3%, Austrian Airlines 5% and Air France 1.5%.
Austrian continued to expand its ‘Focus East’ programme
to Central/Eastern Europe and into the Asia/Pacific region
where in the Summer timetable the company operated a
total of 39 destinations in Central and Eastern Europe and
15 cities in Asia and Australia, integrating Singapore and
Shanghai into the network. In June a code-share
agreement with Singapore Airlines on Vienna-SingaporeVienna was signed and Austrian achieved the complete
integration of all directly operated flights to Asia into Star
Alliance partners’ flight schedules.
st
Owned by…
39.7%
OIAG Austrian Privatisation Agency
43.5%
Free float
10.3%
Austrian Institutional Investors
5.0%
Austrian Airlines
1.5%
Air France
Austrian took delivery of its first Airbus A319 in February,
the first of an order of 7 aircraft. The 126-seater aircraft
replaces the MD-80s in the fleet. Austrian Airlines also
operates eight A320s and six A321s. In addition the group
has agreed to the purchase of 15 Fokker 100s, some of
which will be deployed to fulfil the company’s expansion
into Central and Eastern Europe. An order for an
additional Boeing 737-800 for use by leisure carrier Lauda
Air was also placed, bringing the total due in the fleet by
June 2006 to eight.
Owner of…
100%
Tyrolean Airways
100%
Lauda Air
22.5%
Ukraine International Airlines
Major partnerships
Various code-share agreements incl. with Air
China, Air India, Air Mauritius, ANA, bmi,
Croatia Airlines, Egyptair, El Al, Jat Airways,
LOT, Lufthansa, MAT, SAS, Spanair, Thai
Airways, Ukraine Intern’l and United Airlines.
€mill
Turnover
Net profit/loss
2004
2363.5
79.4
40.2
2003
2242.7
63.3
45.8
Vagn Soerensen
CEO
w w w. f l y b m i . c o m
bmi
Donington Hall
Castle Donington
Derby
East Midlands DE74 2SB
Great Britain
37
14
17
6
within the United Kingdom
rest of Europe
beyond Europe
4621
Employees
42
29
3
10
11
4
1
13
10
3
Aircraft in Fleet
of which bmi
Airbus A330-200
Airbus A321-200
Airbus A320-200
Airbus A319-100
Fokker 100
of which bmi regional
Embraer RJ-145
Embraer RJ-135
2
2
Aircraft on Order
Airbus A319
Review of 2004
In 2004 long serving Chief Executive Austin Reid retired
to be succeeded by Nigel Turner, bmi chief financial
officer. Tim Bye, bmi legal director became deputy CEO.
In 2004 on the longhaul route network, bmist introduced
Manchester-Las Vegas services, from 31 October,
supplementing the existing services from Manchester to
Washington DC and Chicago. The Winter timetable also
saw the inauguration of services from Manchester to three
Caribbean destinations – Antigua, Barbados and St Lucia.
On the shorthaul route network in 2004, bmi introduced
services from London Heathrow to Aberdeen, Inverness
and Naples, and from Aberdeen to Groningen.
st
Owned by…
50% plus 1 share BBW
(private shareholders)
30% minus 1 share Lufthansa
20%
SAS
Owner of…
100%
bmi regional
100%
bmibaby
Major partnerships
Canada, Air New Zealand, ANA, Austrian,
Gulf Air, LOT Polish Airlines, Lufthansa,
Qatar Airways, Royal Brunei Airlines, SAS,
Singapore Airlines, South African Airways,
Spanair, Sri Lankan Airlines, TAP Portugal,
Thai Airways, United Airlines, Virgin Atlantic.
£ mill
Turnover
Net profit/loss
2004
830
2.1
Plans to supplement the longhaul network with services to
India, were made possible in late 2004 when a new
bilateral package was agreed between the UK and Indian
Governments. The bid was however, subsequently
reverted to a UK CAA scarce capacity hearing, with
several UK carriers vying for the 21 available weekly
frequencies. Following this process bmi was awarded four
frequencies, London-Mumbai, falling short of expectation.
The carrier has appealed against the decision.
The company entered into new codeshare agreements in
2004, with Singapore Airlines in March, Sri Lankan
Airlines in May and with Qatar Airways in November. bmi
also requested authority from the US Department of
Transport to launch codeshare operations with US
Airways on domestic flights within the UK and the US and
on routes to third countries. The company already
codeshares with another Star Alliance member, United
Airlines.
In the fleet, bmi took delivery of its first Airbus A319, of 6
aircraft ordered. The 130-seater A319 will be used to
replace the Fokker 100, to be used on shorthaul
operations. Delivery of the remaining A319 aircraft in 2005
will complete the transition to an all Airbus fleet for
mainline longhaul and shorthaul operations. Single fleet
operations also exist for bmi regional, operating Embraer
type aircraft and low-cost subsidiary bmibaby, operating
Boeing 737 type aircraft.
2003
772
(9.8)
Sir Michael Bishop CBE
Chairman
Nigel Turner
CEO
www.britishairways.com
British Airways plc
Waterside
P.O. Box 365
Harmondsworth UB7 0GB
Great Britain
159
19
66
74
rest of Europe
beyond Europe
47370
Employees (Group*)
293
6
27
33
43
21
13
57
10
19
5
28
16
5
10
Aircraft in Fleet (Group*)
Airbus A321
Airbus A320
Airbus A319
Boeing 777
Boeing 767-300
Boeing 757-200
Boeing 747-400
Boeing 737-500
Boeing 737-400
Boeing 737-300
Embraer RJ-145
Avro RJ100
BAe 146
de Havilland Dash-8
7
1
3
3
Aircraft on Order
Airbus A321
Airbus A320
Airbus A319
Review of 2004
After 21 years as CE and Chairman, Lord Marshall retired.
British Airways’ new Chairman is Martin Broughton.
st
With the close of its 2003/2004 financial year on 31
March 2004, British Airways completed its two year Future
Size and Shape programme. The company concluded
with an improved financial position, the result of a far
reaching cost cutting exercise, which included a 13,000
headcount reduction. The new Business Plan 2004-2006
aims to achieve a 10% operating profit margin.
In September British Airways completed the sale of its
18.25% shareholding in Australian carrier Qantas,
purchased in March 1993. The joint service agreement
between the two companies was given draft approval for a
5 year extension.
The company signed an extensive code-share
arrangement with American Airlines on flights between US
and UK gateways and beyond, and an agreement to
develop a joint business with partner Iberia on key routes
between London and Spain.
st
* Group includes BA and BA CitiExpress.
Owned by…
100%
Publicly quoted company.
Owner of…
100%
British Airways CitiExpress
18.3%
Comair (South Africa)
10%
Iberia
Major partnerships
Franchisees: British Mediterranean, Comair
(South Africa), GB Airways, Loganair (UK)
and Sun-Air (Denmark).
Aer Lingus, America West, American
Airlines, Cathay Pacific, Finnair, Iberia, JAL,
LAN Airlines, Qantas and SN Brussels
Airlines.
With a new bilateral agreement between the UK and
India, and following a scarce capacity hearing at the UK
CAA, British Airways was awarded 7 services to India,
being 4 additional services to Chennai and 3 new services
to Bangalore. British Airways has appealed this decision.
In October British Airways received its first Airbus A321. A
total of six A321s were deployed by year-end, the 194seater being used on high density shorthaul routes.
More recently, Rod Eddington announced his departure at
the end of September 2005 from the airline he has led
since 2000. He will be succeeded by William Walsh,
former CEO of Aer Lingus, who was appointed CEdesignate in May 2005.
Financial Results (Group, FY 31 March)
£ mill 2004/05* 2003/04
Turnover
5924
7560
500
405
Net profit/loss
242
132
st
* Refers to 9-months to December 2004 only
Rod Eddington
Chief Executive
William Walsh
Chief Executive designate
Cargolux Airlines International
Luxembourg Airport
L-2990 Luxembourg
Grand Duchy of Luxembourg
63
1
9
53
within Luxembourg
rest of Europe
beyond Europe
1298
Employees
13
13
Aircraft in Fleet
Boeing 747-400F
2
2
Aircraft on Order
Boeing 747-400F
cargolux
Review of 2004
The air cargo market showed a strong performance in
2004 growing by 13% measured in freight tonnekilometres. Cargolux outperformed the market growth by
th
2.4% and ended the year as the 8 largest cargo carrier
worldwide (international ranking). The company reached
the USD 1 billion revenue mark for the first time.
st
www.cargolux.com
Owned by…
34.9%
Luxair
33.7%
SAir Lines
31.1%
Luxembourg financial institutions
0.3%
Others
Owner of…
Major partnerships
Various agreements incl. with Aeromexpress,
Alitalia, AZAL (Azerbaijan), China Easteran
Airlines, China Cargo Airlines, Finnair and
Pacific East Asia Cargo.
US$ mill
Turnover
Net profit/loss
2004
1205.9
80.7
83.5
2003
954.3
64.9
70.9
In the fleet, Cargolux added an aircraft in 2004 bringing
the company’s single aircraft fleet total to thirteen Boeing
747-400Fs. Two further aircraft orders were placed during
the year for delivery in October (new) and December
(used) 2005.
In 2004 Cargolux furthered its co-operation with China
Eastern Airlines/China Cargo Airlines in August and
launched a partnership agreement in November with
Finnair for a new route from Luxembourg, Helsinki to
Hong Kong.
The company inaugurated several new destinations,
concentrated in Africa: Kinshasa, Lagos, Eldoret in Kenya
and Lusaka. These connect via Nairobi, Johannesburg,
Beirut and/or Sharjah to Maastricht and homebase
Luxembourg. Other new services included an Asia-Spain
connection, between Hong-Kong and Barcelona.
In December Cargolux and SITA Information Networking
Computing agreed to launch a new joint company, Champ
Cargo Systems dedicated to providing IT solutions to the
air cargo industry, such as data exchanges with third
parties, shipment tagging, warehousing, etc. Cargolux will
take a 49% stake in the company.
