Report on the Fourth Quarter (Q4) and preliminary results by l990juh

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									Report on the Fourth Quarter (Q4) and preliminary results for the FY 2007



     New strategy pays off as SkyEurope Holding AG reports a record Q4 (to 30th
     September 2007) EBIT profit & a record load factor for the year.

     • Full year EBIT and EBITDAR guidance achieved as SkyEurope reports a record Q4
       EBIT profit of EUR 14.3 million and EBITDAR for the year of EUR 9.6 million.

     • Steven Greenway will be appointed as SkyEurope’s Chief Commercial Officer
       effective 1 December 2007, bringing a track record of success in e-commerce from
       Virgin Blue.

     • Continued strong growth with revenue increasing by 22.1% during Q4 and,
       passengers flown reaching 1.1 million up from 991,000 despite less average aircraft
       in the quarter than in Q4 2006.

     • Revenue per available seat kilometre improves 15.7% in Q4 2007 and 11.5% on a
       YTD basis, reflecting improved load factors and yields.

     • Aircraft utilisation increases by 9.1% during the quarter to 12:25 hours (up from
       11:23 hours in Q4 2006) with continued focus put on high asset utilisation.

     • Continued focus on cost base improvements showing results with the CASK
       decreasing 11% during the quarter (7.2% excluding fuel).

     • SkyEurope maintains its on-time performance, being one of the most punctual
       airlines in Europe.

     • Two new on-balance sheet financed 737-700 NG aircraft were delivered in Q4
       reducing the average age of SkyEurope’s fleet, which is now the youngest in Europe
       with an average age of 10 months.

     • The complete 2007/08 Winter schedule was announced focusing on increased
       frequencies to European destinations and an overall improved product, featuring
       higher frequencies to less destinations and more convenient departure times.



     FINANCIAL CALENDAR

     30 November 2007                            Preliminary financial results
     10 January 2008                             2007 Annual Report
     To be announced (Jan/Feb 08)                Annual General Meeting




                                                       Q4 and preliminary FY 2007 financial results
COMPARATIVE FINANCIAL HIGHLIGHTS OF THE GROUP
for Q4 and FY 2007



In thousands of EUR,
unaudited
                                    30 Sept        30 Sept      Change       30 Sept        30 Sept     Change
                                      2007           2006         %           2007           2006         %
                                    3 months       3 months                 12 months      12 months
Financial data
Operating revenue                      88,915        72,798      22.1%        236,177        185,358     27.4%
EBITDAR                                23,151         1,282         n.m.        9,604        (32,143)    n.m.
EBITDAR margin                          26.0%          1.8%      24.2 pp         4.1%         (17.3%)    21.4 pp
EBIT                                   14,325        (6,580)     n.m.         (20,913)       (55,477)       n.m.
EBIT margin                             16.1%         (9.0%)     25.1 pp        (8.9%)        (29.9%)    21.4 pp

Equity                                 (2,738)       16,369     (116.7%)        (2,738)       16,369    (116.7%)
Cash and cash equivalents              11,579        41,789      (72.3%)        11,579        41,789     (72.3%)

Operating data
Average no. of aircraft                     14.0         15.7    (10.7%)            12.9         14.0    (7.7%)
No. aircraft at period end                  14.0         14.0      0.0%             14.0         14.0     0.0%
Passengers                          1,138,580       991,216       14.9%      3,312,443     2,560,597     29.4%
Aircraft utilisation (BH per day)         12:25        11:23       9.1%           10:45          9:29    13.2%
ASK (million km)                        1,396         1,323        5.6%          4,230         3,703     14.2%
RPK (million km)                        1,232         1,110       11.0%          3,503         2,801     25.1%
Load fac tor (RPK/ASK)                  88.2%         83.9%        4.3 pp        82.8%        75.6%       7.2 pp
Revenue per ASK (EURc)                    6.37          5.50      15.7%            5.58         5.01     11.5%
Revenue per seat (EUR)                    67.7          59.5      13.7%            58.2         52.8     10.2%
Yield in EURc (Rev./RPK)                  7.22          6.56      10.1%            6.74         6.62      1.9%
Average revenue per PAX (EUR)             78.1          73.4       6.3%            71.3         72.4     (1.5%)
Cost per ASK (EURc )                      5.34          6.00     (11.0%)           6.08         6.50     (6.6%)
Cost per ASK ex fuel (EURc)                4.01         4.31      (7.1%)           4.71         4.85     (3.0%)
Cost per seat (EUR)                       56.8          64.9     (12.5%)           63.4         68.7     (7.7%)
Sectors                                 8,854         8,624        2.7%         27,796        25,542      8.8%
Average stage length                     1,063        1,075       (1.1%)         1,041         1,055     (1.4%)
Total staff at period end                   927          860       7.7%             927          860      7.7%
Staff per aircraft                           66           61       7.7%              66           61      7.7%

*Note: Certain reclassifications were made in Q4 2007 affecting several of the reported items.
The comparative information has been restated where applicable. See note 2(a) of the
accompanying financial statements.




