1 adria airways slovene airline company 4th vienna economic forum tomaž Škofic depuity v.p. sales...
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Adria AirwaysAdria AirwaysSlovene Airline CompanySlovene Airline Company
4th Vienna Economic Forum 4th Vienna Economic Forum
Tomaž ŠkoficTomaž ŠkoficDepuity V.P. Sales & MarketingDepuity V.P. Sales & Marketing
Vienna, 6 November 2007Vienna, 6 November 2007
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1961 ● establishment of the charter airline Adria Aviopromet, operating DC- 1961 ● establishment of the charter airline Adria Aviopromet, operating DC- aircraft, end of the sixties purchase of DC-9 aircraft.aircraft, end of the sixties purchase of DC-9 aircraft.
1984 1984 Adria becomes a member of the IATA.Adria becomes a member of the IATA. StartsStarts developing scheduled developing scheduled services with: services with: DC-9, MD-80 and Dash 7 aircraft. Fleet: DC 9, MD 80, Dash 7 DC-9, MD-80 and Dash 7 aircraft. Fleet: DC 9, MD 80, Dash 7 aircraft. aircraft.
1989 ● Purchase of first Airbus A320 aircraft.1989 ● Purchase of first Airbus A320 aircraft.
1991 1991 ● On 25 June, the Republic of Slovenia declares independence, for ● On 25 June, the Republic of Slovenia declares independence, for political reasons Adria is grounded for three months.political reasons Adria is grounded for three months.
1992 ● End of January operations restarted in a significantly reduced 1992 ● End of January operations restarted in a significantly reduced market. The structure of operations is markedly changed, from primarily a market. The structure of operations is markedly changed, from primarily a charter airline to a mainly scheduled service carrier.charter airline to a mainly scheduled service carrier.
CompanyCompany history history
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1995 1995 ●● Start of cooperation with Lufthansa, inclusion in European integration Start of cooperation with Lufthansa, inclusion in European integration processes.processes.
1998 1998 ●● Purchase of three new CRPurchase of three new CRJJ 200 aircraft. 200 aircraft. 2000 2000 ●● Purchase of fourth CRJ 200.Purchase of fourth CRJ 200. 20012001 ● ● TThe first scheduled flight in the EU, from Vienna to Frankfurt.he first scheduled flight in the EU, from Vienna to Frankfurt. 2002 2002 ●● Adria selected as first European authorised Bombardier maintenance Adria selected as first European authorised Bombardier maintenance
centre for CRJ aircraft.centre for CRJ aircraft. 2004 2004 ●● Adria joins the global association of airlines, Star Alliance, as a regional Adria joins the global association of airlines, Star Alliance, as a regional
member.member. 2005 2005 ●● PPurchase of fifth new CRJ 200 aircrafturchase of fifth new CRJ 200 aircraft; opening of a new hangar.; opening of a new hangar. 2006 ● 2006 ● In November, Adria starts introducing e-ticketing.In November, Adria starts introducing e-ticketing. 2006 ● 2006 ● In December, Adria carries more than one million passengers for the In December, Adria carries more than one million passengers for the
first time in the independent Slovenia.first time in the independent Slovenia. 2007 ● 2007 ● Purchase of two new CRJ 900 aircrafts.Purchase of two new CRJ 900 aircrafts.
