SkyEurope Airlines
Central Europe’s
First Low Cost Airline
November 2004
Disclaimer
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All statements contained in this presentation that are not statements of historical facts, including
statements on projected operating results, financial position, business strategy and other plans
and objectives for future results, constitute forward-looking statements and are prediction of, or
indicate, future events and future trends which do not relate to historical matters.
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No person should rely on these forward-looking statements because they involve known and
unknown risks, uncertainties and other factors which are, in many cases, beyond SkyEurope
Airlines’ control and may cause its actual results, performance or achievements to differ materially
from anticipated future results, performance or achievements expressed or implied by the forwardlooking statements and from past results, performance or achievements.
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These forward-looking statements are made as of the Date of this presentation and are not
intended to give any assurance as to future results. None of SkyEurope Airlines, its employee and
representatives assume any obligation to update these statements.
Central Europe Specificities
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8 Central European countries and
75 million inhabitants joined the EU
on 1 May 2004
Krakow
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Strong economic growth triggered by
removal of borders
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Lack of competitive ground
transportation
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Lack of affordable air transport
SkyEurope Concept
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Started in Bratislava because:
– Gap in the market: no schedule airline in Slovakia after Czechoslovak
separation
– Proximity to Vienna (only 50 km) making Bratislava the
“Stansted Airport” of Vienna
– As a low-cost airline operating from a low cost country, SkyEurope
benefits from a competitive cost structure
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Business development strategy:
– „Connecting the dots“ in a multi-base network – instead of a traditional
airlines’ hub-and-spoke network
– Base in Budapest since November 2003
– Base in Warsaw since May 2004 and in Krakow since September 2004
– Additional bases planned in Central & Eastern Europe
What Low Cost Means
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Simplicity: point-to-point connection, no-frills (lounges, newspaper)
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Light structure: subcontracting of handling, catering, heavy maintenance
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Intensive use of technology to maximize efficiency (reservation, payment,
ticketing, etc.)
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Low cost means high quality of maintenance and training according to
latest EU standards (JAR OPS 1 and JAR 145) to allow high aircraft
utilization
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Low costs enable an airline to offer low fares, and stimulate the market
growth, by attracting new air passengers previously traveling by car, bus or
train.
Founders & Management
• Alain Skowronek
– EBA Express (Belgium):
first low cost airline in
Europe;
– Strategic sale to Virgin
Express in 1996; IPO in
1997;
– Former General Manager
of City Bird Airlines.
• Christian Mandl
– EU-related projects in
Central & Eastern Europe;
– Business Development
consultancy in Bratislava.
Investors
European equity funds of:
and private Central European investors
SkyEurope Milestones
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Founded in 2001
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3rd year of operation
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4 bases in Hungary,
Slovakia and Poland
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Fleet of 13 aircraft
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19 destinations
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35 routes
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12 countries
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Close to 1 mil. passengers
Bratislava Scheduled Passengers
140,000
Growth over the period
Jan.-Apr. 2003/2004
120,000
100,000
• SkyEurope is responsible
for 83% of the growth
• 141% growth of Bratislava
scheduled passengers
volumes
• 271% growth of SkyEurope
passengers volumes
Increase SkyEurope
80,000
Increase other carriers
60,000
Scheduled passengers
Jan.-Apr. 2003
40,000
20,000
0
Jan.-Apr. 2004
SkyEurope Market Share at Bratislava
Scheduled Flights Jan.-Apr. 2004
SkyEurope
Others
34%
66%
Low Cost Production Basis
Labour Cost as % of Revenue
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
37.5%
26.5%
10.9%
13.3%
6.9%
SkyEurope
Ryanair
Source: Raymond James’ Growth Airlines Outlook 2004.
easyJet
JetBlue
Airways
Southwest
Airlines
High Productivity
Employees per Avg. Aircraft
110
120
100
80
86
45
60
39
50
40
20
0
SkyEurope
Ryanair
Source: Raymond James’ Growth Airlines Outlook 2004.
easyJet
Southwest
Airlines
JetBlue
Airways
Fleet development
2003
2
14
16
9
bases
cities
routes
countries
2004
4
19
38
12
bases
cities
routes
countries
2005
5
22
48
13
bases
cities
routes
countries
SkyEurope’s advantages
• SkyEurope benefits from:
– Operating in a low cost country
– First mover advantage: 3 years of experience in Central Europe
– Recognised brand
– Multi-base network
– Presence not only on East-West but also on East-East traffic
– Strong financial backing
Human resources in Sky
• Who is SkyEurope employee?
