• Adjusted EBIT down from EUR 83 Million to EUR 19 million
• Cost reductions are making an impact: eight percent drop in expenses in Q4 2019
• Coronavirus: Most serious crisis in aviation history
• Austrian Airlines plans comeback, but the precise time is not yet predictable

Austrian Airlines generated an adjusted EBIT of EUR 19 million in the 2019 financial year in spite of tough competition and extensive surplus capacities at Vienna Airport. This was in comparison to a contrast of EUR 83 million in 2018. 14.7 million passengers flew with Austria’s flag carrier in the past year, more than ever before, despite the intensively competitive environment. Austrian Airlines expects a very challenging year in 2020. The coronavirus has caused the most serious crisis in aviation history.

“We succeeded in achieving positive results despite tough competition. This was the consequence of implementing massive cost reductions,” says Austrian Airlines CFO Wolfgang Jani.

Business results in detail

Revenue fell by two percent to EUR 2,108 million, similarly to total operating revenue, which also declined by two percent to EUR 2,181 million. Operating expenditures only rose by one percent to EUR 2,164 million although jet fuel costs climbed by twelve percent or EUR 52 million to EUR 494 million. Expenditures could be reduced in the course of the year thanks to a program designed to safeguard earnings and fell by eight percent in the fourth quarter alone (refer to attached chart).

The adjusted earnings before interest and taxes (adjusted EBIT), the most important performance indicator in the Lufthansa Group, fell by 77 percent or EUR 64 million to EUR 19 million in 2019. Accordingly, the adjusted EBIT margin was down from 3.8 percent to 0.9 percent. Earnings before interest and taxes (EBIT), which also includes book gains from sales of aircraft or aircraft parts, decreased by 84 percent or EUR 76 million, from EUR 91 million in 2018 to EUR 15 million in 2019.

About 700,000 more passengers

In the year 2019, Austrian Airlines transported a total of 14.7 million passengers, which comprises a new passenger record once again since the airline was founded in 1957. Approx. 700,000 more people flew with Austrian Airlines in 2019, a rise of five percent. The flight offering in available seat kilometers (ASK) climbed by three percent. Nevertheless, the airline succeeded in more effectively marketing the expanded offering. Capacity utilization (passenger load factor) clearly improved from 79.3 percent in 2018 to 80.8 percent in 2019, the highest level ever achieved in the company’s history.

“The passenger volume shows that our product is well received. Customers are remaining loyal to us, and capacity management is working very well”, states Austrian Airlines CCO Andreas Otto.

In 2019, Austrian Airlines operated a total of 139,230 flights using 82 aircraft, or an average of about 380 flights per day. The regularity of operation in 2019 was up one percentage point to a gratifying 99.0 percent, whereas the punctuality rate on arrival equaled 80.6 percent, representing an improvement of 1.5 percentage points from the prior-year performance.

The total staff of the Austrian Airlines Group amounted to 6,989 employees as at the balance sheet date of December 31, 2019 (2018: 7,083 employees). The decline of one percent or about 100 employees is mainly the result of natural attrition or not filling vacant positions.

The #DriveTo25 strategy program announced in January 2019 remains in effect in spite of the coronavirus crisis. In short, the initiative is designed to achieve a state of investment readiness. This ability to carry out investments means the company is capable of making the necessary investments on its own.

Effects of the coronavirus and outlook for 2020

The spread of the coronavirus since January 2020 is having a significant effect on the company’s business development in the year 2020. The coronavirus has led to a large number of travel restrictions on companies, the cancellation of large-scale events and a high level of uncertainty. Countries are successively imposing entry restrictions, including China, Israel, Italy, Austria and most recently the entire European Union.

In turn, these restrictions are having a massive impact. Throughout Europe, airlines are cutting back on their flight schedules or even completely grounding their entire fleets. Effective today, Austrian Airlines has cancelled all its regular flight operations, as previously announced. It is currently only carrying out emergency or relief flights, especially to facilitate evacuation efforts on behalf of the Federal Ministry of European and International Affairs.

“We are working closely together with the Federal Ministry of European and International Affairs and have pledged our full support. We are ready to carry out the biggest program in Austrian history to bring people back to Austria”, explains Austrian Airlines CEO Alexis von Hoensbroech.

Outlook 2020:

On balance, Austrian Airlines expects an extraordinarily difficult year in 2020. The effects of the coronavirus are still not fully foreseeable, neither on society nor on the economy. From today’s perspective, it is still too early to say when regular flight operations will be resumed. “The aviation sector is in an unprecedented crisis in its history. The coronavirus and its consequences will severely test us”, says Austrian Airlines CEO Alexis von Hoensbroech. “Not all the airlines will survive this crisis. Austrian Airlines is better positioned than many other carriers. For this reason, we will emerge strengthened from this crisis. Who else if not us!?“