LONDON, May 28, 2002 (PRIMEZONE) -- Virgin Express Holdings Plc (Nasdaq:VIRGY) (Nasdaq:VIRGD) (Euronext Brussels:VIRE):
Highlights Own direct sales more than doubled year on year Destinations expanded from 8 to 14 over the past year Now the largest carrier from Brussels to European destinations Seasonal loss of EUR 6.7 million versus loss of EUR 3.8 million last year On track for profits for the full year
Chairman's Statements
"In line with my announcement of 28th February 2002, our seasonal losses for the first quarter were as expected at EUR 6.7 million versus EUR 3.8 million in 1st quarter 2001.
Expanding from 8 to 14 main city destinations in Europe has strengthened our position in the Belgian market. Our very newest routes to Athens and Lisbon have started strongly. Overall our load factors were 76% and ahead of last year in spite of the disruptions caused by the start up of SN Brussels Airlines and the start up of so many new routes.
Based on available data, we are now the largest carrier in passengers' numbers from Brussels Airport to European destinations.
A year ago over 40% of our revenues were accounted for by an agreement with Sabena and the first two months of the quarter were in the period where direct sales were still being grown to fully replace the lost Sabena revenue. Since being freed from that contract, our own sales have now more than doubled, with progress being made through all our channels of distribution.
On time performance has been maintained at a level well above industry averages with over 90% of flights leaving on time. We believe that combining value for money fares with a quality product, delivered on time, is key to our continued growth. The travelling public will no longer accept high priced fares on short and medium haul journeys. Low fare travel in mainland Europe accounts for only 5% of air travel according to airline analysts compared to over 20% in the U.S.A. We anticipate a number of years of high growth for the low fare sector in mainland Europe.
Costs continue to be tightly controlled with costs per available seat kilometre down by more than 11%. Keeping costs low remains a critical priority enabling us to offer the travelling public value for money low fares. These fares have expanded the market and allowed us to increase our market share versus the traditional high cost airlines.
Our second quarter has started strongly with load factors over 80% and increasing yields on all routes. We anticipate a profitable second quarter and profits for year-end.
In addition to building our position in the Belgian market, we are looking at opportunities to add a second focus city. We have been in discussions with a number of airports in mainland Europe who have shown significant interest. We are pleased that our progress made over the past quarter has been rewarded by enormous support from our growing mass of customers. We remain more than ever determined to build a major European 'value for money' low fare airline."
David Hoare Executive Chairman Results for first quarter
As previously announced, in the first quarter of 2002 the company reported an expected seasonal loss of EUR 6.7 million versus a loss of EUR 3.8 million in the first quarter of 2001.
Net income per IDS and ADS for the quarter are shown in the table below.
Earnings per IDS and ADS Basic 1Q 2001 1Q 2002 EUR per IDS EUR (0.77) EUR (1.37) U.S.$ per ADS U.S. $(0.24) U.S. $(0.40) Average Shares 4,907,500 4,907,500 U.S. $/EUR (Average) Exchange Rate 0.923 0.876 U.S. $/EUR (Ending) Exchange Rate 0.883 0.872
Revenues
Total revenues decreased 15% to EUR 45.1 million in the quarter ended 31st March 2002, compared to EUR 53.1 million a year ago. The decrease in revenue was planned and a consequence of 3 major events occurred during the year 2001: the restructuring and refocusing of our business from a Brussels hub, the tragic events of 11th September and the Sabena bankruptcy.
Despite the disruption caused by the 11th September and the cessation of our Sabena contract, the company succeeded to maintain and improve the load factor in the first quarter (76%) in comparison with last year. This spectacular achievement was mainly due to the continuous improvement of our services, on time performance and the expansion of our network of destinations.
Expenses
Total operating expenses decreased by 11% to EUR 50.3 million in the quarter, compared to EUR 56.3 million in the same period of the previous year. In 2002, the company continued to improve the process of cost control and succeeded to decrease its system unit costs by 11% to 7.04 Euro cents per ASK, despite a 5% strengthening of the U.S. Dollar.
With the exception of the historical factual information, the statements made in this press release constitute 'forward-looking' statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such 'forward-looking' statements are based on current expectations and involve certain assumptions, risks and uncertainties that could cause actual results to differ materially from those included or contemplated by the statements. The company disclaims any obligation to update any 'forward-looking' statements as a result of developments occurring after the issuance of the press release.
A table of the quarterly result is attached.
Virgin Express Holdings PLC
Unaudited Results for the Three Months Ended
31 March 2001 and 2002
Three Months Ended
(EUR Thousands) March 31
2001 2002
Revenue
Scheduled 45.293 40.167
Charter 1.204 2.163
Other 6.624 2.760
Total Revenue 53.121 45.089
Operating Expenses
Flight Operations 4.855 3.990
Aircraft Fuel 6.570 4.999
Navigation Fees 3.226 3.248
Maintenance 6.421 5.158
Aircraft Ownership 15.067 12.471
Station Operations 10.074 8.418
Passenger Services 2.699 2.764
Sales & Marketing 2.944 4.878
Duty Free Cost of Sales - -
Depreciation & Amort. 350 373
General & Administrative 4.088 4.028
Stock Awards - -
Total Operating Expenses 56.294 50.325
Operating Profit / (Loss) (3.173) (5.235)
Non Operating Income / (Loss) (671) (1.498)
Profit / (Loss) before taxation and (3.844) (6.733)
Tax and Minority interests 46 1
Profit / (Loss) after taxation and
Minority interests (3.798) (6.732)
Operating Data
Scheduled Services (Euro cents/KM)
RPKs (000) 493.743 479.294
ASKs (000) 663.201 632.348
Load Factor 74,4% 75,8%
Revenue per RPK 9,17 8,38
Revenue per ASK 6,83 6,35
Flights Flown 5.493 4.961
Passengers Flown 603.543 504.313
Charter Services (Euro cents/KM)
RPKs (000) 16.712 25.499
ASKs (000) 29.748 41.760
Flights Flown 148 184
Passengers Flown 11.459 16.651
Block Hours Flown 323 430
Total (Euro cents/KM)
RPKs (000) 510.455 504.793
ASKs (000) 692.949 674.108
Revenue per RPK 10,41 8,93
Revenue per ASK 7,67 6,69
Flights Flown 5.641 5.145
Ave. Flight Length 827 901
Passengers Flown 615.002 520.964
Block Hours Flown 9.986 8.801
Fuel Gallons (000) 6.650 6.461
Operating Cost/ASK (1) 7,93 7,04
Ave Fuel Price (US cents per gallon) 90,43 65,83
Ave Exchange Rate USD/EUR 0,923 0,876
Ending Exchange rate USD/EUR 0,883 0,872
(1) Excludes cost associated with Virgin Express Catering
Services and Aircraft sublease operations
CONTACT: Virgin Express
Yves Panneels, Corporate Communication Manager
+32 (2) 752 06 77
Sang-Chul Mathot, Chief Financial Officer
+32 (2) 752 05 25
www.virgin-express.com