Published on : Thursday, November 7, 2019
Austrian Airlines achieved the break-even point after the summer. Austria’s national carrier reported adjusted earnings before interest and taxes (adjusted EBIT) of EUR 17 million for the first three quarters of 2019. However, this comprises a drastic decrease in earnings of 85 percent or EUR 93 million compared to the prior-year period (Q1-3 2018: EUR 110 million). Investments in the fleet and service had a positive impact, as reflected in the six percent rise in passenger volume to a total of 11.2 million.
“We succeeded in attracting additional customers in despite of the competition from low-cost airlines”, states Austrian Airlines CFO Wolfgang Jani. “However, the glut of budget airlines in Vienna and higher jet fuel costs intensify pressure on ticket prices and thus on our earnings”, he adds.
Revenue in the first three quarters of 2019 fell by two percent to EUR 1,696 million (Q1-3 2018: EUR 1,729 million) in spite of passenger growth. Total operating expenditures rose by four percent to EUR 1,679 million in the same period (Q1-3 2018: EUR 1,620 million). The main reasons for the higher costs were the additional expenses for jet fuel and routine maintenance. Jet fuel costs rose by 14 percent or EUR 47 million during the first nine months of the current financial year. Adjusted EBIT, which deducts book gains from aircraft sales, amongst other items, totaled EUR 17 million (Q1-3 2018: EUR 110 million). EBIT in the first three quarters of 2019 equaled EUR 14 million.
Considering the third quarter of 2019 by itself, adjusted EBIT amounted to EUR 70 million, a drop of 33 percent from the prior-year quarter (Q1-3 2018: EUR 105 million).
More flights, more passengers, higher capacity utilization
Austrian Airlines significantly expanded its traffic volume. In the first nine months, the airline transported 11.2 million passengers, comprising a year-on-year increase of six percent or about 600,000 passengers. The intercontinental business developed exceptionally well, with passenger volume up by about seven percent. The flight offering in available seat kilometers (ASK) throughout the entire Austrian Airlines route network increased by three percent. Seat kilometers sold rose by five percent compared to the first nine months of 2018. Capacity utilization (passenger load factor) equaled 81.2 percent, a rise of 1.6 percentage points from the previous year. The number of flights operated by Austrian Airlines rose by four percent to a total of 106,165 since the beginning of the year.
The regularity of operation in the first three quarters of 2019 rose to a gratifying level of 99.0 percent (Q1-3 2018: 97.8 percent). Punctuality on departure and punctuality on arrival could both be slightly improved to 75.0 percent and 79.2 percent respectively.
The total staff of Austrian Airlines amounted to 7,038 employees at the balance sheet date of September 30, 2019 (September 30, 2018: 7,104 employees). The reduction of 66 employees (minus one percent) is mainly related to the upgrading of the Austrian Airlines fleet.
Downward revision of forecast for the entire year 2019: a loss cannot be excluded
Due to the strong competition from low-cost carriers, Austrian Airlines expects the entire year 2019 to be an economically difficult period. “We will once again fight for quality and customers in the fourth quarter but cannot rule out the possibility of reporting a loss for the entire 2019 financial year”, Austrian Airlines CFO Wolfgang Jani says. In 2018 Austrian Airlines still generated an adjusted EBIT of EUR 83 million.
Editor’s note: The Process Efficiency program “PE20”, part of the #DriveTo25 strategy, is designed to reduce material and staff costs. It will be presented today at the press conference scheduled for 11:30 a.m. This program should help Austrian Airlines achieve cost savings of EUR 90 million annually by the end of 2021.
Source:- Austrian Airlines
Tags: Austrian Airlines