SkyEurope drops hubs in Budapest and Cracow

Aug 31, 2007, 10:44 GMT

Vienna - The Slovak discount airline SkyEurope announced Friday that it plans to drop two of its five hubs as a cost-cutting measure.

From late October onwards, the airports in Budapest and Cracow will stop serving as bases for the carrier and will only start from Bratislava, Vienna and Prague, SkyEurope said in its 3rd quarter report.

The carrier, which is listed on Vienna's stock exchange, also announced plans to reduce its European destinations, but intends to increase frequencies and offer more convenient departing times.

SkyEurope currently flies to 39 destinations in 19 countries.

The discount airline reported third-quarter losses of 5.24 million euros (7.18 million dollars), a reduction compared with 16.54 million euros net loss in the same period last year.

Losses for the first 9 months of the 2006/07 business year fell from 50.2 million euros to 37.6 million euros in the year-on-year comparison.

The company's debts however increased from 79.5 to 121.6 million euros.

SkyEurope remains heavily affected by high leasing costs for its 12 aircraft.

Operative earnings before interest, taxes, depreciation, amortization, share profits of associates and lease payments (EBITDAR) were 3.23 million euros, up from a negative EBITDAR of 7.09 million euros.

Earnings before interest and taxes improved (EBIT) from minus 14.5 million euros to minus 5.2 million euros in the third quarter, and from losses of 48.8 million euros to minus 35.2 million euros in the first nine months of the year.

Revenues increased by 26 per cent to 66.6 million euros.

SkyEurope said it expected to report a positive EBIT for the fourth quarter.