Your financial results are getting better as you reduced your deficit. How did you manage to reduce your deficit?
We are benefiting from new aircrafts which allow us to reduce operating costs. We have also significantly increased their utilization by flying many more hours per day. Also our network becomes more mature and we have taken some drastic measures. First, on the revenue side with a load factor active policy by being much more aggressive by the way we promote the airline and by developing a much better yield management, and introducing better forecasting tools which enable us to predict in advance what will be the demand and what we have to stimulate. On the cost side, we are embarked on a quite aggressive cost cutting program and we try to see how we can simplify the business, and really benefit from what we have, in order to become more efficient.
SkyEurope’s EBIT is negative (-5.2m Euros), how do you plan to finance your growth in the future?
We have had a capital increase in September 2006, and we have very large investors in the company. But at the moment, we are in lines with our budgets, and we will deliver an EBITDA positive this year for the first time. It shows that we are able to be profitable.
How do you see the Central and Eastern market as you left Budapest and Krakow, especially with your competitor WizzAir?
It was important to concentrate the fleet because we can reduce our costs by having fewer bases. So we have decided to enter Vienna, and we are growing tremendously in Vienna, we have two aircrafts during the summer season, and we are going to grow to six aircrafts during the winter season. We have identified Austrian airline as a relatively weak competitor and we can actually combine our Eastern European cost structure and the Western European revenue potential. Therefore, in order to take these opportunities, we simply had to take the aircrafts from somewhere else which doesn’t mean that we won’t go back to these markets one day. But at the moment, we really had to be rational and try to put the capacity where it could deliver the best margins.
Since September 2007, your fuel is not hedged. What could be the impact of it on your activity?
We have done a pretty good fuel hedging for 2007. Indeed, during the summer 2006 the fuel prices were close to 80 dollars then it went down in November and December to 55 dollars. We hedged at a time when the spot price was at 55, and because you normally pay a premium when you make a long-term hedge, we hedged at 62.5 dollars per barrel. Our experience over the last two years showed us that fuel prices tend to be high during the summer because of speculation, and they tend to go down by the end of the year when hedge funds take their profits. So we still intend to hedge, probably close to the end of the calendar, and try to repeat basically what we have done last year.