                                                                    Q4 and preliminary FY 2007 financial results
Operating and financial review of Q4 2007 and FY 2007 compared with Q4
2006 and FY 2006

Overview

Management

On 30 November 2007, further changes were announced to SkyEurope’s management
team with the pending appointment of Steven Greenway as Chief Commercial Officer.
Steven comes to SkyEurope from Virgin Blue in Australia where he has worked as
Head of E-Commerce. His strong airline background comes from various commercial
positions with companies such as OAG Worldwide, Virgin Atlantic Airways, and Qantas
Airways.

Steven now joins Jason Bitter, appointed CEO of the airline operating company in June
2007 and of SkyEurope Holding AG effective December 2007, and Nick Manoudakis ex
easyJet CFO and founding member appointed CFO in May 2007 for an almost
completely revamped, airline experienced management team.

After successfully launching and developing SkyEurope as a leading CEE brand,
Christian Mandl resigns effective 30 November 2007 as CEO of SkyEurope Holding AG.

Network and fleet

At 30 September 2007 our network was serviced by fourteen 737 aircraft. These
aircraft are all Boeing 737-700 NGs, twelve financed through operating leases with GE
Commercial Aviation Services and the remaining two are owned by SkyEurope and
financed through Bank of Scotland Corporate.

With these aircraft, SkyEurope now flies a total of 43 routes to 30 destinations in 17
countries from our bases in Bratislava, Vienna, and Prague. The Winter schedule, now
in operation, reflects a reallocation of capacity from Budapest and Krakow, to Vienna
and Prague in a move designed to reduce complexity and costs.

SkyEurope currently has ten additional aircraft on firm order to be delivered in 2007
through 2010 and additional six Boeing purchase rights that SkyEurope plans to
exercise in FY 2008 for delivery by 2011. In total, we expect to have 30 aircraft in our
fleet by 2011.

In July SkyEurope announced its new Winter time table focusing on increasing
frequencies to and from key European destinations in order to improve the overall
product and attract higher yields from business passengers.




                                                   Q4 and preliminary FY 2007 financial results
Key Performance Indicators

Available seat kilometre (“ASK”)

Despite a reduction in the average number of aircraft operated during the fourth
quarter (14 in Q4 2007 vs. 15.7 in Q4 2006), the introduction of 14 (larger) Boeing
737 NG aircraft and an increase in average daily utilisation by 9.1% to 12:25 hours per
day (11:23 hours in Q4 2006), resulted in an 5.6% increase in capacity for the Q4
2007 period to 1.4 million ASKs (1.3 million in Q4 2006). On a YTD basis, capacity has
increased by 14.2% from 3.7 million ASKs to 4.2 million ASKs.

Revenue per available seat kilometre (“RASK”)

Revenue per available seat kilometre increased by 15.7% during the quarter from
EURc 5.50 in Q4 2006 to EURc 6.37 in Q4 2007. This was mainly due to a 5.1%
increase in load factor achieved during the quarter and a 10.1% increase in the
average yield per passenger. On a YTD basis, RASK has increased by 11.5% from an
average of EURc 5.01 in 2006 to EURc 5.58 in 2007.

Cost per available seat kilometre (“CASK”)

Cost per available seat kilometre decreased by 11% from EURc 6.00 in Q4 2006 to
EURc 5.34 in Q4 2007. Unit cost reductions were driven primarily by a decrease in
aircraft fuel prices due to fuel hedging, lower sales and marketing expenses in the
quarter (several campaigns were carried out earlier in the year) and the release of
aircraft redelivery provisions during the quarter as all Boeing Classic aircraft had been
redelivered. These decreases were offset by increases in ground handling, airport
charges, navigation charges etc, arising from the move to Vienna, a more expensive
airport. On a YTD basis, CASK has decreased by 6.6% from EURc 6.50 in 2006 to
EURc 6.08 in 2007.

Load factor

The Company implemented a “load factor active” policy at the beginning of the
financial year resulting in an increase in the passenger numbers and overall revenue
per available seat kilometre. As a result of this, load factors increased by 4.3
percentage points during the quarter from 83.9% in Q4 2006 to 88.2% in Q4 2007 and
on a year to date basis, by 7.2 percentage points from 75.6% in 2006 to 82.2% in
2007.




                                                    Q4 and preliminary FY 2007 financial results
Income statement

Revenue

SkyEurope’s total revenue has increased by 22.1% in Q4 2007 vs Q4 2006 and 27.4%
on a year to date basis. Total revenue earned in Q4 amounted to EUR 88.9 million, up
from EUR 72.8 million in Q4 2006. On a year to date basis, revenue increased from
EUR 185.4 million in 2006 to EUR 236.2 million in 2007.