Ulrich Ogiermann
President & CEO
Croatia Airlines
Savska 41
10000 Zagreb
Croatia
26
8
17
1
within Croatia
rest of Europe
beyond Europe
1080
Employees
11
3
5
3
Aircraft in Fleet
Airbus A320-200
Airbus A319-100
ATR 42-300
0
Aircraft on Order
Review of 2004
st
www.croatiaairlines.hr
Owned by…
2.15%
State agency
1.46%
Croatian Privatisation Fund
0.79%
Private individuals
0.83%
Other shareholders
Owner of…
-
In 1989 the first Croatian carrier was established. The
company, known as Zagal or Zagreb Airlines, was
renamed Croatia Airlines in 1990, following the country’s
first democratic elections. In a year in which the company
th
celebrated the 15 anniversary of its creation, Croatia
Airlines experienced Croatia’s accession to the European
st
Union on 1 May 2004, and was accepted as a member of
the Star Alliance. Croatia Airlines was one of 6 new
partners accepted to the Star Alliance in 2004, including
US Airways and South African Airways. Croatia Airlines
and fellow Balkan carrier Adria Airways became active
regional members of the alliance in December 2004,
extending the alliance’s coverage into the accession
Eastern European countries. ‘Regional’ members of the
Star Alliance must be sponsored and represented at
administrative level, by an established alliance member
with close commercial links with the applicant carrier. This
role was fulfilled by Lufthansa.
In a further development of its visual identity Croatia
Airlines launched a new aircraft tailfin design in 2004.
Major partnerships
Adria Airways, Air France, Alitalia, Austrian,
CSA, Lufthansa, LOT, SN Brussels Airlines
and Turkish Airlines.
Financial Results
€mill
Turnover
Net profit/loss
2004
2003
173.3
17.1
2.0
In the fleet, Croatia Airlines introduced an Airbus A319,
leased from Lufthansa for the Summer timetable, from
April to October. The company operates a total of 11
aircraft, including five Airbus A319-100, three Airbus
A320-200 and three regional ATR 42-300.
Ivan Mišetic
President & CEO
www.czech-airlines.com
Czech Airlines
Head Office
Ruzyne Airport
160 08 Prague 6
Czech Republic
50
3
44
3
within the Czech Republic
rest of Europe
beyond Europe
4889
Employees
45
4
14
15
4
8
Aircraft in Fleet
Airbus A310-300
Boeing 737-500
Boeing 737-400
ATR-72
ATR-42
4
4
Aircraft on Order
ATR-42
Review of 2004
In June 2004 the CSA company strategy for 2004-2014
was approved by its shareholders. The main objective is
to achieve profitability and efficiency by optimal use of
internal resources and to achieve external expansion. The
latter will be made possible by fleet renewal and
expansion, network development and optimisation of
membership of the SkyTeam alliance, which CSA joined
in 2001.
st
on destinations and fleet. Employees as at
June 2004.
Owned by…
56.43% Czech National Property Fund
34.59% Czech Consolidation Bank
4.33%
Czech insurance company
2.94%
City of Prague
0.98%
City of Bratislava
0.49%
Shares for Endowment Fund
0.24%
National Property Fund of the
Slovak Republic
Owner of…
Major partnerships
Member of the SkyTeam Alliance.
Various agreements incl. with Air France,
Aeroflot, Aeromexico, Aerosvit Airlines
(Ukraine), Air Malta, Atlantic Southeast
Airlines, Bulgaria Air, Comair, Croatia
Airlines, Delta Air Lines, Finnair, Iberia, Jat
Airways, KLM, Lithuanian Airlines, Lufthansa,
Malev, Olympic Airlines, SkyEurope Airlines,
SN Brussels Airlines, SWISS, TAROM and
Turkish Airlines.
Financial Results
US$ mill
Turnover
Net profit/loss
2004
22.9
In August 2004 CSA enhanced co-operation with
SkyTeam member Malev of Hungary, increasing their
code-share operations. Code-share operations with
Lufthansa, belonging to the Star Alliance, were terminated
at the end of October.
In the network CSA added 7 new destinations in its
Summer timetable - Samara, Yekaterinburg, Baku,
Krakow, Dortmund, Luxemburg, and Marseille – and a
further three with effect from the Winter timetable London-Gatwick, Glasgow and the Maldives. CSA also
introduced a regular Prague-Marseille-Barcelona service.
The fleet grew by 10 aircraft in 2004, to a total of 45, as
part of the expansion and modernisation program. Three
ATR-42s, six Boeing 737s and one Airbus A31 were
added. Deliveries of the remaining turbo-props on order
will be completed by 2007. The longhaul fleet will be
reviewed in 2006. The medium haul aircraft, the backbone
of the company’s fleet, will undergo a complete change
between 2005 and 2014 with the 737-400s and -500s to
be replaced by A320s and new generation B737s. In
October CSA placed an order for six 162-seater A320s
and six 135-seater A319s due for delivery between 2006
and 2008. Until such time, CSA will take an operating
lease on two A321s for charter flights and three A320s for
regular flights.
2003
673.3
28.0
19.5
Jaroslav Tvrdik
President, CEO
Chairman of the Board
www.cyprusairways.com
Cyprus Airways Ltd
21 Alkeou Street
2404 Engomi
P.O. Box 21903
1514 Nicosia
Cyprus
31
2
20
9
within Cyprus
rest of Europe
beyond Europe
1831
Employees
12
2
8
2
Aircraft in Fleet
Airbus A330-200
Airbus A320-200
Airbus A319-100
0
Aircraft on Order
Review of 2004
Cyprus Airways is implementing a restructuring plan to
counter recent poor financial results. Cyprus, home of
Cyprus Airways, was one of the ten accession countries
st
to join the European Union on 1 May 2004 bringing with it
a tougher competitive environment in deregulated skies.
The plan will involve job losses, a fleet reduction and
network review to achieve cost reductions and improve
finances and productivity.
st
Owned by…
30.38% Private shareholders
Owner of…
100%
Eurocypria
75%
Hellas Jet
Major partnerships
Aeroflot, Alitalia, El Al, Gulf Air, KLM, LOT,
Olympic Airlines, SN Brussels Airlines,
Syrianair and Royal Jordanian.
In 2004 Cyprus Airways increased its holding in its
subsidiary Hellas Jet, from 49% to 75%. Athens-based
Hellas Jet was established in 2002 and launched in June
2003, following a failed attempt to participate in the
privatisation of Olympic Airways. Prior to the membership
of Cyprus in the EU, the company’s holding was limited to
a minority stake. Hellas Jet operates a fleet of Airbus
A320s, flying from Athens to Manchester, London, Paris
and Brussels.
For the fleet, following the completion of a fleet renewal
process embarked on in 2002 and finalised in 2003, the
Cyprus Airways fleet is an all-Airbus fleet of 12 aircraft:
two A330, eight A320 and two A319. As a first step in the
implementation of the restructuring plan the company put
two A320s up for sale in October 2004.
Financial Results
€mill
Turnover
Net profit/loss
2004
246.9
(42.2)
(35.8)
2003
244.7
(44.2)
(29.0)
Lazaros Savvides
Chairman
Christos Kyriakides
General Manager
Finnair Oy
P.O. Box 15
01053 Finnair
Finland
57
16
32
9
within Finland
rest of Europe
beyond Europe
9430
Employees
52
6
12
11
7
10
6
Aircraft in Fleet
Airbus A321-200
Airbus A320-200
Airbus A319-100
Boeing 757-200
MD82/MD83
MD11
12
12
Aircraft on Order
Embraer RJ-170
www.finnair.com
Review of 2004
In May, Finnair acquired the remaining shares in the
Swedish airline Nordic Airlink, now called flynordic, raising
its stake in the company from 85% to 100%. Finnair also
owns a 49% stake in Estonian carrier Aero Airlines. The
latter operated Finnair’s former ATR fleet in 2004 on
domestic routes in Finland on behalf of Finnair.
st
Owned by…
65%
Public bodies, of which
58.4% State owned
13%
Registered in name of nominee
7%
Households
5%
Financial institutions
5%
Private companies
4%
Associations
Owner of…
100%
flynordic (Sweden)
49%
Aero Airlines (Estonia)
Major partnerships
Various code-share agreements, with: Air
France, American Airlines, British Airways,
Iberia, Malev, Qantas, SN Brussels Airlines,
SWISS and Sun Air.
€mill
Turnover
Net profit/loss
2004
1698
17
12
2003
1558
(19)
(16)
In August Helsinki-Vantaa airport inaugurated an
expansion to the International Flights Terminal, which will
be used by Finnair’s Asian flight passengers. The
expansion of its Asian traffic is a key element of Finnair’s
business strategy and Finnair flights to the area have
doubled during the past two years. Summer 2004
timetable included daily services to Beijing and Bangkok,
five times a week to Shanghai and Osaka, four times to
Singapore, three times to Hong Kong and twice to Tokyo,
making a total of 15 weekly operations to China and daily
services to Japan. And more expansion is planned.
Summer 2005 timetable will include direct flights to Hong
Kong and increased frequencies to Singapore, and from
September 2005 a new service to the economically
significant Guangzhou (Canton) in China.
In the fleet Finnair completed its transition to Airbus
th
narrow-bodies, with the arrival of the 11 A319. Replacing
DC9s and MD80s in the fleet, the company now operates
29 Airbus aircraft; eleven A319s, twelve A320s and six
th
A321s. Year 2004 further saw the arrival of a 6 MD-11 in
the longhaul fleet, for use on Asian destinations. In
addition to the Finnair fleet of 52 aircraft, subsidiaries of
the Finnair Group flynordic and Aero Airlines operate 8
MD82/83s and nine ATR-72 respectively. The Group
placed an order for 12 new 76-seater Embraer 170 jet
aircraft with option for a further 8 aircraft, scheduled for
delivery between September 2005 and February 2007.
Finnair Group has renewed half of its fleet in five years
and, on completion, will operate Embraer 170s, Airbus
narrow-bodies, 7 Boeing 757s and 5 longhaul MD-11s.
Keijo Suila
President & CEO
Líneas Aéreas de España SA
Calle Velazquez 130
28006 Madrid
Spain
96
35
32
29
within Spain
rest of Europe
beyond Europe
24993
Employees (Group)
159
7
18
11
58
7
13
2
2
1
14
24
2
Aircraft in Fleet
Airbus A340-600
Airbus A340-300
Airbus A321-200
Airbus A320-200
Airbus A319-100
Boeing 757-200
Boeing 747-400
Boeing 747-300
Boeing 747-200
MD88
MD87
DC8F
5
2
3
Aircraft on Order
Airbus A321-200
Airbus A320-200
www.iberia.com
Review of 2004
In 2004 Iberia continued to tighten links with British
Airways, signing a new code share agreement for routes
between London-Heathrow to Madrid and Barcelona,
which took effect in January 2005.
During the year Iberia added new destinations including
Lagos in Nigeria and Montevideo in Uruguay. The
company decided to close its ‘mini-hub’ in Miami for
Central American connections, and to launch direct flights
from Madrid to destinations such as Costa Rica,
Guatemala and Panama, with local flights to other
regional airports in code-share with TACA.
