Cityjet loses €51.5m as growth in passengers fails to generate recovery

DUBLIN-based airline Cityjet last year incurred substantial losses for the second year running with pre-tax losses last year of €51.5 million in spite of recording an increase in passenger numbers.

Accounts just filed by Cityjet Ltd to the Companies Office show the airline’s revenues decreased by 8% from €281.4m to €258.9m in the 12 months to the end of March last year.

The pre-tax loss of €51.5m follows the company recording a pre-tax loss of €63.9m in 2009.

According to the directors’ report, “the negative result at operating level was due to the continued severe economic environment with sharp decline in business traffic and volatility in oil prices and currencies”.

They state the airline’s network out of London City Airport “continued to be impacted by the difficulties in the banking and financial sectors”.

The Swords-based airline is wholly owned by Air France-KLM and is the largest airline operating out of London City airport. The company’s new chief executive, Christine Ourmieres said that “the goal is to return the airline to profit by the end of the 2011/2012 financial year. There are signs we are already on the way to achieving that”.

The directors’ report states that subsequent to year end, Cityjet incurred a cost of €3m as a result of 1,112 Cityjet flights that were cancelled due to the volcanic eruption last April and May.

The figures show the company’s passenger numbers last year increased by 6.5% to 2.1 million, while average fares dropped overall by 16%.

The company’s operating loss last year was €45.7m compared to €55.3m in 2009. The accounts show the airline recorded an impairment charge on its aircraft of €3.5m, while it also incurred interest charges of €2.4m. The accounts also include depreciation costs of €19m.

The filings show the company recorded a gross loss of €5.7m with administrative expenses of €8.2m and distribution expenses of €31.7m resulted in the operating loss of €45.7m.

The figures show the numbers employed by the company decreased by 48 from 727 to 679, with staff costs reducing from €37m to €35.2m. Director’s remuneration last year totalled €377,932.