Eurowings earns record benefits from partnerships

Europe's largest independent regional airline, Germany's Eurowings, reported record levels of revenue and passengers for the last financial year.

Almost half of the extra business was generated by successful partnerships, with flights operated in conjunction with KLM/Northwest leading the strong growth. Eurowings' earnings from what it calls its "co-operation traffic" amounted to DM347 million ($180 million) in 1999 - a leap of 26.8% over the previous year.

Total passenger figures exceeded 3 million for the first time, again almost half carried on services operated with longstanding partners KLM/Northwest and Air France, as well as Alitalia, a partner for two years. However, services flown with Air France to Paris and with Alitalia to Milan did not quite meet expectations.

Along with other carriers in Europe, Eurowings could not escape negative external influences in 1999, but was able to stay firmly in the black, although below its projections.

Spiralling fuel prices and the strong US dollar led to an increase in aircraft-related costs, resulting in a 33% drop in operating profits.

Eurowings plans to replace most of its turboprop fleet with new jets by 2002, probably retaining only the newer ATR 42-500s for its feeder services to Amsterdam. Its leases of BAe 146s will also not be renewed when they run out in the same year.

The airline is likely to opt for a family of aircraft in the 50-90-seat capacity range. Executive board chairman Friedrich-Wilhelm Weitholz, who took over from Reinhard Santner last September, says Eurowings is examining options to finance this potential $500 million fleet acquisition. An international public offering is the most likely choice.

Source: Airline Business