A code-share agreement was also reached with Mexicana
to transport Iberia passenger traffic within Mexico, whilst
providing reciprocal arrangements for Mexicana
passengers in Spain.
st
Owned by…
60%
Floating
30%
Banks and various companies
9%
British Airways
1%
American Airways
Owner of…
Major partnerships
Franchisee: Iberia Regional
American Airlines, Avianca, British Airways,
Cathay Pacific, CSA, El Al, Finnair, JAL,
LAN, Lithuanian Airlines, Maersk, Mexicana,
Qantas, Royal Air Maroc, Royal Jordanian,
SN Brussels Airlines, SWISS, Syrian Arab
Airlines, TACA, TAM, TAROM, Ukraine
International Airlines.
€mill
Turnover
Net profit/loss
2004
4805.4
203.3
220.0
Iberia’s seat supply on routes connecting Spain and South
America was increased by 25% year-on-year to meet
strongly growing demand. New Airbus A340-600s went
into service on these and other longhaul routes. The new
aircraft came equipped to accommodate Iberia’s business
passengers in the new and enhanced Business Plus
service class, which will be extended to all Iberia longhaul flights in the course of 2005.
Spain’s airports authority assigned the new Terminal 4 at
Madrid-Barajas airport almost exclusively to Iberia and its
Oneworld alliance partners, which helped consolidate
both the airport’s position as the main Southern European
air travel hub, and Iberia’s position as market leader on
routes between Europe and Latin America.
2003
4619.3
160.7
145.9
Fernando Conte
Chairman & CEO
Icelandair
Reykjavik Airport
101 Reykjavik
Iceland
25
1
16
8
within Iceland
rest of Europe
beyond Europe
1020
Employees
16
2
1
13
Aircraft in Fleet
Boeing 767-300
Boeing 757-300
Boeing 757-200
0
Aircraft on Order
Review of 2004
st
www.icelandair.com
In early 2004 the Group established a new subsidiary,
Flugleidir Investment Company which will determine
investment and growth prospects for the Group. The
Group made its first significant investment in October with
the purchases of 8.4% of stock in the UK-company
easyjet, followed by the quick addition of a further 1.7%.
Icelandair Group has thus taken a 10.1% stake holding in
easyJet. In November the Group increased its share
capital.
Owned by…
100%
Flugleidir - Icelandair Group
Owner of…
Major partnerships
Code-share agreement with SAS.
ISK mill
Turnover
Net profit/loss
2004
42587
1929
3419
Icelandair, member airline of the AEA, is one of 13
companies controlled by the Flugleidir-Icelandair group,
an investment company specialising in airline operation
and travel services. Strategic decisions and budgetary
issues are co-ordinated by the parent company. Icelandair
is the Group’s largest subsidiary, contributing 50% of the
Group’s total turnover. Icelandair works closely with the
two other subsidiaries involved in air transport operations,
Lofleidir Icelandic (charter) and Icelandair cargo.
2003
37561
1983
1121
In the network, Icelandair introduced six new destinations
in 2004; Berlin, Hamburg, Munich, Milan, Helsinki and
Madrid. As of next year, May 2005, a sixth destination in
the US is scheduled. Flights to San Francisco, being the
company’s first destination on the US West coast, will be
operated by 260-seater Boeing 767 aircraft. Existing
gateways in the US are Minneapolis/St. Paul, Boston,
New York-JFK, Baltimore/Washington-BWI and Orlando.
In early 2005 Sigurdur Helgason
announced his retirement from the
company after thirty years of which
twenty as CEO. He will leave the
st
carrier
on
31
May.
Mrs.
Ragnhildur Geirsdóttir and Mr. Jón
Karl Ólafsson were nominated as
Group CEO and CEO Icelandair
respectively.
Ragnhildur Geirsdóttir
Group CEO
st
(wef 1 June 2005)
Jón Karl Ólafsson
CEO Icelandair
st
(wef 1 June 2005)
JAT Airways
Bulevar umetnosti 16
11000 Beograd
Serbia & Montenegro
40
3
30
7
within Serbia & Montenegro
rest of Europe
beyond Europe
3528
Employees (2003)
22
3
8
2
1
4
4
Aircraft in Fleet
Boeing 737-400
Boeing 737-300
Boeing 727-200
Douglas DC10
Douglas DC9-30
ATR-72-200
8
8
Aircraft on Order
Airbus A319-100
Review of 2004
In 2004 Jat Airways entered into a code-share agreement
with Austrian on the Vienna-Belgrade route and with
Lufthansa on the Belgrade-Frankfurt and BelgradeMunich routes.
www.jat.com
st
st
on destinations and fleet; at 31 December
2003 for employees.
Owned by…
100%
State ownership
Owner of…
Major partnerships
Code-share agreements with Austrian, CSA
and Lufthansa.
Financial Results
YUN mill
Turnover
Net profit/loss
2004
2003
10200
(412)
(412)
In the network Jat Airways launched new services from
Belgrade to Stuttgart and Dusseldorf, expanding the
company’s German presence, which currently includes
services to Munich, Frankfurt and Berlin, from Nis to
Paris, Zurich and Tivat in Montenegro, effective from the
Summer timetable. In December services between
Belgrade and Basle, on the Swiss-French border, were
launched. A code-share agreement with Uzbekistan
Airways was discontinued.
The anticipated launch of the Jat Airways regional carrier,
first announced in 2003, has been postponed until 2005.
The company aims to develop its local presence through
a new, low-cost, regional airline, named Interair Link. This
wholly-owned subsidiary will operate five ATR-72s
transferred from the parent company’s fleet, flying feeder
routes into Belgrade. Start-up destinations will include:
Ljubljana (Slovenia), Sarajevo and Banja Luka (Bosnia),
Skopje and Ohrid (Macedonia), Tirana (Albania),
Podgorica (Serbia and Montenegro), Sofia (Bulgaria),
Trieste (Italy) and Thessaloniki (Greece).
For the fleet the carrier is contemplating a 10-year fleet
renewal plan, which would involve the sale of the oldest
aircraft in the fleet to be replaced by 60/70-seater aircraft.
More recently in February 2005, Mr. Aleksandar
Milutinovic, who held the position of President & CEO
since March 2004, was succeeded by Mr. Nebojsa
Starcevic as interim Director General.
Nebojsa Starcevic
Acting Director General
KLM
P.O. Box 7700
Schiphol Airport 1117ZL
The Netherlands
80
1
35
44
within the Netherlands
rest of Europe
beyond Europe
34529
Employees
100
8
12
5
17
3
5
13
13
14
10
Aircraft in Fleet
Boeing 777-200
Boeing 767-300
Boeing 747-400
Boeing 747-400 Combi
Boeing 747-400F
Boeing 737-900
Boeing 737-800
Boeing 737-400
Boeing 737-300
MD11
10
6
4
Aircraft on Order
Airbus A330-200
Boeing 777-200
www.klm.com
Review of 2004
Status at 31st December 2004 for information
Owned by…
96%
Air France-KLM
Owner of…
100%
KLM cityhopper
100%
KLM cityhopper uk
100%
Transavia Airlines
50%
Martinair
26%
Kenya Airways
20%
Kencargo Airlines International
Major partnerships
Member of SkyTeam.
Various agreements incl. with Air Alps, Air
Europa, Air France, Alaska Airlines, Aer
Lingus, China Southern Airlines, Comair,
Continental Airlines, CSA, Cyprus Airways,
Gulf Air, Kenya Airways, KLM cityhopper,
Lithuanian Airlines, Maersk Air, Martinair,
MAS, Malev, Northwest Airlines, Origin
Pacific Airways, Philippine Airlines, Surinam
Airways, Syrianair, TAM, Transavia Airlines,
Ukraine International Airlines.
In Autumn 2003 KLM and Air France announced an
unprecedented consolidation move in European air
transport, with the combination of the two carriers to be
known as Air France-KLM. Having gained approval of the
European and US competition authorities in early 2004, a
share exchange took place in May 2004 whereby Air
France acquired 86% of KLM’s share capital. The
company was subsequently de-listed. In the course of
2004 the two companies continued to implement their cooperative activities as planned and in September KLM, as
well as US partner airlines Northwest and Continental,
joined the SkyTeam alliance led by Air France and Delta.
In November KLM discontinued its franchise agreement
with regional carrier KLM exel. The company now
operates as Air Exel, with some services temporarily
performed on behalf of KLM.
Also in November a new code-share agreement was
announced, with Gulf Air, the national airline of Abu
Dhabi, Bahrain and Oman. The move adds destination
points Islamabad, Karachi and Lahore in Pakistan, and
Muscat in Oman to the KLM offer, with KLM code-share
available on Gulf Air flights between Bahrain and Muscat.
st
With effect from 1 January 2005 KLM ‘no frills ’ unit
Basiqair is to be renamed Transavia, to be integrated into
the latter’s charter operations.
In the fleet February saw the delivery of the last of three
Boeing 747-400 freighters for use on routes to the Far
East. Both passenger and cargo capacity to Asia were a
main focus in 2004. In December an additional order for
two Boeing 777 was placed, for delivery in 2006, which
will bring the total of this aircraft type in the fleet to twelve.
Financial Results (Group, FY 31 March)
€mill 2004/05 2003/04
Turnover
5877
120
Net profit/loss
24
st
Leo M. van Wijk
President & CEO
LOT Polish Airlines
ul.17 Stycznia 39
00-906 Warszawa
Poland
59
9
46
4
within Poland
rest of Europe
beyond Europe
3788
Employees
48
35
3
2
6
4
6
14
13
8
5
Aircraft in Fleet
of which LOT
Boeing 767-300
Boeing 767-200
Boeing 737-500
Boeing 737-400
Embraer RJ-170
Embraer RJ-145
of which EuroLot
ATR-72
ATR-42
5
1
4
Aircraft on Order
Boeing 767-300
Embraer RJ-170
www.lot.com
Review of 2004
In 2004 LOT was hoping to gain approval for its first public
offering (IPO) on the Warsaw stock exchange from the
Polish Government, for implementation within the year.
The sale would provide the financial resources needed to
fund a fleet renewal and development activities. LOT is
68% State-owned, a further 25% is owned by the defunct
Swissair, with the remainder the property of LOT
employees.
In December LOT announced the launch of its no-frills
airline, to address the competitive environment in Poland.