The 41.4% increase in scheduled revenue during the Q4 2007 was driven by a 14.9%
increase in passengers from 991 thousand to 1.14 million (year to date increase of
29.4% from 2.6 million to 3.3 million). The increase in passengers carried reflects a
9.1% improvement in aircraft utilisation from an average of 11:23 hours per day in Q4
2006 to 12:25 hours in Q4 2007 as well as an increase in load factor from 83.9% to
88.2%.

In addition, we have significantly improved our yields during Q4 2007 vs Q4 2006, up
10.1% in the quarter and 1.9% on a YTD basis due primarily to improved revenue
management and higher summer demand in Q4 2007 vs Q4 2006.

Total ancillary revenues per passenger grew very significantly by 76.9% in Q4 2007 vs
Q4 2006 (up 172.4% on a year to date basis) attributable primarily to increased
passengers and web traffic and to an enhanced portfolio of products introduced and
offered to customers, including seat assignment, car rental and hotel bookings, options
which are available through SkyEurope’s website.

The overall decrease in charter revenue of 43.9% in Q4 2007 vs Q4 2006 (31.6% on a
YTD basis) is due to continued focus being put on SkyEurope’s scheduled operations
and less on charter activities.

Salaries, wages and benefits

Salaries, wages and benefits have increased in Q4 2007 vs Q4 2006 by 27.5% (16%
on a YTD basis) due to a larger number of crew staff due to increased flying activities
in the summer period and upward salary adjustments made to pilots and mechanics
during 2007 to bring the compensation to competitive levels. Staff costs per ASK have
increased in Q4 2006 vs Q4 2007 from EURc 0.45 to EURc 0.54 (20.8%) and on a YTD
basis have remained stable at EURc 0.61. The increased number of staff at year end
represents Krakow and Budapest based staff which were subsequently reduced after
the closure of those bases in October 2007.




                                                   Q4 and preliminary FY 2007 financial results
Aircraft fuel

SkyEurope’s fuel costs decreased by 16.4% from EUR 22.3 million to EUR 18.7 million
in Q4 2006 to Q4 2007 primarily due to a decrease in fuel prices (hedged for July and
August at an average rate of USD 62.5 bbl/equivalent) the benefit of more modern and
fuel efficient aircraft, and a weakening US$/Euro exchange rate. On a per ASK level,
costs decreased by 20.8% from EUR 1.69 to EUR 1.34. On a year to date basis, fuel
price per ASK decreased 17% from EUR 1.65c to EURc 1.37. SkyEurope had a fuel
hedge in place for most of FY 2007, the last of which expired in August 2007. Since
then the fuel is unhedged but the cost is offset by a weak US Dollar on which we have
a favourable hedge.

Aircraft rental

There was an increase in aircraft rental expense by 13.1% from EUR 7.1 million to EUR
8.1 million in Q4 2007 vs Q4 2006 which despite a decrease in the average number of
aircraft in the fleet is due to a higher proportion of more expensive aircraft being used
(Boeing 737-700 NG aircraft vs Boeing Classics). On a cost per ASK basis, aircraft
rental expenses have increased during the quarter by 7.1% from EURc 0.54 to EURc
0.58 due to the reasons described above, however partially offset by the 9.1%
increase in aircraft utilisation in the quarter. On a year to date basis, aircraft rental
costs have increased 33.2% from 21.8 million 2006 to EUR 29 million and 16.6% on a
cost per ASK from EURc 0.59 to EURc 0.69. This increase is offset by fuel efficiencies
and lower maintenance costs of the newer aircraft.

SkyEurope is targeting to further increase its aircraft utilisation in order to substantially
reduce rental cost per ASK.

Sales and marketing

These costs have increased as expected due to higher booking related costs (credit
card commissions and call centre fees) attributable to higher passenger numbers and
load factors combined with targeted efforts made to further promoting SkyEurope’s
brand in key markets and to establish the Vienna base. Sales and marketing costs
increased on a YTD basis by 26.2% from EUR 10.5 million in 2006 to EUR 13.2 million
in Q4 2007. Sales and marketing expenses per ASK increased 10.4% from EURc 0.28
to EURc 0.31.

Sales and marketing activities took place earlier during the year resulting in high
expenditures in Q2 and Q3 2007 during the launch of the Vienna base and therefore
less expenditure was required during Q4 2007. As a result, sales and marketing
expenses decreased in Q4 2007 vs Q4 2006 by EUR 2.0 million (70.9%).




