Struggling Central European budget carrier SkyEurope Airlines is facing temporarily higher aircraft rental charges after being forced to wet-lease aircraft to replace capacity lost through repossession of much of its fleet.
The airline turned in a slightly higher net loss of €11.4 million ($14.4 million) for the first quarter, although this did not account for costs associated with its return of several aircraft to lessors.
SkyEurope incurred €2.1 million of redelivery expenses for the three months ending 31 December 2008.
The airline agreed to redeliver four Boeing 737 aircraft to GECAS in October and January, and GECAS subsequently terminated leases on all remaining aircraft it had placed with the carrier. SkyEurope has also returned an aircraft to lessor Chishima Real Estate.
In its first-quarter statement the airline says it will incur redelivery costs of €5 million with respect to the GECAS aircraft and €700,000 for the Chishima aircraft during 2009.
"We have taken this opportunity to source cheaper aircraft which will benefit us during periods of low utilisation," says the carrier.
Aircraft rental costs are expected to be higher during the current second quarter, it says, because the airline is having to incur higher wet-lease expenses while it seeks to replace the lost GECAS capacity with cheaper, longer-term dry-leased aircraft.
SkyEurope's revenues stayed largely unchanged at €52.8 million and its cash position by the end of December had fallen by 95% to just €1.1 million.
Despite its financial predicament, the airline remains optimistic - highlighting a 16% improvement in revenue per seat and a 9% increase in average yield.
Source: Air Transport Intelligence news