The country was one of 10 accession countries to join the
st
European Union on 1 May 2004. CentralWings, which is
due to start operations in 2005, will be independent of
LOT, with its own management. It will operate with up to 5
Boeing 737 aircraft from the LOT mainline fleet, on
destinations from Warsaw Okecie airport.
st
Owned by…
67.97% State treasury
25.10% Receiver of SAir Lines
6.93%
Employees
Owner of…
100%
EuroLot
100%
CentralWings
Major partnerships
Adria Airways, Aeroflot, Aerosvit Airlines, Air
Canada, ANA, Asiana Airlines, Austrian,
Balkan Air Tour, Belavia, bmi, Croatia
Airlines, Cyprus Airways, El Al, Lufthansa,
Malev, SAS, Spanair, TAP Portugal,
TAROM, Turkish Airlines, and United
Airlines.
US regulators approved blanket code-share agreement
between Star Alliance partners LOT and United Airlines.
The company also entered agreements with Air Canada,
Adria Airways and TAP Portugal.
In the fleet, March saw the arrival of the first Embraer RJ170s. Ten aircraft have been ordered, six were delivered
in 2004, with the remaining four for delivery in 2005, for
use on high-frequency destinations. The company has
options on a further 11 aircraft. LOT introduced the first
Embraer aircraft into its fleet in 1999, with the RJ-145 of
which it has fourteen. LOT entered into a contract with
Embraer to establish an authorised service centre in
LOT’s technical service works. With a European
Certificate JAR 145, LOT can now undertake technical
maintenance services for Embraer aircraft for third parties.
Financial Results
€mill
Turnover
Net profit/loss
2004
645.0
(3.2)
4.0
2003
642.4
1.6
(24.5)
Marek Grabarek
President & CEO
Deutsche Lufthansa AG
2-6 Von-Gablenz-Strasse
50679 Cologne
Federal Republic of Germany
190
18
86
86
within Germany
rest of Europe
beyond Europe
90673
Employees (Group, of which Passenger
and Cargo air transport account for 39680)
www.lufthansa.com
402
238
2
1
161
18
25
18
8
20
61
11
Aircraft in Fleet
of which Lufthansa, LH CityLine
and LH Cargo
Airbus A340-600
Airbus A340-300
Airbus A330-300
Airbus A330-200
Airbus A321
Airbus A320
Airbus A319
Airbus A300-600
Boeing 747-400
Boeing 737-500
Boeing 737-300
MD11F
of which PrivatAir (operating on
behalf of Lufthansa)
Airbus A319
Boeing 737-700
of which Lufthansa Regional
Avro RJ85
ATR 72
ATR 42
BAe 146-100/200/300
Canadair CRJ-700
Canadair CRJ-100/-200
de Havilland Dash-8
31
16
7
4
4
Aircraft on Order
Airbus A380
Airbus A340-600
Airbus A330-300
MD11F
10
30
5
2
26
33
13
15
30
26
33
15
3
st
Owned by…
91.4%
Free float
8.6%
Block Ownership
Review of 2004
The Lufthansa Group focused on ensuring the long-term
viability of its core passenger transport business.
Passenger numbers reached an all-time high and the
company turned in a net profit in 2004, after the company
maximised market opportunities, expanded and sold extra
capacity, and took further steps to ensure its product
differentiation. Such steps included the opening of a
dedicated First Class terminal as well as First Class
lounges at Frankfurt airport in December, the introduction
of on-flight internet connectivity and an improved business
class product.
Lufthansa raised EUR 740 million in a rights issue in June
2004. The capital increase is designed to fund investment
in Lufthansa’s future as a network carrier. It will provide
resources to purchase the new A380 and prepare for
services with the Airbus megaliner on profitable longhaul
routes when it joins the fleet in 2007.
Lufthansa and Air China prolonged their successful
maintenance and engineering joint venture for a further 25
years in August 2004. Lufthansa Cargo and Shenzhen
Airlines jointly founded the Chinese cargo carrier ‘Jade
Cargo International’ in October. Both partnerships will
help further strengthen Lufthansa’s position in Asia.
Lufthansa sponsored the entry of Adria Airways and
Croatia Airlines as regional partners into the Star Alliance
in September.
At year-end, Lufthansa placed additional orders for seven
Airbus A340-600s, scheduled for delivery in 2006 and
2007, when the first Airbus A380 will also be joining the
Lufthansa fleet.
Owner of…
100%
Lufthansa Cargo
100%
Lufthansa CityLine
100%
Air Dolomiti
49%
Eurowings
30%
bmi
25%
Jade Cargo International
14.44% Luxair
10%
Condor
th
This year 2005, marks the 50 anniversary of the
resumption of air traffic in Germany and of Lufthansa’s reentry into the airline community after World War II.
Major partnerships
Franchisees (Lufthansa Regional): Air
Dolomiti, Augsburg Airways, LH CityLine,
Contact Air, Eurowings.
Aegean Airlines, Air China, Air One, Cimber
Air, CSA, Cirrus Airlines, Luxair, Maersk Air,
Shanghai Airlines, South African Airways.
€mill
Turnover
Net profit/loss
2004
16965
1004
404
2003
15957
(147)
(984)
Wolfgang Mayrhuber
Chairman & CEO
Luxair
Luxembourg Airport
2987 Luxembourg
39
1
31
7
within Luxembourg
rest of Europe
beyond Europe
2177
Employees
Review of 2004
16
2
3
3
8
Aircraft in Fleet
Boeing 737-700
Boeing 737-500
Fokker 50
Embraer RJ-145
Following a difficult 2003, Luxair posted an operational
result close to break-even in 2004, due to strong
performance by the cargo activities. Cost-cutting
measures will continue into 2005 to further improve the
viability of the company.
3
1
2
Aircraft on Order
Boeing 737-700
Embraer RJ-135
In 2004, Luxair prepared the ground for a fleet
modernisation which will be the cornerstone of the
company’s 2005 strategy. In February the company
received 2 of 3 Boeing 737-700s on order, to replace the
737-400s. The 141-seater aircraft will be deployed by inhouse Tour Operator Luxair Tour, mainly to destinations
in Africa and the Middle East.
st
www.luxair.lu
Owned by…
25.2%
Banks
23.1%
State ownership
13.4%
State-owned bank
13.2%
Luxair Group and others
13.0%
Lufthansa
12.1%
Panalpina World Transport
In July Luxair converted options to order two Embraer RJ135 aircraft, with one more option still held. The 37seaters were delivered in January and February 2005 and
will replace the Fokker 50s in the fleet. As the Embraer
RJ-135 is one of the few jets certified to operate at
London City Airport, Luxair opted for this aircraft to
develop LCY as a destination in the future.
Owner of…
34.88% Cargolux
Major partnerships
Various agreements incl. with Air France,
Austrian and Lufthansa.
€mill
Turnover
Net profit/loss
2004
306.0
3.9
13.4
2003
289.1
(4.1)
3.6
As from February 2005 and the phase out of one Boeing
737-500 and three Fokker 50, the Luxair fleet is
composed of three Boeing 737-500, two Boeing 737-700,
eight Embraer RJ-145 and two RJ-135 aircraft.
In 2004 Luxair shareholders elected Marc Hoffmann as
new chairman, taking over from Alain Georges whose
three-year term expired in May.
In mid-February 2005, Luxair CEO and Executive
Committee President Christian Heinzmann left the
th
company. On February 25 2005, the board nominated
Adrien Ney as his successor. Adrien Ney will take over his
st
functions on 1 June 2005 latest and Jean-Pierre
Walesch, Executive Vice President Finance, has been
appointed CEO for the interim period.
Jean-Pierre Walesch
Interim CEO
Adrien Ney
President & CEO
st
(wef 1 June 2005)
Malev Hungarian Airlines
Könyves Kálmán krt. 12-14
1097 Budapest
Hungary
58
1
50
7
within Hungary
rest of Europe
beyond Europe
2776
Employees
www.malev.hu
Review of 2004
28
2
4
6
6
1
5
4
Aircraft in Fleet
Boeing 767-200
Boeing 737-800
Boeing 737-700
Boeing 737-600
Boeing 737-400
Fokker 70
Canadair CRJ-200
2
1
1
Aircraft on Order
Boeing 737-800
Boeing 737-700
th
Malev celebrated its 50 anniversary in 2004. Founded as
the Soviet-Hungarian joint venture ‘Maszovlet’ in 1946,
Malev became an independent company in 1954,
adopting its current name, when the Soviet Union
relinquished its 50% holding to Hungary.
In December 2004 APV, the Hungarian State-holding
company and owner of Malev, launched a second bid for
tender after an unsuccessful attempt earlier in the year.
The government has approved plans to privatise Malev,
with 99.95% shareholding up for sale. Bids should be filed
by end February 2005.
st
Owned by…
97.9%
State privatisation and assets
handling company
1.1%
Municipalities
0.9%
Private shareholders and other
organisations
Owner of…
100%
Malev Express
Major partnerships
Various agreements incl. with Air Bosna, Air
Europa, Aeroflot, Aerosvit Airlines (Ukraine),
Air France, Alitalia, Austrian, Balkan Air,
Bulgaria Air, CSA, Finnair, Hainan Airlines,
KLM, LOT, Moldavian Airlines, Northwest
Airlines, SN Brussels Airlines, TAP Portugal
and TAROM.
Financial Results
HUF bn
Turnover
Net profit/loss
2004
125.7
(6.3)
(4.8)
2003
110.7
(9.7)
(13.5)
In March Malev signed a memorandum of intent to
support its entry into the Sky Team. The carrier’s bid is
sponsored by established Sky Team partner CSA, and the
two carriers also expanded their co-operation. Malev’s
membership will be as ‘associate member’, a formula for
incorporating regional partners of full members.
Malev also entered into code-share agreements with SN
Brussels Airlines and TAP Portugal in 2004, and with
Hainan Airlines of China which will operate the codeshare flights between Budapest to Beijing.
In the network, the company added several new
destinations, with emphasis on its market expansion into
Eastern Europe. Services were introduced to the
Moldavian capital Chisinau, Bulgaria’s Black Sea resort
Varna, Croatian Adriatic Sea resort town of Dubrovnik,
Montenegrin capital Podgorica and to Ljubljana in
Slovenia. Other introductions included services to Lyon
(France) and London Stansted.
At the beginning of 2005 László Sándor resigned as
th
Chairman & CEO of Malev. On the 11 of February Dr.
Janos Gönci and Peter Honig were appointed to succeed
him, as CEO and Chairman respectively.