                                                      Q4 and preliminary FY 2007 financial results
Ground handling charges

During Q4 2007, ground handling charges increased by 18.1% versus Q4 2006 due to
an increase in sectors flown and a higher average load factor. We also commenced
operations in Vienna where the ground handling charges are more expensive. On an
ASK basis, ground handling charges have increased from EURc 0.33 in Q4 2006 to
EURc 0.37 in Q4 2007 or by 11.8%. On a YTD basis, ground handling charges have
increased by 18.9% from EUR 16.2 million to EUR 19.2 million and on an ASK basis
have increased by 4.1% from EURc 0.44 to EURc 0.45.

Airport charges

Airport charges, which represent landing fees (fixed turnaround charges) and per
passenger fees charged by airports have increased by 18.6% during the quarter from
EUR 14.1 million in Q4 2006 to EUR 16.7 million in Q4 2007 driven primarily by a
14.9% increase in passengers carried and a 2.7% increase in sectors flown resulting in
higher total per passenger charges in addition to higher airport fees charged by the
Vienna airport. On a year to date basis, airport charges have increased by 29.8% from
EUR 39.5 million in 2006 to EUR 51.3 million in 2007.

Airport charges per ASK increased during the quarter by 12.4% from EURc 1.06 in
2006 to EURc 1.19 in 2007. On a year to date basis, there has been a 13.6% increase
in airport charges from EURc 1.07 to EURc 1.21.

Navigation charges

SkyEurope’s navigation charges which include over-flight fees, air traffic control and
approach fees increased by 10.2% during the quarter from EUR 6.8 million in Q4 2006
to EUR 7.4 million in Q4 2007. On a year to date basis, navigation charges have
increased 16.1% from EUR 20.3 million in 2006 to EUR 23.5 million in 2007. The
increase was primarily due to an increase in ASKs flown and a higher average
maximum take off weight of Boeing 737-700s vs Boeing Classics.

On a cost per ASK basis, navigation charges increased by 4.4% from EURc 0.51 to
EURc 0.53 during the quarter and increased 1.7% from EURc 0.55 to EURc 0.56 on a
year to date basis.

Maintenance, materials and repairs

Significant maintenance expenses were incurred during the 9 month period ended 30
June 2007 due to redelivery of some Boeing Classics, however this has been offset by
the effect of lower maintenance costs on newer and more reliable aircraft and
improved maintenance contracts with suppliers which lower our variable maintenance
costs.   Furthermore, all Boeing Classic aircraft have now been redelivered and
therefore redelivery expenses have been released in Q4 2007 causing a reduction in




                                                  Q4 and preliminary FY 2007 financial results
maintenance, materials and repairs. Due to these factors, maintenance expenses have
decreased in Q4 2007 vs Q4 2006 falling 87 % from EUR 8.8 million to EUR 1.1 million
and by 30 % on a YTD basis from EUR 27.7 million to EUR 19.4 million. On a per ASK
basis, costs decreased during Q4 by 87.7% from EURc 0.66 in Q4 2006 to EURc 0.08
in Q4 2007 and on a YTD basis by 38.7% from EURc 0.75 in 2006 to EURc 0.46 in
2007.

Aircraft and passenger insurance

Aircraft and passenger insurance costs reduced by 5.3% from EUR 502 thousand in Q4
2006 to EUR 476 thousand in Q4 2007, despite a 14.9% increase in passenger
numbers. This was a result of lower rates being negotiated with insurance suppliers
and the effect of the strengthening Euro against the US dollar. On a per ASK basis,
costs reduced by 10.3% from EURc 0.04 to EURc 0.03.

On YTD basis, aircraft insurance has been decreased by 7.1% from EUR 2.1 million in
2006 to EUR 2.0 in 2007 and 18.7% on a cost per ASK basis from EURc 0.06 in 2006
to EURc 0.05 in 2007.

Administrative expenses

Administrative expenses have increased by 18.1% from EUR 6.0 million to EUR 7.1
million during the quarter. However, administration expenses have decreased by
25.2% on a YTD basis from EUR 17.8 million to EUR 13.3 million due to efforts taken
to control overheads. In addition, public offering related costs expensed in YTD 2006
were not incurred in 2007. Items included in this category are administrative costs,
professional fees and operational costs not included elsewhere. On a per ASK basis,
costs increased during the quarter by 11.8% from EURc 0.45 in 2006 to EUR 0.51 in
2007 and on a YTD basis have decreased by 34.5% from EUR 0.48 to EUR 0.31.

Depreciation and amortization

Depreciation relates to charges taken on depreciable fixed assets consisting of aircraft,
software, office equipment, and leasehold improvements. There was no significant
absolute change to depreciation and amortization expense during the period.

Base closure costs

Base closure costs represent severance payments made to employees impacted by the
Budapest and Krakow base closures. Certain other expense were also incurred in
relation to the base closure such as early contract termination penalties etc.




