Press Release: Airblue Shows Record Operating Profit

Karachi, December 20, 2006:
Airblue, Pakistan’s 'New Generation Airline', has become the fastest growing private sector carrier by showing a record operating profit of over Rs 150 million while providing a high quality product to the consumers.

Airblue started with three Airbus A320 aircraft in its fleet at the launch of the operation on June 18, 2004. Two A321 aircraft were added to the fleet in February 2006. With the induction of the 6th Aircraft, airblue has doubled its fleet and has more than doubled its capacity. The airline has posted a significant increase in its operating profit from posting a loss of Rs 27 million in 2005 to a profit Rs 242 million in 2006.

Airblue also introduced latest technology in Pakistan by introducing e-ticketing,wireless checkin and self checkin kiosks at different airports in Pakistan. The airblue aircraft are the latest fly-by-wire technology Airbus A320's and A321's. This allows the airline more flexibility and scales of economy in crew planning and maintenance capability, adding directly to bottom-line profitability.

According to a copy of airblue's audited accounts, the airline posted a net revenue increase of 162 percent. An exceptional performance was witnessed in the short term financing which was reduced from Rs 206 million to Rs 48 million, showing a decrease of 330 percent.

KPMG Taseer Hadi & Co audited airblue's balance sheet for the year as of June 30, 2006, as well as the related profit and loss account, cash flow statement, statement of changes in equity, and the notes forming parts thereof.

During this period, the company successfully managed to achieve the following from internal revenue generation without resort to any external borrowing:

• Substained fuel price increase of over 50 percent;
• Obtained two Airbus A321 aircraft on dry lease;
• Operated one wet lease A321 aircraft for five months;
• Supported LOI for purchase of six A320 aircraft with Airbus Industries;
• Added more domestic destinations and frequencies
• Started international operations to Dubai from Karachi; and
• Extended international operations to Dubai from Lahore, Islamabad and Peshawar.

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