Péter Hónig
Chairman
Dr. János Gönci
CEO
www.olympicairlines.com
Olympic Airlines
Athens International Airport
Bldg 97
5th km Spata-Loutsa Avenue
Spata 19019
Greece
67
35
22
10
within Greece
rest of Europe
beyond Europe
1799
Employees
43
4
3
14
2
3
7
6
4
Aircraft in Fleet
Airbus A340-300
Airbus A300-600
Boeing 737-400
Boeing 737-300
Boeing 737-200
ATR-72
ATR-42
deHavilland Dash-8
0
Aircraft on Order
Review of 2004
In December 2003, weeks before the start of the year
under review, Olympic Airways was restructured and
renamed Olympic Airlines, following a series of
unsuccessful attempts to restructure and privatise the
former airline.
The new company incorporates the total flight operation
activities of the former Olympic Airways Group (Olympic
Airways, Olympic Aviation and Macedonian Airlines) with
operations adjusted to the needs of the international
airline market and its competitors. It operates under the
same two-letter airline designator code as its
predecessor: OA.
st
Owned by…
100%
State ownership
Owner of…
Major partnerships
Code-share agreements incl. with Air Malta,
AeroSvit Airlines, Air Malta, CSA, Cyprus
Airways, Egyptair, Gulf Air, Hellas Jet,
Kuwait Airways, TAP Portugal.
Financial Results*
€mill
Turnover
Net profit/loss
2004
599.8
(103.4)
(103.4)
In its first year of operation following the restructuring the
airline successfully dealt with a number of challenges,
such as initial labour unrest and the Athens 2004 Olympic
Games sponsorship. It currently provides services to 67
domestic and international destinations and, in 2004,
carried 5.8 million passengers.
The latest restructuring aimed at enhancing the appeal of
the airline for investors, and in December 2004, the Greek
government officially launched its latest attempt to
privatise Olympic Airlines. At time of writing the result was
not yet known.
2003
64.0
(3.1)
(23.1)
* 2003 data concern the Balance Sheet of the new
company Olympic Airlines S.A. which derived from the
consolidation of the air transport sectors of Olympic
Airways S.A., Olympic Aviation S.A. and Macedonian
Airlines S.A. of the Olympic Airways Group of Companies.
th
This consolidation took place on 11 December 2003 and
th
st
thus data refers to the period from 11 – 31 December
2003. 2004 data are estimated based on the company’s
2004 Budget.
Petros Papageorgiou
Chairman
Leonard Odysseas Vlamis
CEO
SAS Scandinavian Airlines
Frösundaviks Allé 1
19587 Stockholm
Sweden
81
34
37
10
within Scandinavia
rest of Europe
beyond Europe
13528
Employees (Year average for
Review of 2004
www.scandinavian.net
Scandinavian Airlines + Spanair, Wideroe
and Blue1, where Scandinavian Airlines
account for +/- 9254)
197
7
4
8
17
15
30
14
4
8
15
31
12
24
8
Aircraft in Fleet
Airbus A340-300
Airbus A330-300
Airbus A321-200
Boeing 737-800
Boeing 737-700
Boeing 737-600
Boeing 737-500
Boeing 737-400
MD90-30
MD87
MD82
MD81
deHavilland Q400
Fokker 50
6
4
2
Aircraft on Order
Airbus A321-200
Boeing 737-800
During the year the SAS Group's airlines, including AEA
member Scandinavian Airlines, dealt with four crucial
challenges: getting the fall in the yield under control, while
tackling the overcapacity in the market, compensating for
the impact of record-high jet fuel prices and implementing
Turnaround 2005, a number of structural measures to
reduce the costs.
Due to the aforementioned challenges, earnings for 2004
were unsatisfactory although progress was noted
throughout the Group.
The SAS Group, consisting of Scandinavian Airlines
Businesses and the subsidiary and affiliated airlines,
carried more than 32 million passengers in 2004, of which
Scandinavian Airlines Businesses accounted for 24
million, including a new record for longhaul passengers
transported, totalling 1.5 million for the year.
st
on destinations and fleet.
All data here and in the statistical section of this Yearbook refers to
Scandinavian Airlines unless indicated otherwise. Scandinavian Airlines
(also Scandinavian Airlines Businesses) includes Scandinavian Airlines
Denmark, Scandinavian Airlines Sverige, Scandinavian Airlines
International and SAS Braathens.
Owned by…
SAS AB, parent company of the SAS Group, is owned by:
21.4%
14.3%
14.3%
50%
Swedish State
Danish State
Norwegian State
Private interests
Owner of…
SAS AB, parent company of the SAS Group, is owner of:
100%
100%
100%
100%
100%
100%
95%
49%
47.2%
37.5%
25%
20%
Scandinavian Airlines Denmark
SAS Braathens
Scandinavian Airlines Sverige
Scandinavian Airlines International
Blue1 (Finland)
Widerøe (Norway)
Spanair
Estonian Air
airBaltic (Latvia)
Air Greenland
Skyways (Sweden)
bmi
Major partnerships
Various agreements incl. with Air China.
SEK mill
Turnover
Net profit/loss
2004
58073
1694
(1945)
2003
57754
826
(1470)
Jørgen Lindegaard
President & CEO
SAS Group
SN Brussels Airlines
Delta Air Transport nv/sa trading as
The Corporate Village
Da Vinci laan 9
1930 Zaventem
Belgium
56
1
42
13
within Belgium
rest of Europe
beyond Europe
2152
Employees
38
3
3
12
14
6
Aircraft in Fleet
Airbus A330
Airbus A319
Avro RJ100
Avro RJ85
BAe 146
0
Aircraft on Order
Review of 2004
In 2004 a binding agreement, placing SN Brussels Airlines
and Virgin Express under the common ownership of SN
Airholding, was pronounced. Under the agreement Virgin
Express Holding transferred all its shares to SN
Airholding, in which it subsequently took a 29.9% stake.
By December all the necessary regulatory authorities had
given their approval, which will now permit the two
companies to move under common ownership. SN
Airholding aims to cover all customer segments with two
clearly separated products and brands.
www.flysn.com
st
Owned by…
92%
SN Air Holding
8%
SIC
In 2004 SN Brussels Airlines developed charter activities
during the weekends and the holiday periods. Using spare
capacity the company, which had previously offered only
ad-hoc charters, teamed up with several tour operators in
Belgium, France, Switzerland and the UK, operating from
multiple points across Europe.
Owner of…
Major partnerships
Malta, Alitalia, American Airlines, British
Airways, Bulgaria Air, Croatia Airlines, CSA,
Cyprus Airways, Finnair, Iberia, Lithuanian
Airlines, LOT, Malev, Malmö Aviation,
Portugalia, Pulkovo Airlines, Royal Air Maroc,
Sun-Air, SWISS, TAP Portugal, TAROM and
Ukraine International Airlines.
Financial Results
€mill
Turnover
Net profit/loss
In October the activities of Birdy Airlines, which operated
African services on behalf of SN, were integrated into the
company. Birdy’s staff was transferred and the three
Airbus A330-300 are now part of the SN Brussels Airlines
fleet.
2004
610.0
10.1
1.0
2003
534.3
(17.6)
0.6
SN Brussels Airlines and American Airlines were given full
anti-trust immunity by the US Department of Transport,
opening the way for more extensive commercial cooperation between the two carriers, beyond the codeshare operations already in place.
In 2004 SN Brussels Airlines continued to build its
portfolio of code-share partners. New agreements were
signed with American Airlines to New York, with Malev to
Budapest, Russian carrier Pulkovo Airlines to St
Petersburg, Malmö Aviation on services to Stockholm and
Gothenburg in Sweden, with Bulgaria Air to Sofia, Sun-Air
to Billund, Royal Air Maroc to Casablanca, Air Malta to
Malta and with Romanian airline TAROM to Bucharest.
Rob Kuijpers
Executive Chairman
Peter Davies
CEO
Spanair
Edificio Spanair
Apdo Correos 50086
07611 Palma de Mallorca
Spain
23
17
5
1
within Spain
rest of Europe
beyond Europe
2950
Employees
53
5
14
4
20
10
Aircraft in Fleet
Airbus A321
Airbus A320
Boeing 717
MD83
MD82
3
3
Aircraft on Order
Airbus A320
Review of 2004
www.spanair.com
st
Owned by…
94.9%
SAS Group
5.1%
Teinver
Owner of…
Major partnerships
Various agreements incl. with Aerolineas
Argentinas, Air Canada, Air New Zealand,
ANA, Asiana Airlines, Austrian, bmi, LOT,
Lufthansa, SAS, Singapore Airlines, TAP
Portugal, Thai Airways, United Airlines, US
Airways and Varig.
Financial Results
€mill
Turnover
Net profit/loss
2004
874.4
137.7
(4.5)
2003
836.0
121.5
(4.9)
In 2004 Spanair continued on an ambitious plan of
expansion, focusing on services operated from Madrid
and Barcelona on domestic and European routes, with
numerous additions to the network throughout the year
and particular emphasis on flights to the Canary Islands
introduced in the Winter timetable: Alicante-Gran Canaria,
Vigo-Tenerife, Bilbao-Gran Canaria, Santiago de
Compostela-Gran Canaria, Sevilla-Tenerife and BilbaoLanzarote. In addition new scheduled services were
added from Seville to Barcelona in February, Oslo-Madrid
in April and Dublin was introduced as a new destination
operating from Malaga, Alicante and Madrid during the
Summer timetable.
Perhaps one of the most important strategic decisions
taken within the company in April last year was the
introduction of a new business model on its national
scheduled flights, incorporating passengers that
previously travelled in Tourist Class with flexible fares to
its Business Avant Class. Moreover the company
extended its already renowned punctuality guarantee
commitment to all national scheduled flights until July
2004 which has since been extended further until June
th
30 2005.
The course of fast expansion has led to the decision to
increase the incidence of aircraft lease and wet lease
(aircraft & crew) from Scandinavian carrier SAS, 95%
owner of Spanair, to meet capacity requirements.
In November 2004 Spanair announced it would appeal
against the decision by the Spanish airport authority
AENA to allocate members of the Oneworld alliance,
including rival Spanish airline Iberia, almost exclusively to
the new terminal 4 at Madrid’s Barajas airport when it
comes into use in 2005. Spanair and other Star alliance
partners would have to use the older terminal 1.
