euro adhoc: SkyEurope Holding / quarterly or semiannual financial statement / SkyEurope continues to grow and improve its margins • 46% passenger volume growth in the third quarter of FY2006, wi

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31.08.2006

Development of operations

In the third quarter ("Q3") of financial year 2006, SkyEurope
achieved a 46% growth in passenger numbers, and welcomed its four
millionth passenger on board. During the three months from 1 April to
30 June 2006, it transported 702,538 passengers.

The Company made significant operational improvements over the
period. The 50% growth in capacity to 1,015 million ASK (up from 679
million in Q3 2005) was achieved through the introduction of the
first five Boeing 737-700 Next Generation in the fleet, which allowed
to grow the average fleet for the period to 15 aircraft (12 in Q3
2005) and increase aircraft utilisation to 9:46 block hours per day
(9:05 in Q3 2005).

Over the Q3 2006 period, the Company opened 22 new routes and
reallocated capacity from unprofitable routes to Prague, the latest
base in SkyEurope’s network. Its central geographical location has
allowed to reduce average stage lengths by 9% to 1,038 kilometres
(down from 1,141 in Q3 2005).

Financial development

A strong yield improvement of 17% was achieved over the Q3 2006
period, more than offsetting the decrease of load factors to 75% (81%
in Q3 2005), a reflection of a strengthening revenue environment and
increased ancillary revenue initiatives. As a result of this, unit
revenues increased 7% over the quarter to EURc 4.31 per ASK (EURc
4.01 / ASK in Q3 2005), which coupled with strong capacity growth
resulted in 62% increase in operating income to EUR44.6 million
(EUR27.5 million in Q3 2005).

Unit costs were reduced in Q3 2006 by 1.6% to EURc 5.85 per ASK (EURc
5.95 / ASK in Q3 2005). This reduction was achieved despite increased
fuel prices, higher labour costs and significant investments made
related to the establishment of the new base in Prague and
development of infrastructure to improve the revenue management
system and reinforce the SkyEurope brand. These increases were offset
by efficiency gains from the new Boeing 737-700 Next Generation
aircraft (mainly related to decreased fuel consumption and reduced
maintenance costs), benefits of scale on areas such as marketing and
overheads and effective cost management in other areas.

Jet kerosene currently constitutes an increasing portion of
SkyEurope’s costs, accounting for 28% of total operating expenses for
the three months ended 30 June 2006. However, for the period from
March to May 2006, the Company concluded a jet fuel hedging
transaction, covering 90% of its requirements for the period at a
rate of USD 60.5 per bbl Brent equivalent. This fuel hedging
arrangement had a positive impact of EUR0.9 million in Q3 2006 for
SkyEurope.

Adjusted for the impact of increased fuel costs, unit costs were
reduced by 2.9% between Q3 2005 and Q3 2006. Total operating expenses
amounted to negative EUR59.4 million in Q3 2006.

The operating result (EBIT) for Q3 2006 amounted to negative EUR14.8
million, resulting in a 13.5pp improvement of the EBIT margin
compared to Q3 2005.

Development of the group’s property and finances

Property, plant and equipment increased due to capitalised
pre-delivery payments for four aircraft expected for delivery in the
second half of 2007. Total liabilities increase was related to
interest-bearing loans and borrowings with regard to a pre-delivery
payment loan facility for the same four new aircraft and higher
unearned transport income based on increased customer bookings.

The operating cash outflow was EUR5.6 million in the three-month
period to 30 June 2006, mainly as a result of incurred operating
losses over the period.

Outlook

SkyEurope is continuing to pursue its growth strategy with a strong
focus on achieving profitability. Under the direction of the newly
appointed Chief Commercial Officer, Karim Makhlouf, SkyEurope’s
Management will specifically focus on maximising revenues through a
load factor active strategy in terms of yield management and route
planning, and enhanced ancillary revenue offering. The Company will
also implement a number of cost saving initiatives, in areas such as
maintenance, planning and ground handling, with the aim to continue
to optimise its cost base.

Over the coming weeks, SkyEurope will continue to work to implement
the financing for the next stage of its growth strategy, as per the
terms announced on 28 August 2006, to enhance SkyEurope’s liquidity,
growth prospects and path to profitability.

*** SkyEurope Holding AG *** SkyEurope Holding AG is the holding
company of SkyEurope Airlines, a.s. ("SkyEurope"). The company has
been listed on the Vienna and Warsaw stock exchanges (VSE: SKY; WSE:
SKY, ISIN AT0000497003) since 27 September 2005. SkyEurope was
founded on 6 September 2001 by Christian Mandl and Alain Skowronek
and is the largest low-cost, low-fare airline in Central and Eastern
Europe with bases in Bratislava, Budapest, Warsaw, Krakow and Prague.
SkyEurope operates a route network of 73 routes to 37 destinations in
19 European countries and has a fleet consisting of 16 aircraft.

end of announcement euro adhoc 31.08.2006 08:08:57
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ots Originaltext: SkyEurope Holding
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:
SkyEurope Holding AG
Mag. Erhard Schmidt, CFO
Tel.:+421 2 4850 1180
mailto:investor.relations@skyeurope.com
http://www.skyeurope.com

Branche: Air Transport
ISIN: AT0000497003
WKN: A0F5WU
Index: WBI
Börsen: Wiener Börse AG / official market