                                                    Q4 and preliminary FY 2007 financial results
Interest and other finance charges

Interest and other finance charges represents interest paid or payable by SkyEurope
offset by the revaluation of financial assets and liabilities. Finance charges relate
predominantly to accumulated interest expense on convertible bonds issued in
connection with the Company’s secondary public offering. The gain realized during the
quarter relates to unrealized foreign exchange gains on pre-delivery payment loans.

Income tax expense

Income tax expense represents the partial write down of the tax losses incurred in the
Hungarian entity as operations in the Hungarian branch ceased in October 2007 and
hence it is unlikely that the full amount of the tax losses will be recovered.



Balance sheet

Property, plant and equipment

Property, plant and equipment includes principally two Boeing 737-700 aircraft
delivered in July and August 2007, pre-delivery payments made to Boeing for aircraft
to be delivered in future periods which are not expected to be financed through sale
and leaseback transactions and other depreciable assets including software, office
equipment and leasehold improvements.

The net book value of property, plant and equipment increased from EUR 17.7 million
at 30 September 2006 to EUR 70.1 million at 30 September 2007 due to the addition
of the two aircraft as mentioned above and additional pre-delivery payments made to
Boeing during the period.

Deposits and other long-term receivables

Long-term receivables and other assets consist principally of deposits paid to lessors
for aircraft under operating lease and other long-term deposits paid to suppliers. The
deposits increased from EUR 8.3 million at 30 September 2006 to EUR 10.6 million at
30 September 2007 due to the delivery of new aircraft financed on operating lease.

Deferred tax assets

Deferred tax assets result primarily from the value of tax losses incurred in previous
years available for carry forward. The Company expects to generate sufficient taxable
income in the future in order to utilise the deferred tax assets recorded. The decrease
in the deferred tax asset from 30 September 2006 is due to the EUR 3.9 million write
down of the tax losses incurred in the Hungarian entity as operations in the Hungarian




                                                   Q4 and preliminary FY 2007 financial results
branch ceased in October 2007 and hence it is unlikely that the full amount of the
Hungarian tax losses will be recovered.

Trade and other receivables

Trade receivables represent receivables from credit card payments, tour operators,
outsourced sales desks at airports, lessors, and other miscellaneous receivables arising
in the normal course of operations. The increase in trade receivables from EUR 13.6
million at 30 September 2006 to EUR 20.4 million at 30 September 2007 is due to the
increase in our business activities and hence our trade receivables and an increase in
credit card retentions from our credit card acquirer.

Prepayments for aircraft for sale

Subsequent to year end, the Group entered into an agreement with a third party to sell
two aircraft scheduled to be delivered in October and November 2007 and therefore
have been recorded as short-term assets. Proceeds from the sale of the aircraft will be
used to pay down the drawn portion of the pre-delivery payment loan classified as the
current portion of Interest-bearing loans and borrowings. The aircraft sold were never
incorporated into the winter schedule as the timing of the deliveries were considered
suboptimal.

Prepaid expenses

In accordance with industry practices, we pay many suppliers such as fuel suppliers
and airports in advance and therefore we have a significant amount of prepaid
expenses. The prepaid expenses decreased from EUR 25.5 million at September 2006
to 8.4 million at 30 September 2007 due to an overall improvement in the
administrative processing of prepayments and related supplier invoices.

Cash and cash equivalents

Cash and cash equivalents has decreased from EUR 41.8 million at 30 September 2006
to EUR 11.6 million at 30 September 2007 due to net operating cash outflow during
the year; additional cash retentions held by our credit card provider; and a reduction in
advance fare bookings as we introduced a product more attractive to business
passengers who book closer to the date of the departure. The cash balance at 30
September 2006 included proceeds from a secondary public offering.

Cash flows from operating activities has improved significantly in comparison to the
prior year due primarily to improvements in net cash operating cash-ins driven by
better year to date performance.




                                                    Q4 and preliminary FY 2007 financial results
Interest-bearing loans and borrowings

Interest bearing loans and borrowings represent term loan financing of two Aircraft
and pre-delivery payment financing obtained from the Bank of Scotland Corporate for
nine aircraft to be delivered in 2007 through 2009. The increase is due to the term
loans drawn upon the delivery of the two Boeing 737-700 aircraft in July and August
2007.

Of a total of ten aircraft on firm order, pre-delivery payment financing has already
been committed by BOS for five aircraft. Financing commitments are sought for the
remaining orders.

The portion of interest-bearing loans and borrowings due within the next twelve
months has been classified as short-term. This includes the pre-delivery payment
financing of the two aircraft sold subsequent to year end and pre-delivery payments
for aircraft to be delivered in the next 12 months where term loan financing has not
yet been secured.

Convertible bonds

The amount recorded as convertible bonds at 30 September 2007 represents the
carrying value of the Tranche A convertible bond, net of the portion of the convertible
bond recognized directly in equity. The decrease from 30 September 2006 resulted
from the conversion of the Tranche B convertible bond which has been partially offset
by interest accrued on the Tranche A convertible bond.