Gonzalo Pascual Arias
Executive President &
Enrique Meliá
CEO
www.swiss.com
Swiss International Air Lines Ltd
4002 Basel
Switzerland
64
3
38
23
within Switzerland
rest of Europe
beyond Europe
7269
Employees
Review of 2004
82
77
9
9
4
11
7
15
4
11
7
3
3
2
2
Aircraft in Fleet
of which SWISS
Airbus A340
Airbus A330
Airbus A321
Airbus A320
Airbus A319
Avro RJ100
Avro RJ85
Embraer RJ-145
Saab 2000
of which Swiss Sun
Airbus A320
of which ECA
Saab 2000
In early 2004 Christoph Franz was appointed President &
st
CEO of SWISS, effective 1 July, following the departure
of André Dosé.
30
15
15
Aircraft on Order
Embraer RJ-195
Embraer RJ-170
Early in 2005 SWISS announced it will be discontinuing its
French-based Crossair Europe (ECA) subsidiary as part
of on-going restructuring plans. In addition the company
will be reducing its own operations from Basle and
Geneva to focus on its Zurich hub, whilst maintaining the
existing network offer through a series of commercial
agreements with partner airlines. Measures already taken
in 2004 included a consolidation of the route network and
reductions in staff and fleet numbers.
st
Owned by…
61.3%
Institutional Investors
20.3%
Swiss Confederation
12.2%
Cantons & Communities
4.1%
Private individuals
2.1%
Unregistered shares
Owner of…
100%
Europe Continental Airways
(ECA) ‘Crossair Europe’
Major partnerships
Alps, British Airways, Cirrus Airlines,
Crossair Europe, CSA, Denim Airways, El Al,
Japan Airlines, Macedonian Airlines,
Malaysia Airlines, Oman Air, SN Brussels
Airlines, Sri Lankan, Styrian Spirit, Thai
Airways International, Ukraine International.
Financial Results
CHF mill
Turnover
Net profit/loss
2004
3634
(115)
(129)
In 2004 SWISS and British Airways adjusted their cooperation agreement to cover code-share on flights
between Switzerland and Great Britain introduced over
the course of the year. The company also dropped its
Zurich-Lugano service, in favour of a partnership with
Cirrus Airlines, which has the Dash-8 aircraft required to
meet new approach specifications. On the Zurich-Newark
route, a Boeing Business Jet service was introduced
effective January 2005, which is operated for SWISS by
Privatair under a commercial agreement. Code-share
operations were also introduced on the flights of the
Austrian carrier Styrian Spirit to Salzburg and Krakow,
Denim Air to Florence and Venice, Maersk Air to
Copenhagen, Malev to Budapest and Libyan Arab to
Benghazi and Tripoli.
The network covered 38 destinations in Europe, with 38
operated non-stop from Zurich, 13 from Basel and 8 from
Geneva. Among the 2004 introductions were ZurichAlicante and Basel-London City.
In the fleet, SWISS retired the last of its MD-11s. The
company now operates an all-Airbus longhaul fleet,
consisting of nine Airbus A330s and nine A340s.
2003
4109
(732)
(705)
Pieter Bouw
Christoph Franz
President & CEO
TAP Portugal
Apartado 50194
1704-801 Lisbon
Portugal
42
8
19
15
within Portugal
rest of Europe
beyond Europe
5750
Employees
40
4
3
11
16
6
Aircraft in Fleet
Airbus A340-300
Airbus A321-200
Airbus A320-200
Airbus A319-100
Airbus A310-300
Review of 2004
TAP Portugal was appointed a new Chairman in 2004.
Manuel Pinto Barbosa succeeded Antonio Cardoso e
Cunha.
Aircraft on Order
st
www.tap.pt
Owned by…
100%
State ownership
Owner of…
40%
Air Sao Tome e Principe
15%
Air Macau (indirect participation
through a 20% stake held by
SEAP holding company, in which
TAP holds 75%).
Major partnerships
Various agreements incl. with bmi, Finnair,
LAM (Mozambique), LOT, Lufthansa, Malev,
Olympic Airlines, PGA Portugalia Airlines,
SATA (Air Azores), SN Brussels Airlines,
TACV-Transportes Aereos de Cabo Verde,
Ukraine International, Varig.
In June the Star Alliance accepted TAP Portugal’s
membership application, with the integration process due
to be fully concluded during Spring 2005. Star Alliance,
which counts amongst its members United Airlines,
Lufthansa and ANA, accepted five new members in 2004.
In July TAP Portugal entered code-share agreements with
alliance partners LOT and Brazil’s Varig.
In November TAP Portugal established a new charter
airline, known as White. White will be a 75%-owned
subsidiary of the company, with the remaining 25% held
by a Portuguese tourist group Abreu. The creation of
‘White’ follows the re-branding of the former Yes Charter
Airlines, which principally operated services between
Portugal, the Canary Islands, Cuba and the Dominican
Republic.
In the fleet, TAP Portugal introduced regular flights to new
European destinations - Budapest, Prague, Oslo and
Venice - as well as to Natal, in the Brazilian Northeast.
Financial Results
€mill
Turnover
Net profit/loss
2004
1409
12.8
8.7
2003
1144
22
19
In 2005 TAP Portugal launched a new corporate identity.
Manuel Pinto Barbosa
Chairman
Fernando Pinto
CEO
TAROM – Romanian Air Transport
Ploiesti Road 16.5 Km
Otopeni International Airport
Bucharest
Romania
33
12
17
4
within Romania
rest of Europe
beyond Europe
2323
Employees
16
4
5
7
Aircraft in Fleet
Boeing 737-700
Boeing 737-300
ATR 42-500
4
4
Aircraft on Order
Airbus A318-100
Review of 2004
th
In September 2004 TAROM celebrated its 50
anniversary. The past years saw important restructuring
efforts with a network review, improved aircraft utilisation
and internal measures . The company expects this to
reflect well on the financial performance of 2004,
anticipated to reach break-even.
st
www.tarom.ro
Owned by…
5.42%
Romanian Air Traffic Services
1.43%
Muntenia (private financial
investment fund)
0.52%
Romanian Civil Aviation Authority
Owner of…
Major partnerships
Aeroflot, Air France, Air Moldova, Alitalia,
Austrian, Cimber Air, CSA, Iberia, LOT,
Malev, SN Brussels Airlines and Syrian Arab
Airlines.
Financial Results
US$ mill
Turnover
Net profit/loss
2004
2003
226.5
(5)
(12.6)
In 2004 TAROM entered a new code-share agreement
with SN Brussels Airlines from December, whereby the
latter will place its code on TAROM operated flights
to/from Bucharest. Following the discontinuation of
longhaul services in 2003, TAROM embarked on an
agreement with Austrian for code-share on Austrianoperated flights Vienna-New York JFK and ViennaWashington Dulles flights effective from the Winter
timetable.
New TAROM destinations in 2004 included Sibiu and
Arad, both domestic points in Romania. The company is
predominantly expanding on existing European routes
with the objective of achieving a frequency of 3 flights per
week on all main European destinations within the next
few years.
In the fleet, TAROM placed an order for four new 100seater Airbus A318 for use on medium haul routes. The
first two aircraft are for delivery in 2006 with the remaining
two scheduled for 2007. The two Airbus A310s in the fleet
were put up for sale at the end of 2003, when the last
longhaul flight in the company’s network was ceased.
Currently the carrier’s fleet is composed of Boeing 737s, 700 and -300 and ATR 42-500s.
In January 2005 TAROM President & CEO Rodica
Odobescu stepped down. Mr. Cristian Becerescu has
been appointed interim manager of the company.
Cristian Becerescu
Acting President & CEO
www.turkishairlines.com
Türk Hava Yollari A.O.
Genel Müdürlük Binasi
Atatürk Havalimani
34830 Yesilköy
Istanbul
Turkey
102
27
46
29
within Turkey
rest of Europe
beyond Europe
10956
Employees
73
7
2
9
5
26
17
6
1
Aircraft in Fleet
Airbus A340-300
Airbus A321-100
Airbus A320-200
Airbus A310-300
Boeing 737-800
Boeing 737-400
Avro RJ-100
Airbus A310-300F
51
5
12
19
15
Aircraft on Order
Airbus A330-200
Airbus A321-200
Airbus A320-200
Boeing 737-800
Review of 2004
In 2004 the Turkish government offered a share sale in
the national carrier through a public offering. Previously
THY was 98.2% state-owned, with 1.8% of shares traded.
An IPO was carried out in the 1990s whilst a further
attempt to privatise in 2001 was stalled. Initially putting up
20% for sale in November, the option to extend this to
23% was quickly taken up, as the offer was
oversubscribed. The sale of further shares is planned for
2005 and 2006.
st
Owned by…
75.17% State-owned Privatisation
Administration
24.83% Private shareholders
Owner of…
50%
SunExpress
Major partnerships
Canada, Air India, American Airlines, Asiana
Airlines, Croatia Airlines, CSA, Iran Air, JAL,
LOT and SunExpress.
Financial Results
TRL tn
Turnover
Net profit/loss
2004
2793
143
75
In 2004 the company set the stage for the largest fleet
expansion in the carrier’s history. A purchase agreement
was signed for 36 single-aisle and wide-body aircraft from
Airbus, consisting of 19 Airbus A320s, 12 Airbus A321s
and 5 Airbus A330-200s. A further order was placed for
15 Boeing 737-800s. The fleet, being a mixture of Airbus,
Boeing and Avro, will be augmented by the 51 new
aircraft on order, with delivery starting in 2005 and
expected to be finalised by 2008.
2003
2846
370
244
Candan Karlitekin
Temel Kotil
General Manager
www.virgin-atlantic.com
Virgin Atlantic Airways
The Office
Manor Royal
Crawley, West Sussex
RH10 9NU
Great Britain
25
3
0
22
rest of Europe
beyond Europe
6912
Employees (2003)
29
7
9
13
Aircraft in Fleet
Airbus A340-600
Airbus A340-300
Boeing 747-400
24
6
18
Aircraft on Order
Airbus A380-800
Airbus A340-600
st
st
on destinations and fleet; at 31 December
2003 for employees.
Owned by…
49%
Singapore Airlines
Owner of…
49%
Virgin Nigeria Airways
Major partnerships
Various agreements incl. with America West
Airlines, bmi, Continental Airlines, Malaysian
Airline System, Singapore Airlines and South
African Airways.
1
£ mill 2004/05 2003/04
Turnover
1272
Net profit/loss*
20.9
* pre-tax
1
Change of FY: 10 months to Feb. 2004
Review of 2004
In March Virgin Atlantic unveiled its future development
plan, which includes a period of sustained growth; the
launch of new routes, including Australia, Cuba and the
Bahamas; increased frequencies to the US, the
Caribbean area and Asia; fleet expansion and the
recruitment of 1400 additional staff.
