According
to IATA data, the aviation industry generated a smaller profit in
2012 than in the year before. There are certain parameters that can't
be regulated, e.g. high fuel prices and the slowing down of the
global economy. Parameters such as these have a considerable impact
on the aviation industry; when the GDP falls below 2%, the aviation
industry starts to generate losses. It was regional airlines that saw
the biggest decline in the number of passengers. However, the
predictions for 2013 are much better, with no losses predicted for
European air carriers; we firmly believe that Adria will be one of
them. The industry will see a faster growth in revenue as well as an
increase in capacities and their utilisation rate.
Despite the increase of revenue per passenger, Adria's operations in 2012 deviated somewhat from the restructuring programme. In 2012, the actual number of passengers exceeded the projections in the restructuring plan by 1.5%, while the operating income was higher by 14%. Despite the good results, the net loss is higher than anticipated. Deviations from the restructuring programme were made mainly for cost reasons. The number of aircraft in the fleet has still not been reduced completely. This will be done in the 2013 fiscal year. As a consequence, the number of employees and the labour costs will also be reduced.
Operations were mainly negatively affected by the strengthening of the US dollar (6% from September 2011 to the end of 2012), which led to higher prices of fuel. Operations were further hindered by the economic conditions on the market, with the GDP decreasing by 2.3% in 2012. These reasons had a negative impact of some EUR 4 million on the operational result.
Due to the poorer result in the 2012 fiscal year, the Management Board has adopted additional costs-related measures that will lead the company safely through the restructuring process and ensure its survival in the long term. The company will focus more on marketing activities, as we see an opportunity in passengers travelling from nearby airports where low-cost airlines operate from. A survey shows that as many as 174,000 passengers from Slovenia depart from nearby airports. We are convinced that by increasing marketing activities and offering a good product, we could increase our revenue by winning over at least 10% of the Slovenian passengers that now depart from foreign airports. The claim is supported by our recent First Minute offer, which shows that Slovenian passengers would still prefer to depart from Ljubljana, provided they can get tickets at affordable prices, since travelling to other airports near and far is stressful and no provisions are made for passengers in the event of flight delays or cancellations. We will continue to run First Minute offers and adapt them to the needs of our passengers, because in Adria we believe that our passengers need us just as much as we need them.
The key items of operations in the 2013 fiscal year are fleet reduction, increasing the total number of passengers by 5% and consequently increasing revenue by 1%, the reduction of operating costs by EUR 9 million, the reduction of the number of flights by 1.7% compared to 2012, and improving the fleet utilisation rate by 17%.
Adria was successful in concluding new business agreements with foreign air carriers, which means that we will be able to offer our passengers better connections and lower prices for flights to destinations in the East and in North America. The summer flight schedule has brought with it the reintroduction of a connection between Ljubljana and Paris.
2013 brings a number of activities related to revenue as well as costs. Adria's main goal is to continue the restructuring programme and achieve positive operations; we firmly believe that we will manage this by the end of the year.