Maintenance provisions

Maintenance provisions represent liabilities recorded for future maintenance expenses.
Amounts are classified as current if it is expected the future maintenance event will
occur within 12 months of the balance sheet date and non-current if longer than 12
months. The significant decrease from 30 September 2007 is due to the redelivery of
the Boeing Classic fleet and the related release of provisions against expenses
recorded during the period.

Unearned revenue

Unearned revenue represents advance ticket sales made and has increased from EUR
22.7 million at 30 September 2006 to EUR 25.7 million at 30 September 2007. The
marginal increase in unearned revenue versus the increase in seat capacity on sale for
the coming seasons is due to the expected shorter time period for advance ticket sales
resulting from our enhanced, convenient schedule aimed toward business passengers
who book closer to the date of departure.




                                                   Q4 and preliminary FY 2007 financial results
Trade and other payables

Trade and other payables represents trade debt owed to our suppliers that arise in the
normal course of business. The decrease from EUR 53.2 million at 30 September 2006
to EUR 43.6 million at 30 September 2007 is related to the decrease in prepaid
expenses as explained above.


Cash flow

Cash flow from operating activities

As a result of the reduced operating loss for the period and a higher number of
advance bookings, net cash outflow from operating activities improved and was EUR
27.1 million lower during the year ended 30 September 2007 versus 2006 (EUR 20.6
million better in Q4 2007 than in Q4 2006). This improvement was achieved despite a
significant increase in operating activities and additional retentions held by our credit
card acquirer.

Cash flows from investing and financing activities

Cash outflows from investing activities represent the purchase of two new aircraft in
July and August 2007, and pre-delivery payments made to Boeing for future aircraft
deliveries. Financing has been secured for these purchases and most pre-delivery
payments and therefore cash-in from financing activities is approximately equivalent to
the cash out from investing activities.




                                                    Q4 and preliminary FY 2007 financial results
CONDENSED CONSOLIDATED PRELIMINARY INCOME STATEMENTS

In thousands of EUR                                    30 Sept 2007   30 Sept 2006   30 Sept 2007   30 Sept 2006
(IFRS, unaudited)                                          3 months       3 months      12 months      12 months

Operating revenue
Scheduled revenue                                           75,196         52,757       208,204        157,164
Ancillary revenue                                            3,633          2,054        11,589          4,254
Charter revenue                                             10,086         17,987        16,384         23,939
                                                           88,915         72,798       236,177        185,358

Operating expenses
Aircraft fuel                                              (18,657)       (22,321)      (57,892)       (61,043)
Sales and marketing                                           (816)        (2,806)      (13,231)       (10,487)
Ground handling charges                                     (5,130)        (4,344)      (19,216)       (16,158)
Maintenance, material and repairs                            (1144)        (8,783)      (19,405)       (27,708)
Salaries, wages and benefits                                (7,579)        (5,944)      (25,992)       (22,412)
Navigation charges                                          (7,435)        (6,746)      (23,522)       (20,256)
Aircraft and passenger insurance                              (476)          (502)       (1,980)        (2,132)
Administrative expenses                                     (7,095)        (6,008)      (13,324)       (17,818)
Airport charges                                            (16,683)       (14,063)      (51,261)       (39,486)
Base c losure expense                                         (750)             -          (750)             -
                                                          (65,764)       (71,516)     (226,573)      (217,501)

EBITDAR*                                                   23,151          1,282          9,604        (32,143)

Depreciation and amortization                                 (752)          (723)        (1,488)        (1,547)
Aircraft rental                                             (8,075)        (7,138)       (29,029)       (21,788)

Operating income (loss) EBIT                               14,325         (6,580)       (20,913)       (55,477)

Other income (expenses)
Interest and other finance charges, net                      3,068           (534)           710         (2,603)

Income (loss) before income taxes                          17,393         (7,114)       (20,203)       (58,080)
Income tax (expense)/credit                                 (3,866)           (28)        (3,867)           788

Net income (loss) for the period after tax                 13,527         (7,142)       (24,070)       (57,292)

Weighted average number of ordinary shares at end of
period                                                  39,657,353     20,832,438     39,156,838     20,208,110
Basic and diluted income (loss) per share (EUR)               0.34          (0.34)         (0.61)         (2.84)
*Note: Earnings before interest, taxes, depreciation, amortization, share profit of associates
and lease     payments (excluding the maintenance reserve component of operating lease
payments). Maintenance reserve costs are charged to the costs heading “Maintenance, material
and repairs”.