In December 2004 Virgin Atlantic Airways launched its
first scheduled service between Hong Kong and Sydney,
Australia. The daily flight, operated with an Airbus A340600, was made possible following the liberalisation of the
air service agreements between Hong Kong and the
United Kingdom in 2003.
In September the Nigerian Government and Virgin Atlantic
Airways announced the launch of a new airline, Virgin
Nigeria. Virgin Nigeria will initially benefit from expertise
and services from Virgin Atlantic, which will also hold a
minority shareholding of 49%, the remainder being held
by Nigerian institutional investors. The new airline should
start operations in 2005.
In 2004 Virgin Atlantic announced code-share agreements
with America West Airlines, for onward connection within
the US; with South African Airways to benefit from the
carriers pan-African network out of Johannesburg; and an
expanded code-share agreement with shareholder
Singapore Airlines.
In the fleet, Virgin Atlantic placed an order for a further
thirteen Airbus A340-600s, now totalling 18, with options
for a further thirteen. Delivery is scheduled between 2005
and 2008. The six A380-800 on order will be integrated
into the fleet between 2008 and 2010.
Sir Richard Branson
Chairman
Steve Ridgway
CEO
Key Statistics - AEA Total
TRAFFIC BY ROUTE AREA
2004
1
2
1+2
3
4
5
Domestic
Geographical
Europe
Total
Europe
Europe North Africa
Europe Middle East
North
Atlantic
%/pt
%/pt
%/pt
%/pt
%/pt
%/pt
Passengers (000)
97 942.1
-0.2
140 670.7
5.8
238 612.8
3.3
3 688.0
18.6
6 310.0
17.9
26 950.4
7.7
Passenger Kilometres (mill)
52 008.2
0.8
143 939.1
7.5
195 947.3
5.7
7 216.7
20.1
21 211.3
19.6
183 035.8
7.2
79 215.7
2.0
219 985.9
6.3
299 201.6
5.7
10 568.9
15.1
30 463.4
19.4
224 193.1
4.5
65.7
-0.8
65.4
0.7
65.5
0.3
68.3
2.9
69.6
0.1
81.6
2.0
Total Freight Tonnes Carried (000)
189.4
-4.4
572.1
5.9
761.5
3.2
56.2
7.2
213.8
6.9
1 420.9
6.7
Total Freight Tonne-Kilometres (mill)
151.4
-1.6
784.7
9.9
936.1
7.8
160.0
13.4
978.8
4.8
9 936.4
6.9
Share in Tot. Sched. AEA Traffic (%)
Seat Kilometres (mill)
Passenger Load Factor (%)
% Freight on Passenger Services
8.0
80.2
Total Revenue Tonne-Kilometres (mill)
5 016.6
Available Tonne-Kilometres (mill)
Overall Load Factor (%)
22.0
30.0
82.4
1.1
82.1
0.4
14 440.5
7.7
19 457.2
8 649.3
1.3
25 088.5
6.5
58.0
-0.6
57.6
0.6
3.2
99.7
28.0
81.7
69.0
5.7
849.3
19.8
3 018.9
14.4
27 680.5
33 737.8
5.1
1 306.2
13.9
4 708.6
12.8
38 830.3
4.2
57.7
0.3
65.0
3.2
64.1
0.9
71.3
1.8
Average Seats per Aircraft
129
119
121
159
195
276
Average Stage Distance (km)
477
897
735
1 687
2 734
6 339
6
7
8
South
Atlantic
Europe Sub Saharan
Africa
2004
Mid
Atlantic
%/pt
Passengers (000)
Passenger Kilometres (mill)
Share in Tot. Sched. AEA Traffic (%)
Seat Kilometres (mill)
Passenger Load Factor (%)
Total Freight Tonnes Carried (000)
Total Freight Tonne-Kilometres (mill)
% Freight on Passenger Services
%/pt
9
Europe Far East/
Australasia
%/pt
6.9
1-9
Total
Scheduled
%/pt
NonScheduled
%/pt
%/pt
5 925.0
2.6
3 745.4
15.2
7 131.7
4.9
14 399.9
19.4
307 012.9
4.9
9 458.8
2.7
45 495.2
3.4
32 582.9
17.0
47 523.1
5.5
120 393.1
18.9
653 643.2
9.2
21 467.6
9.0
56 873.9
2.6
39 339.0
15.7
60 916.7
0.7
154 574.0
17.2
876 481.9
7.4
27 072.1
10.7
80.0
0.6
82.8
0.9
78.0
3.6
77.9
1.1
74.6
1.2
79.3
-1.2
165.9
9.2
239.7
19.5
422.2
11.3
1 855.8
12.0
5 136.7
9.0
52.4
25.2
1 416.1
10.7
2 205.1
19.7
3 077.4
12.9
16 263.4
12.2
34 974.1
10.7
353.4
30.1
7.0
5.0
82.8
7.3
54.2
18.4
55.6
100.0
35.8
52.9
3.8
Total Revenue Tonne-Kilometres (mill)
5 713.0
4.7
5 303.7
18.7
7 573.6
7.8
27 920.6
14.8
97 539.3
9.7
2 346.8
11.7
Available Tonne-Kilometres (mill)
8 335.3
3.3
7 113.2
15.1
10 827.8
4.6
38 040.0
14.4
142 930.9
7.8
3 382.7
12.9
68.5
0.9
74.6
2.3
69.9
2.1
73.4
0.2
68.2
1.1
69.4
-0.8
Overall Load Factor (%)
Average Seats per Aircraft
Average Stage Distance (km)
325
274
278
293
192
175
6 515
6 601
5 197
6 644
1 272
1 888
For more detailed statistics, download the AEA S.T.A.R. 2005 from www.aea.be
Key Statistics - by Carrier
TOTAL SCHEDULED - Passenger & All-Cargo Services
2004
Revenue
Passenger
Kilometres
Passengers
Available
Seat
Kilometres
Freight
Tonne
Kilometres
Freight
Tonnes
Carried
Load
Factor
(000)
%
(mill)
%
(mill)
%
(%)
pt
(000)
%
765.0
0.9
711.0
1.5
1 288.5
2.2
55.2
-0.4
3.5
-8.6
45 368.9
4.3
107 313.5
8.3
141 558.1
7.5
75.8
0.6
735.9
11.6
1 365.2
4.3
2 552.2
17.4
3 201.5
-0.8
79.7
12.3
8.2
-6.6
21 988.4
-1.2
34 366.3
10.0
48 181.3
10.6
71.3
-0.4
203.6
1.2
1 392.7
Austrian
7 619.1
10.5
17 519.7
20.5
24 279.2
19.1
72.2
0.9
85.3
16.7
bmi
6 892.5
9.1
5 379.2
24.1
8 012.8
20.5
67.1
1.9
20.6
35 462.5
1.9
106 500.7
6.0
143 407.0
4.0
74.3
1.4
-
-
-
-
-
-
-
Croatia Airlines
1 347.9
5.3
940.5
8.1
1 532.1
4.9
CSA
3 994.8
19.4
5 703.5
19.2
8 148.5
Cyprus Airways
1 702.3
0.5
3 421.3
2.1
Finnair
6 028.1
8.5
10 476.1
25 802.7
4.6
Icelandair
1 360.7
Jat Airways
Available
Tonne
Kilometres
Overall
Load
Factor
%
(mill)
%
(mill)
%
(%)
pt
3.2 -10.2
67.2
0.9
136.8
1.8
49.1
-0.4
10.5
15 224.2
8.9
21 416.6
8.8
71.1
0.1
12.2 -11.9
218.3
3.6
355.4
-0.5
61.4
2.4
2.8
4 842.4
7.6
6 891.2
7.9
70.3
-0.2
511.4
18.7
2 374.2
19.9
3 364.5
19.5
70.6
0.2
13.6
76.5
37.3
519.9
24.5
950.6
21.8
54.7
1.2
710.3
13.6
4 778.4
13.9
14 441.1
8.8
22 316.5
5.3
64.7
2.1
-
619.1
19.0
4 849.3
14.7
4 849.3
14.7
6 668.0
12.1
72.7
1.7
61.4
1.8
3.7
-5.1
2.4
-7.8
87.5
7.4
167.8
4.6
52.2
1.4
23.0
70.0
-2.3
19.4
8.6
40.6
11.9
558.5
18.5
907.1
23.3
61.6
-2.5
4 765.1
0.6
71.8
1.0
18.8
9.8
47.5
10.4
358.8
3.0
580.1
1.9
61.8
0.7
21.2
15 804.2
14.6
66.3
3.6
64.0
19.2
324.7
27.1
1 276.8
22.1
2 437.3
17.6
52.4
2.0
45 765.5
9.1
60 843.5
8.8
75.2
0.2
198.6
9.8
964.8
19.1
5 132.6
10.8
8 532.7
9.4
60.2
0.8
20.0
3 702.2
23.4
4 890.2
12.8
75.7
6.5
30.3 -68.3
392.2
-0.8
583.0
-4.7
67.3
2.7
1 076.8
6.5
1 095.2
5.2
2 010.9
13.5
54.5
-4.3
4.3
21.8
5.9
33.0
105.2
6.7
225.9
10.2
46.6
-1.5
KLM
20 386.2
8.9
63 113.3
11.6
77 059.6
6.4
81.9
3.8
564.7
8.1
4 733.2
15.9
11 030.6
10.8
13 793.9
9.1
80.0
1.2
LOT
3 493.1
7.4
5 860.7
7.9
7 934.3
4.5
73.9
2.3
17.1
-3.7
77.1
9.5
654.3
7.7
1 041.6
3.9
62.8
2.2
48 255.4
8.5
109 470.9
13.3
139 695.7
12.5
78.4
0.6
1 144.7
12.1
8 039.6
10.7
19 288.6
12.1
26 342.8
11.3
73.2
0.5
Luxair
855.8
4.4
572.6
4.4
1 074.2
-0.4
53.3
2.5
0.3
16.7
0.3
29.1
51.9
4.4
101.7
-1.0
51.0
2.6
Malev
2 546.2
12.6
3 509.7
5.8
5 431.2
12.8
64.6
-4.3
8.5 -13.7
23.4 -17.5
343.4
18.2
725.8
4.8
47.3
5.4
Meridiana
3 597.1
-4.7
2 436.2
-4.9
3 937.7
3.4
61.9
-5.4
0.5 -70.1
0.3 -70.8
219.6
-5.2
456.5
8.1
48.1
-6.8
Olympic Airlines
5 794.4
8.5
6 788.4
6.4
10 504.1
2.7
64.6
2.3
25.3 -15.6
20 378.6
-0.4
24 050.2
4.5
35 087.4
5.3
68.5
-0.5
120.7
3 192.7
9.9
4 556.0
15.1
7 448.7
8.1
61.2
3.7
Spanair
5 644.4
6.7
5 107.4
12.2
8 463.2
13.0
60.3
-0.4
SWISS
9 279.1 -13.8
20 598.8 -14.9
27 493.4 -17.9
74.9
2.6
TAP Portugal
6 048.2
10.6
13 198.0
18 747.9
11.4
70.4
1.2
53.3
7.8
TAROM
1 061.7
8.9
2 089.1 -13.1
63.6
-0.7
3.1
0.0
11 376.6
15.5
17 382.4
15.5
24 713.4
9.1
70.3
3.9
129.6
10.1
393.7
6.7
2 191.8
4 328.6
12.4
30 222.7
12.2
38 879.2
9.2
77.7
2.1
146.6
5.9
1 078.8
5.9
3 919.8
307 012.9
4.9
653 643.2
9.2
876 481.9
7.4
74.6
1.2
5 136.7
9.0
34 974.1
10.7
97 539.3
Adria Airways
(mill)
Revenue
Tonne
Kilometres
Aer Lingus
Air France
Air Malta
Alitalia
British Airways
Cargolux
Iberia
Lufthansa
SAS
Turkish Airlines
Virgin Atlantic
AEA
13.3
1 328.9 -14.1
10.4 -71.2
5 384.9
52.8
-9.4
695.5
4.9
1 368.6
1.6
50.8
1.6
-4.9
725.6
0.3
3 170.9
4.3
4 690.2
3.4
67.6
0.5
16.1
-6.2
91.5
-6.5
505.7
10.7
870.5
7.3
58.1
1.8
10.1
24.2
13.6
27.8
473.2
12.6
826.8
10.9
57.2
0.9
2 985.9 -12.4
4 773.3 -17.7
62.6
3.8
1 434.7
13.1
2 482.8
12.5
57.8
0.3
125.1 -14.8
363.1
-7.7
34.5
-2.9
13.5
3 321.7
8.7
66.0
2.8
10.4
6 238.0
9.5
62.8
0.5
9.7 142 930.9
7.8
68.2
1.1
190.6 -15.3
1 089.9 -12.7
224.7
10.4
4.9 -28.2
For more detailed statistics, download the AEA S.T.A.R. 2005 from www.aea.be
Glossary
AAPA. Association of Asia Pacific Airlines, with headquarters in Kuala Lumpur.
