CITYJET REPORTED a loss of €16.2 million in the year to the end of March 2008 in spite of a 12.4 per cent rise in turnover.
This was a significant reversal in fortune for the Swords-based airline, which is wholly owned by Air France-KLM, given that it reported a profit of €23.5 million in the year to the end of March 2007.
Chief executive Geoffrey O'Byrne White said that the loss was the result of an expansion of its services from London City Airport, from where it launched nine new routes, and the replacement of its 25-strong fleet of aircraft.
"It reflects the change in our status of being a relatively stable franchise model based around flying to Charles de Gaulle to a new model based around expansion out of London City," he said.
Mr O'Byrne White said the airline was likely to post a loss in the current financial year. "We are still in an investment phase," he said. "Very few airlines are going to be posting a profit this year."
The CityJet chief executive said bookings in the current year are down about 15 per cent.
Mr O'Byrne White said CityJet's turnover is also likely to be down in the year to the end of March 2009 as a result of the global recession and the fall-off in consumer demand.
"Given what's happened in recent months, it's [CityJet's turnover] likely to be depressed," he said. "You can't be optimistic for this year given the overall economic environment we are facing."
CityJet's revenue rose to €293.5 million in the 12 months to the end of last March, compared with €261.2 million in the previous year.
Its cost of sales soared to €265.4 million from €199.7 million. Administrative expenses rose by 14 per cent to €6.9 million while its distribution expenses increased to €35.4 million from €33 million.
This left it with an operating loss of €14.2 million last year compared with €22.4 million in the previous 12-month period.
It also incurred net interest costs of just more than €2 million to bring its loss for the year to €16.2 million. This loss had the effect of reducing CityJet's accumulated profits to €22.4 million.
CityJet agreed to acquire Antwerp-based regional airline VLM in February 2008, although the deal didn't receive regulatory clearance until October. The accounts indicate that VLM was valued at €178 million.
The acquisition of VLM will allow CityJet to expand its services from London City Airport. The merged group is now the largest slot holder at the airport, which is popular with business travellers.
CityJet's accounts show that its turnover from Ireland rose to €42.2 million last year from €31.5 million in the previous year.
Income from the UK rose to €130.4 million from €34.3 million but revenue from the rest of Europe declined to €120.9 million from €195.4 million.
Staff numbers rose to 699 from 612 with its total payroll costs increasing to €32.8 million from €27.2 million. Directors were paid €381,615 in fees and other emoluments last year compared with €382,129 in the previous period.