Company historyCompany history
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2005
Start Reorganisation FutureStart Reorganisation Futureof business operationof business operation
2006
20072008
Problems Solutions StabilizedProblems Solutions Stabilized operating,operating,further experience further experience based developmentbased development
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Difficult situation in 2005Difficult situation in 2005
Extensive loss in the amount of 9,6 mio EURExtensive loss in the amount of 9,6 mio EUR Inadequate fleet (Inadequate fleet (gap between the gap between the 48-48-seater and the seater and the 162-seater162-seater )) Global drop in ticket pricesGlobal drop in ticket prices Global increase in oil pricesGlobal increase in oil prices Lack of controling of financial riskLack of controling of financial risk Lack of planning and creating of reserves for aircraft investment Lack of planning and creating of reserves for aircraft investment
maintenencemaintenence High operating costs (airport handling, catering) High operating costs (airport handling, catering) High financial costs High financial costs Cash flow problemsCash flow problems
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Measures for the improvement of business operation Measures for the improvement of business operation
Measures for increasing the revenuesMeasures for increasing the revenues
Revenues from scheduled passenger servicesRevenues from scheduled passenger services
Stop further decreasing of the value of passenger coupon (sticter Stop further decreasing of the value of passenger coupon (sticter limitation of promotional fares, general fare increase, increase of tariff limitation of promotional fares, general fare increase, increase of tariff add-ons, RSFs and No-show control)add-ons, RSFs and No-show control)
Reorganization of revenue management processReorganization of revenue management process Insateing nInsateing neew routes w routes Adding new frequenciesAdding new frequencies
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Measures for increasing the revenuesMeasures for increasing the revenues
Revenues from charter servicesRevenues from charter services
Charter services remain complementary services to the scheduled Charter services remain complementary services to the scheduled services and are aimed at optimising returns and not primarily at services and are aimed at optimising returns and not primarily at increasing the volume.increasing the volume.
Revenues from maintaining aircraft for third partiesRevenues from maintaining aircraft for third parties
MMaintain the leading position in maintenance ofaintain the leading position in maintenance of CR CRJJ 100/200/700/900100/200/700/900 Expansion on the C-checks market for Airbus A-319/320/321 aircraftExpansion on the C-checks market for Airbus A-319/320/321 aircraft BBuilding of a new hangar.uilding of a new hangar.
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Measures for increasing the revenues Measures for increasing the revenues
Other operating revenuesOther operating revenues
More active and inovative approach to mMore active and inovative approach to marketingarketing of our own media of our own media (the In-flight magazine and aircraft interior(the In-flight magazine and aircraft interior and exterior and exterior))
Active markting of Adria Airways web siteActive markting of Adria Airways web site Further developement of our own pilot training resources and facilitiesFurther developement of our own pilot training resources and facilities
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Cost ManagementCost Management
Direct operatingDirect operating costscosts
Fleet optimisationFleet optimisation- Lease of two A320 aircraft in “wet lease” - Lease of two A320 aircraft in “wet lease”
- - Due to too large gap between the Canadair CRJ-200 and the AirbusDue to too large gap between the Canadair CRJ-200 and the Airbus
A320 aircraft, we leased two intermediary capacity aircraft with crewA320 aircraft, we leased two intermediary capacity aircraft with crew - Purchase of two new CRJ 900 aircrafts.- Purchase of two new CRJ 900 aircrafts.