                                                                Q4 and preliminary FY 2007 financial results
CONDENSED CONSOLIDATED PRELIMINARY BALANCE SHEETS


In thousands of EUR (IFRS)                   30 Sept 2007 30 Sept 2006
                                              (unaudited)     (audited)

Assets
Property, plant and equipment                     70,075       17,710
Deposits and other long-term receivables          10,562        8,336
Deferred tax assets                                6,238        9,251
Total non-current assets                         86,875       35,297

Expendable spare parts and inventories             1,158        1,119
Trade and other receivables                       20,397       13,555
Prepayments for aircraft                          21,310            -
Prepaid expenses                                   8,429       25,472
Cash and cash equivalents                         11,579       41,789
Total current assets                             62,873       81,935

Total assets                                    149,748      117,232



Equity
Issued capital                                    42,796       38,990
Share premium                                     84,148       81,293
Reserves - cash flow hedges                       (2,159)        (467)
Retained losses                                 (103,337)     (46,045)
Loss in current period                           (24,070)     (57,292)
Currency translation adjustment                     (116)        (110)
Total equity                                     (2,738)      16,369


Liabilities
Maintenance provisions                               215          125
Other non-current liabilities                         58           69
Interest - bearing loans and borrowings           45,599       10,876
Convertible bonds                                  5,314       10,245
Total non-current liabilities                    51,186       21,315

Interest - bearing loans and borrowings           31,051            -
Maintenance provisions - current                    ,799        3,644
Unearned revenue                                  25,646       22,673
Trade and other payables                          43,804       53,231
Total current liabilities                       101,300       79,548

Total equity and liabilities                    149,748      117,232




                                           Q4 and preliminary FY 2007 financial results
CONDENSED CONSOLIDATED PRELIMINARY CASH FLOW STATEMENTS

In thousands of EUR                                            30 Sept 2007    30 Sept 2006     30 Sept 2007       30 Sept 2006
(IFRS, unaudited)                                                  3 months        3 months        12 months          12 months

Net cash flow used in operating activities                           3,272          (17,343)           (20,787)         (47,873)
Net cash flow from investing activities                            (41,645)          (6,546)           (75,198)         (17,190)
Net cash flow from financing activities                             32,326           53,654             65,774           61,138



Net cash flows                                                     (6,048)          29,765           (30,210)           (3,925)

Cash and cash equivalents at beginning of period                    17,627           12,024             41,789           45,714
Cash and cash equivalents at end of period                          11,579           41,789             11,579           41,789




CONDENSED CONSOLIDATED PRELIMINARY STATEMENTS OF CHANGES IN
SHAREHOLDERS’ EQUITY


In thousands of EUR
                                                                             Cash flow
                                             Issued              Share         hedge      Retained      Translation
(IFRS, unaudited)                            capital            premium       reserve      losses         reserve       Total

At 1 October 2006                             38,990              81,293         (467)    (103,337)           (110)     16,369
Conversion of Tranche B convertible bond       3,806               2,855            -            -               -       6,661
Results from cash flow hedges taken to
equity                                                     -           -        (1,692)            -               -     (1,692)
Translation reserve                                        -           -             -             -              (6)        (6)
Loss for the period                                        -           -             -       (24,070)              -    (24,070)

At 30 September 2007                          42,796              84,148        (2,159)   (127,407)           (116)      (2,738)

At 1 October 2005                             20,000              59,819             -       (46,045)             24    33,798
Issue of capital and share premium from
secondary public offering                     18,990              12,717             -             -               -    31,707
Issue of convertible bonds                         -               8,757             -             -               -     8,757
Results from cash flow hedges taken to
equity                                                 -               -         (467)             -             -         (467)
Translation reserve                                    -               -            -              -          (134)        (134)
Loss for the period                                    -               -            -        (57,292)            -      (57,292)

At 30 September 2006                          38,990              81,293         (467)    (103,337)           (110)     16,369




                                                                          Q4 and preliminary FY 2007 financial results
SELECTED NOTES TO THE CONSOLIDATED PRELIMINARY FINANCIAL
STATEMENTS

1. Reporting Entity

SkyEurope Holding AG is a Group domiciled in Austria. The condensed consolidated
interim financial statements of the Group as at and for the year ended 30 September
2007 comprise the Group and its subsidiaries (together referred to as the "Group").

The consolidated financial statements of the Group as at and for the year ended 30
September 2007 will be available upon request from the Group's operational
headquarters at Ivanská cesta 26, P.O.Box 24, 820 01 Bratislava 21, Slovakia, or at
www.skyeurope.com on 10 January 2008.