Air Freedom Rights. The liberalisation
of European air transport, started in
1988 and completed in 1997 with the
so-called ‘Third Package’ of measures
included rights of market access, which
are defined as follows. First freedom:
to overfly one country en-route to another; Second freedom: to make a
technical stop in another country; Third
freedom: to carry passengers from the
home country to another country;
Fourth freedom: to carry passengers to
the home country from another country;
Fifth freedom: to carry passengers
between two countries by an airline of a
third on a route with origin/destination in
its home country; Sixth freedom: to
carry passengers between two countries by an airline of a third on two
routes connecting in its home country;
Seventh freedom: to carry passengers
between two countries by an airline of a
third on a route outside its home country; Eighth freedom or cabotage: to
carry passengers within a country by an
airline of another country on a route
with origin/destination in its home country; Ninth freedom or Stand-Alone cabotage: to carry passengers within a
country by an airline of another country;
True domestic: to carry passengers by
an airline in its home country.
(AEA). A non-profit association for the
European airline industry with following
members: Adria Airways (JP), Aer Lingus (EI), Air France (AF), Air Malta
(KM), Alitalia (AZ), Austrian (OS), bmi
(BD), British Airways (BA), Cargolux
Airlines International (CV), Croatia Airlines (OU), CSA Czech Airlines (OK),
Cyprus Airways (CY), Finnair (AY),
Iberia (IB), Icelandair (FI), JAT Airways
(JU), KLM (KL), LOT Polish Airlines
(LO), Lufthansa (LH), Luxair (LG), Malev Hungarian Airlines (MA), Olympic
Airlines (OA), SAS (SK), SN Brussles
Airlines (SN), Spanair (JK), SWISS
(LX), TAP Portugal (TP), TAROM (RO),
Turkish Airlines (TK), Virgin Atlantic
Airways (VS).
multiplied by the number of kilometres
which those seats are flown.
Available Tonne-Kilometres (ATK).
The total number of metric tonnes
available for the transportation of passengers, freight and mail multiplied by
the number of kilometres which this
capacity is flown.
Breakeven Load Factor (%). The load
factor at which operating revenues will
cover operating costs. Unit cost divided
by yield.
CAA.Civil Aviation Authority.
CFMU. Central Flow Management Unit,
of Eurocontrol.
CODA. Central Office for Delay Analysis.
Code-sharing. A marketing practice by
which several airlines put their twoletter code on one flight.
Computer Reservation System
(CRS). A system for reserving seats on
commercial flights electronically by a
travel agent.
DGCA. Directorate General of Civil
Aviation.
Distances. Airport-to-Airport great
circle distances are used.
IACA. International Air Carrier Association: worldwide membership of leisure
(non-scheduled) air carriers.
ECAC. European Civil Aviation Conference, with headquarters in Paris.
IATA. International Air Transport Association, with headquarters in Geneva
and Montreal.
ECOFIN. Directorate General for Economic and Financial Affairs of the European Union.
ICAO. International Civil Aviation Organisation, with headquarters in Montreal, Canada.
EU. European Union. The following
countries joined, in 1958 Belgium,
France, Germany (west), Italy, Luxembourg, Netherlands; in 1973 Denmark,
Ireland, United Kingdom; in 1981
Greece; in 1986 Portugal, Spain; in
1995 Austria, Finland and Sweden and
in 2004 Cyprus, the Czech Republic,
Estonia, Hungary, Latvia, Lithuania,
Malta, Poland, the Slovak Republic and
Slovenia. Membership of Bulgaria and
Romania is expected in 2007.
OAG. Official Airline Guide, includes
scheduled timetables for most airlines.
ATC. Air Traffic Control.
Available Seat-Kilometres (ASK). The
total number of seats available for the
transportation of revenue passengers
Geographical Regions. For reporting
related to the air transport operations of
member airlines the following regions
are identified: 1) Domestic: within a
country which is the main place of business of the reporting carrier. In the case
of SAS, which covers three countries,
domestic refers to services within each
of the three countries, but not services
between those countries; 2) Geographical Europe: cross-border services
within the geographic area Europe,
including Russia up to 55°E; 3) Middle
East: to/from the Middle East; 4) North
Africa: services to/from Algeria, Egypt,
Libya, Morocco, Sudan and Tunisia; 5)
Sub-Saharan Africa: services to/from
African countries not included in North
Africa; 6) North Atlantic: services
to/from USA and Canada; 7) Mid Atlantic, services to/from Central America; 8)
South Atlantic: services to/from South
America.; 9) Far East/Australasia: services to/from points East of the Middle
East. All of the above relate to scheduled services only. Aggregate nonscheduled or charter services are reported separately. Calculated regions
include: a) Europe Total: 1+2; b) International Short/Medium Haul: 2+3+4; c)
Total Longhaul: 5 to 9; d) Total International: 2-9; e) Total Scheduled: 1-9.
Eurocontrol. European Organisation
for the Safety of Air Navigation.
OECD. Organisation for Economic CoOperation & Development
Operating Ratio. The relationship between operating revenues and operating expenses. The latter may be inclusive or exclusive of net interest.
Overall Load Factor %. The percentage of total capacity available for passengers, freight and mail which is actually sold and utilised. Computed by
dividing total revenue tonne-kilometres
Glossary
actually flown by total available tonnekilometres.
Passenger Load Factor (PLF %). The
percentage of seating capacity which is
actually sold and utilised. Computed by
dividing revenue passenger-kilometres
flown by available seat-kilometres flown
on revenue passenger services.
Non-scheduled services. Are defined
as ‘Non-scheduled services’: charter
flights and special flights performed for
remuneration on an irregular basis,
including empty flights and blocked-off
charters, other than those reported
under scheduled services. Blocked-off
charters: when the whole capacity of an
aircraft is reserved for charter sale on
flights published as scheduled but carried out as charter flights on the same
or similar routing and timetable.
Revenue Freight. All freight counted
on a point-to-point basis (in metric tonnes) covered by air waybills for which
remuneration is received. Freight carried on trucking services is not included.
kilometres are computed by multiplying
metric tonnes of revenue traffic (passenger, freight and mail) by the kilometres which this traffic is flown. Passenger tonne-kilometres are calculated
using standard weights (including baggage) which may differ between airlines
and between domestic/short/long-haul.
Scheduled Services. Flights scheduled and performed for remuneration
according to a published timetable, or
so regular or frequent as to constitute a
recognisably systematic series, which
are open to direct booking by members
of the public. Extra flights occasioned
by overflow traffic from scheduled
flights and preparatory revenue flights
on planned air services are also considered to be scheduled services.
Unit Cost. The average operating cost
incurred per available tonne-kilometre.
Yield. The average amount of revenue
received per revenue tonne-kilometre.
Passenger yield: passenger revenue
per RPK.
Revenue Passengers Carried. A passenger for whose transportation an air
carrier receives commercial remuneration. This includes, for example, (i)
passengers travelling under publicly
available promotional offers (for example ‘ two-for-one’ ) or loyalty programmes (for example redemption of
frequent flyer points); (ii) passengers
travelling as compensation for denied
boarding; (iii) passengers travelling at
corporate discounts; (iv) passengers
travelling on preferential fares (government, seamen, military, youth, student
etc). Are excluded, for example, (i)
persons travelling free; (ii) persons
travelling at a fare or discount available
only to employees of air carriers or their
agents or only for travel on the business of the carriers; (iii) infants who do
not occupy a seat.
Revenue Passenger-Kilometres
(RPK). One fare-paying passenger
transported one kilometre. RPK’s are
computed by multiplying the number of
revenue passengers by the kilometres
they are flown.
Revenue Tonne-Kilometres (RTK).
One tonne of revenue traffic transported one kilometre. Revenue tonne-
Avenue Louise 350
1050 Brussels, Belgium
Tel. + 32 (0)2 639 89 89
Fax + 32 (0)2 639 89 99
[email protected]
www.aea.be

Yearbook 05

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