Austrian Airlines sees continued losses, but hope in Lufthansa deal

Aug 4, 2009, 11:44 GMT

Vienna - Continued pressures in the airline industry resulted in Austrian Airlines Group (AUA) recording a net loss of 166.6 million euros (239.6 million dollars) for the first half of 2009, the company reported Tuesday as it said a proposed buyout by Lufthansa AG should provide a boost.

'The crisis has relentlessly revealed our weaknesses,' said executive board members Peter Malanik and Andreas Bierwith. 'Of course we cannot be satisfied with the half-year results.'

Nevertheless, the company said cost-cutting efforts should achieve savings of 15 per cent for 2009 and that it has sufficient cash on hand to get through the end of the year. However, it provided no firm timelines for a return to profits.

The biggest boon though came from reports that Lufthansa will be able to purchase Austrian Airlines, perhaps before the end of the summer.

'We expect a significant impetus to growth by being able to access Lufthansa's international route and sales networks,' read the statement. 'We will be able to exploit considerable synergies in terms of costs.'

Under the deal, Austrian Airlines is expected to continue operations as a separate company.

The company posted revenues of 934.6 million euros for the first half of 2009, a 21.8 per cent drop from the first half of 2008.

On a quarterly basis, AUA recorded an 18.1-million-euro loss for operations in the second quarter of 2009, down from a gain of 22.7 million euros in the same quarter of 2008, when the airline benefited from traffic for the Euro 2008 European football championship.

AUA also reported a drop-off in the number of seats booked, on top of a reduction in flights flown as part of its cost savings measures.