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airBaltic carries 2,757,404 passengers in 2009, acts as engine of growth for the Baltics

2010-01-07

Latvian airline airBaltic transported a total of 2,757,404passengers in 2009, some 6% more than during the same period in 2008. In a turbulent year for the aviation industry, airBaltic improved its service, operational and financial performance, acting as a driver of growth in the Baltic region. In 2009, airBaltic is the only profitable airline in Europe that is majority-owned by the state.

Bertolt Flick, President and CEO of airBaltic: “2009 was a challenging year for the aviation industry. IATA revised downwards its industry financial performance forecast several times to arrive at expected net losses of USD 11 billion in 2009, and USD 5.6 billion in 2010 making these the two worst years in the aviation history. Our industry has seen a number of high profile failures including Sterling in Denmark and flyLAL in Lithuania. For airBaltic, too, 2009 was a complicated year. In January 2009, SAS sold its shares in airBaltic, and this was considered by the Lithuanian business daily Verslo Zinios one of the TOP 50 events in the world. This required us to redesign the strategy direction and the business itself. Furthermore, in 2009 we virtually lost our home market customers as the GDP of Latvia collapsed more than 18%, and we were forced to considerably downsize our operations in Vilnius by closing most of the routes. At the same time, we have achieved a lot in 2009. airBaltic has successfully restructured its business to offer a transit product, and achieved over 30% passenger growth in its home base in Riga. This success has been recognized by industry and business experts, media and customers alike - airBaltic was awarded Airline of the Year 2009/2010 by European Regions Airline Association, Finland’s business magazine Kauppalehti titled airBaltic as “Nokia of the Baltic region”, arrival of airBaltic was voted Event of the Year by residents of Tartu. airBaltic has also considerably improved its service and punctuality. The reliability is epitomized by the deals with five governments in Europe who have selected airBaltic to provide air travel for their employees. The continued good performance in December suggests that our preliminary profit will be 14 million LVL. Due to the strong development of transfer traffic, it was possible to maintain the level of passenger revenue. The profit has been greatly enhanced by the sale of different services – hotels, insurances, car rentals etc. airBaltic is today the largest exporter of services in Latvia – the share of airBaltic of the exports in Latvia is larger than the share of Nokia in Finland’s exports.

In 2009, airBaltic also introduced compensation to passengers who lose their jobs, a widely appreciated move in the Baltics, Scandinavia and elsewhere.

We expect economic conditions in the Baltic markets to worsen in 2010 compared to 2009. GDP will continue to decline in 2010 and no recovery can be expected until summer 2011. We will see further collapse of local passenger traffic in the Baltics, as buying power of residents diminishes due to higher taxes, lower incomes and rising unemployment. airBaltic will therefore open at least 9 new routes to further strengthen our transit product. Our new routes will focus on niche markets in Scandinavia and the CIS where airBaltic faces a low level of competition. airBaltic will be the only serious airline in the Baltics in 2010. The new business lines of airBaltic – online travel agency airBalticTravel.com and customer loyalty programme BalticMiles – are expected to contribute considerably to 2010 result. In 2010 we will be closely looking at cost reductions by reviewing all areas of operations. In order to boost future development, a new airport terminal is required in Riga, and construction has to start as soon as possible, if Riga Airport is willing to accommodate any growth beyond 2011."

airBaltic carried overall 216,051 passengers in December 2009 (from Riga, Vilnius and Tallinn), representing 12% more than in the same month in 2008, when airBaltic transported 193,595passengers. In December of this year, the number of passengers at the base of airBaltic in Riga has increased by 25% compared to the same period last year.

In December, airBaltic operated 3,825 flights, or 3% fewer than the 3,937 flights of December 2008. Between January and the end of December, the airline operated 45,967 flights in all.

The airline’s load factor, which represents the number of passengers as a proportion of the number of available seats, increased to 66% points last month, or 9% points more than in December 2008. During the twelve months of 2009 airline’s passenger load factor was at a level of 68%, or 6% points more than during the same period in 2008.

The 15-minute flight punctuality indicator for airBaltic was at a level of 83.4% in December 2009. This means that more than 83 of every 100 airBaltic flights in December departed at the planned time or with a delay of no more than 15 minutes. The accumulated 15-minute punctuality indicator for 2009 was 91.3%

 

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