Reduced levels of activity affect Atlantic Airways´ result

Reduced levels of activity affect Atlantic Airways´ result



Atlantic Airways´ 2009 result was a loss before tax of DKK 8.1 million and DKK

6.6 million after tax - write down of assets affect the result by DKK 4.2

million. The global economic crisis and a reduced level of activity severely

affected the company´s profit and loss account. Atlantic Airways is adapting to

the circumstances and remains a solid company with equity of DKK 214 million,

and an equity ratio of 54%



Atlantic Airways´ revenue decreased by 26.5% from DKK 547 million to DKK 402

million in 2009, and block hour production decreased by 40% from 17,350 to

10,433. The decrease was mainly caused by steep decline in demand for charter

and ACMI operations outside Faroes as well as helicopter operations.



Charters and ACMI abroad decreased to very low levels in the second half, and

off-shore helicopter operations also fell to a much lower level than

anticipated. The decline in scheduled services to and from the Faroe was not as

severe. Passenger numbers decreased by 9%.



The decline in production also affected the result of core operations. EBITDA

reduced by 50% to DKK 44 million.



“The company is continually adapting to changes in the business environment.

The company´s main focus is to rationalise and achieve a viable core operation

comparable to the level of activity in the second half of 2009, and the aim is

to achieve a better result this year”, says Mr. Magni Arge, CEO of Atlantic

Airways.



The benefit of adjustments to a lower level of activity does not show up as

rapidly as the decline in revenue. The company foresees more cost efficient

operations this year when all the measures put in place to reduce the fleet,

reduce production, and rationalise operations come into full effect. The fleet

was reduced by two aircraft last year, and the company has also reduced the

number of departures in line with demand. As of March this year the company

employed 165 full-time equivalent compared to 255 at the corresponding time

last year.



Demand in the tourist segment travelling to Faroe Islands shows an increase so

far this year, and passenger development during the first two months of 2010

are in line with our expectations. A reduction in passenger taxes to the

Treasury and Airport Authority would be welcomed by the Faroese airline and

tourism industries, as a reduction would result in lower ticket prices and

stimulate demand. The passenger taxes in Faroe Islands are among the highest in

Europe.



Atlantic Airways expects to introduce the new Airbus A319 aircraft into service

during first quarter of 2012, when the expected extension of the runway at

Vagar is completed. The company embraces the development of the airport and

looks forward to an improved environment for a Faroe Islands based airline in

the future.