2. Significant accounting policies

Except as described below, the accounting policies applied by the Group in these
condensed consolidated interim financial statements are the same as those applied by
the Group in its consolidated financial statements as at and for the year ended 30
September 2006.

a. Reclassification of income statement captions

For the year ended 30 September 2007, the Group has made the following
reclassifications within captions disclosed in the income statement:

   •   Surcharges and booking fees have been reclassified from ancillary revenues to
       scheduled revenue;

   •   Charter revenue previously classified as passenger revenue      has now been
       disclosed separately on the face of the income statement;

   •   Certain airport charges were netted against scheduled revenue in previous
       periods (against airport fee revenue classified within scheduled revenue) and
       have been reclassified to a new expense caption called “Airport Charges”;

   •   “Aircraft and traffic servicing” has been separated into additional income
       statement captions, “Ground handling charges, Aircraft insurance, and
       Navigation charges”;

   •   Payments made to lessors based on aircraft utilisation for future aircraft
       maintenance have been reclassified from “Aircraft rental” to “Maintenance,
       materials and repairs”.




                                                   Q4 and preliminary FY 2007 financial results
These changes have been made to comply with industry best practices and to allow
more meaningful benchmarking of revenues and costs vs other airlines. This change is
only a change in performance measures and does not have an impact on net income.

b. Reclassification of balance sheet captions

The Group has chosen to reclassify advance payments made to suppliers to “Prepaid
expenses” from “Accounts Receivable” as it better reflects the nature of the asset.

3. Contingencies

The Group has agreements with GECAS (GE Commercial Aviation Services) for the
operating lease of twelve Boeing 737s aircraft. In order to meet the lease conditions
for the aircraft, the Group must maintain certain liquidity and net worth thresholds.

At 30 September 2007, the Group failed to comply with these financial covenants for
six of the twelve leased aircraft and are currently negotiating a reduction in the
financial covenants with GECAS. An event of default allows GECAS to terminate the
leases with immediate effect and either claim damages and/or require immediate
redelivery of the aircraft. GECAS has indicated their intent to continually monitor
SkyEurope’s financial performance and has not indicated their intent to terminate the
leases.




                                                  Q4 and preliminary FY 2007 financial results
GLOSSARY

Administrative         Includes principally administrative costs and operational costs
expenses               not included elsewhere, including some salary expenses,
                       compensation paid to passengers and certain other items such
                       as the profit or loss on the disposal of fixed assets.
Aircraft rental        Aircraft rental includes the fixed monthly operating leasing
                       expense paid to the Company’s lessors (excluding maintenance
                       reserves).
Aircraft utilisation   Represents the average number of block hours per day per
                       aircraft operated during the relevant period.
Ancillary revenue      Ancillary revenue includes fees and charges (including credit
                       card surcharges, excess baggage charges, seat assignment
                       fees, sporting equipment charges, infant fees, change fees),
                       profit share from in-flight sales (including food, beverages, and
                       boutique items), cargo, and commissions received from
                       products and services sold (such as hotel bookings, car rental
                       bookings and travel insurance).
ASK                    Available seat kilometre is an indicator used by management to
                       measure units of productive output. It represents the seating
                       capacity of our aircraft multiplied by the number of kilometres
                       flown.
CASK                   Cost per available seat kilometre represents total operating
                       expenses divided by ASKs and management considers
                       movements in cost per available seat kilometre to be the best
                       indicator of management's performance in keeping unit costs
                       low.
EBIT                   Earnings before interest, taxes, depreciation, amortisation
EBITDAR                Earnings before interest, taxes, depreciation, amortisation,
                       and lease payments (excluding the maintenance reserve
                       component of operating lease payments). Maintenance reserve
                       costs are charged to the cost heading "maintenance".
Charter revenue        Charter revenue consists of aircraft capacity sold to third
                       parties or tour operators
Load Factor            Load factor represents the average percentage of aircraft
                       seating capacity that is actually utilised, calculated by dividing
                       revenue passenger kilometres by available seat kilometres.
Maintenance,           Maintenance, materials and repairs consists primarily of the
materials and          cost of routine maintenance and spare parts; provisions for the
repairs                estimated future cost of heavy maintenance and engine
                       overhauls on aircraft; and advance maintenance payments
                       made to operating lessors charged based on the number of
                       flight hours and cycles flown during the month.
RASK                   Revenue per available seat kilometre represents total
                       passenger revenue divided by ASKs and is considered by
                       management one of the best measures of revenue. It is a
                       compensating indicator between load factor and average
                       revenue per passenger.




                                                           Q4 and preliminary FY 2007 financial results
Sales and         Sales and marketing expenditures include marketing costs,
Marketing         fees paid to credit card providers, external call centres,
                  reservation system providers, and other sales and marketing
                  related costs.
Salaries, wages   Salaries wages and benefits include all crew, maintenance,
and benefits      sales and overhead salaries and related costs.


Segments          Represents the number of one-way revenue flights.


Scheduled revenue Scheduled revenue includes the base fare and booking
                  fees/surcharges net of any implied government taxes.

Q1 (Q2, Q3, Q4)   First (second, third, fourth) quarter of SkyEurope’s financial
                  year

Yield             Represents the passenger revenue divided by the number of
                  passengers carried.




                                                    Q4 and preliminary FY 2007 financial results

								
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