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Dynamic individual
English speaker
Creative thinker
Initiative and responsible
Part of the story of building first low fare airline in Central Europe
Team player working in international environment
Cost conscious
Usually graduate from University or with few years experience
Career opportunities seeker
Fun lover
Why SkyEurope Airlines is a
“company to work for”?
• “SkyUniversity”
• “SkySpirit”
• “SkyBenefits”
„SkyUniversity“
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Hire for attitude and skills more than for experience. We look for Excellence.
For many people, SkyEurope is a “University” as they learn something new
(different than cut/paste from previous job).
SkyUniversity means giving opportunity to people even with long working
experience but not in the position they have been hired for.
SkyUniversity means also that most of these newcomers do not have
previous experience in the aviation neither.
SkyUniversity means as well giving opportunity to the current employees to
be internally promoted, to try their skills in different position than the one
they joined in.
SkyUniversity means on-job internal training of all employees.
SkyUniversity means low - cost remuneration of all „trainees“ based on
productivity and results
Added value for employee: unique chance to have responsibility, to learn, to
benefit from internal accelerated promotion philosophy, to gain experience
and have fun
„SkySpirit“
• Dynamic international environment of a young nontraditional airline
• „KISS concept“ = „Keep it simple and smart“ philosophy
• Having fun
• Regular company social employees events rotating in
bases
• Working together to share and achieve the company
vision
• Finding new and creative solutions in all company fields
„SkyBenefits“
• Great opportunity to improve language skills while working in
multinational environment
• Employees standby private travel {applicable for employee qualified
family members}
• Internal Promotion policy
• Internal Mobility among bases
• Additional bonuses provided according to the announced teams
targets achievements
• Performance based remuneration
• Social fund use for various activities in terms of relax, free time,
culture; life events contribution
• Tatrabanka advantages package
SkyEmployees in numbers
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SkyEurope Airlines currently employs up to 600 employees in all its bases
SkyEurope Airlines already employs about 32 employees (17 pilots) Of Zilina
University graduates in following positions:
Flight Operations Manager
Pilots
Operations Control Center Manager
Flight dispatchers
Operations supervisors in our OCC
Ground operations coordinators
Navigation officer
Flight performance officer
Crew planners
Crew controllers
Flight dispatcher assistants
Assistant Flight Operations Manager
Cabin attendants
Booking
• All destinations from €25:
“the earlier you book, the better the price”
• www.skyeurope.com
– Online flight booking
– Online car rentals and hotels booking
• European Call Centre accessible through local numbers
– Reservation agents communicating in 8 languages
(English / French / German / Italian / Hungarian / Slovak / Czech / Polish)
• Travel agencies
– For corporate customers and ministries
– Internet booking tool
First Low Cost Airline to Carry
His Holiness Pope John Paul II
Boeing 737 – “Adriana”
Boeing - Miss Europe from HU
Quote from “The Economist”
“SkyEurope, with its first-mover
advantage, is the likeliest to succeed.”
15 May 2004 - The Economist
Although Wizz Air claims that its base in densely populated Katowice will pay off, it
may struggle to stimulate demand among still hard-up Poles, or to lure British and
Italian passengers to drab Silesia. SkyEurope, with its first-mover advantage, is the
likeliest to succeed. With low costs and ample slots at its base in Slovakia, which
forfeited its national airline after splitting from the Czech Republic in 1993, it
markets Bratislava as a secondary airport for nearby Vienna, allowing it to tap into
demand for low-fare services from wealthier Austrians. As Christian Mandl,
SkyEurope's Belgian chief executive, puts it, “We have the best of both worlds.”
Contact
SkyEurope Airlines
Ivanska cesta 26
P.O. Box 24
820 01 Bratislava 21
Slovakia
Phone:
Fax:
+421 2 4850 1111
+421 2 4850 1000
Chairman:
CEO:
CFO:
COO:
FOM:
Investor Relations Manager:
alain.skowronek@skyeurope.com
christian.mandl@skyeurope.com
juraj.koman@skyeurope.com
graham.williamson@skyeurope.com
peter.svec@skyeurope.com
jaroslav.sopuch@skyeurope.com
Thank you