Atlantic Airways P/F - Company Announcement

Atlantic Airways adjusts to lower activity

Atlantic Airways Stock Exchange Announcement 14/2009

Atlantic Airways adjusts to lower activity

The result before tax for the first nine months of the year was a DKK 7.8
million profit, and after tax a DKK 6.4 million profit. The result before tax
for the third quarter was a DKK 4.4 million loss, and after tax a DKK 3.6
million loss. 

The hard impact of the global economical crisis on the airline industry is
evident in Atlantic Airways' result. The company's total production decreased
by 34% during the first nine months of 2009 compared to the same period last
year. 

In the third quarter, the company's total production decreased by 53% compared
to third quarter 2008, and most of this decrease is related to ACMI charters
abroad, but the market for off-shore helicopter services has also contracted
severely in the past six months. 

”The loss posted for this quarter is evidence that the company's core
operations have been severely affected by the domestic and global economic
downturn. We continue our efforts to adjust our operations to a lower level of
activity - we had 7 airplanes in operation earlier this year, and we expect to
operate 4 airplanes next year,” says Mr. Magni Arge, CEO of Atlantic Airways. 

The outlook for improved operations is good when all the measures undertaken to
reduce the fleet, reduce capacity, and to rationalise operations come into full
effect in 2010. 

Scheduled services have decreased by 9% so far this year, but the reduction in
passenger numbers appears to have stabilised at this level. Total passenger
numbers in the first nine months of 2009 on the scheduled services network
decreased by 16,319 from 171,757 to 155,441, a decrease of 9%. In the third
quarter of 2009 the decrease in passengers on scheduled services was 10%. 

The result of core operations was DKK 14.6 million in the third quarter
compared to DKK 37.9 million third quarter 2008. Total revenue for the first
nine months of this year was DKK 319.2 million compared to DKK 428.9 million
same period last year, or 26% lower this year. 

“It is therefore not inconceivable that the fourth quarter will cancel out the
profit earned for the first 3 quarters, leading to a meagre full-year result.
The recent decision by the Vágar Airport Authority to increase virtually all
its service charges just adds to the burden,” says Mr. Arge. 

It is Atlantic Airways' view that the planned development of Vágar Airport is
necessary. Expanding the airport should encourage operators and make travel
easier for our passengers, as well as increasing revenue for the tourism sector
in Faroe Island, which has room for growth. It is however a hindrance for
growth that passenger taxes and airport charges are among the highest in
Europe. 

The company's equity was DKK 226 million as of 30 September, and the equity
ratio 51%. Cash flow is good - available cash was DKK 105 million as of 30
September, while the company's long-term debt was DKK 136 million 


For further information contact:
Magni Arge, CEO, tel +298 213700- magni@atlantic.fo
Marius Davidsen, CFO, +298 213703 - marius@atlantic.fo

Attachments:

aa q3-2009.pdf

aa annoucement q3-2009.pdf