- Lower operating expenses- Lower operating expenses
- Better occupancy of the aircraft- Better occupancy of the aircraft
- Options for CRJ900 and CRJ1000- Options for CRJ900 and CRJ1000
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Cost ManagementCost Management
Direct operating costsDirect operating costs
MMitigatitigatinging high prices of kerosene through certain measures: high prices of kerosene through certain measures:- - selecting the most competitive offerselecting the most competitive offer- - planning the use of aircraft appropriate to the number of passengers;planning the use of aircraft appropriate to the number of passengers;- - adding adding of fuelof fuel surcharge surcharge- u- use of financial derivativesse of financial derivatives
Reviewing contracts with individual airports to achieve significant Reviewing contracts with individual airports to achieve significant savings in airport chargessavings in airport charges
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Cost ManagementCost Management
Direct Operating costsDirect Operating costs
Maintenance costsMaintenance costs- Challenge of cost management in fleet investment maintenance- Challenge of cost management in fleet investment maintenance
- Signing a contract with the manufacturer of the engines for the A320,- Signing a contract with the manufacturer of the engines for the A320,
IAE, to maintain engines and for payment of costs by engine flight hours;IAE, to maintain engines and for payment of costs by engine flight hours;
advantages:advantages:
– An easing of cashflowsAn easing of cashflows– Equal distribution of costs over yearsEqual distribution of costs over years– Lower maintenance costsLower maintenance costs
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Cost ManagementCost Management
Indirect operating costsIndirect operating costs
reduction of cabin servicesreduction of cabin services rationalisation of distribution networkrationalisation of distribution network reorganisation of company structure and job descriptions (introducing reorganisation of company structure and job descriptions (introducing
stimulating salary system with variable part of he salary)stimulating salary system with variable part of he salary) outsourcing of certain activities (maintenence of IT systems, general outsourcing of certain activities (maintenence of IT systems, general
purchasing, cleaning…)purchasing, cleaning…)
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Cost ManagementCost Management
Non – operating resultNon – operating result
Refinancing of the majority of long-term foreign currency loans; replacing fixed Refinancing of the majority of long-term foreign currency loans; replacing fixed high-interest Dollars loans to Euros and cheaper sources of financehigh-interest Dollars loans to Euros and cheaper sources of finance
– cash-flow was improved due to the moratorium on repayment of the principalcash-flow was improved due to the moratorium on repayment of the principal – Savings in financial costsSavings in financial costs
Adoption of a financial risk management strategy in order to achieve effective Adoption of a financial risk management strategy in order to achieve effective and systematic risk managementand systematic risk management
- interest rate risk- interest rate risk - currency risk- currency risk - risk associated with fuel price changes.- risk associated with fuel price changes.
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MiscellaneousMiscellaneous
Intensively progressing with the electronic ticket projectIntensively progressing with the electronic ticket project Continuing with Continuing with the trend of encouraging internet sale and other modern sales the trend of encouraging internet sale and other modern sales
channels.channels.
Building new headquarters and centraliseing the company in one location.Building new headquarters and centraliseing the company in one location.
Organisation of effective controlling; primarily by establishing profit and cost Organisation of effective controlling; primarily by establishing profit and cost centres.centres.
Effective management of IT system.Effective management of IT system.
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Load factors
68,37
66,40
63,50
0,00 20,00 40,00 60,00 80,00
estimate 2007
2006
2005
Index
105
103
ResultsResults
Continuous improving of load factors.Continuous improving of load factors.
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Number of passenger carried
1.126.460,00
1.018.007,00
928.662,00
0,00 500.000,00 1.000.000,00
estimate 2007
2006
2005
Index
110
111
A growing number of passengersA growing number of passengers carried carried
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Operating Revenues in EUR
174.665.677
154.802.456
134.534.125
0 50.000.000 100.000.000 150.000.000 200.000.000
estimate 2007
2006
2005
Index
115
113
Growth of the scale of operations of Adria Airways d.d.Growth of the scale of operations of Adria Airways d.d.
Net profit Net profit of Adria Airways d.d.of Adria Airways d.d.
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Net profit/loss in EUR
-9.572.274
70.102
125.258
-9.600.000 -4.600.000
estimate 2007
2006
2005
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SummerySummery
Striving to became leading carrier in the BalkansStriving to became leading carrier in the Balkans
Striving to expend and optimize the fleetStriving to expend and optimize the fleet
Remain the main maintenance centre for CRJ aircraftRemain the main maintenance centre for CRJ aircraft
Profiting Slovenia’s forthcoming EU Presidency for proving our excellence and Profiting Slovenia’s forthcoming EU Presidency for proving our excellence and improving our business resultsimproving our business results
3 Airbus A3203 Airbus A320
Adria Airways FleetAdria Airways Fleet
7 Canadair Regional Jet 2007 Canadair Regional Jet 200
2 Canadair Regional Jet 9002 Canadair Regional Jet 900
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The Adria Airways network of scheduled and The Adria Airways network of scheduled and charter flightscharter flights
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Thank you for your attentionThank you for your attention