Thursday, November 5, 2020 — In the first three quarters of the year, Brussels Airlines recorded a loss of EUR 233 million, due to the unprecedented impact of the coronavirus on travel demand. Revenue fell by 70% to EUR 339 million compared to last year. Brussels Airlines transported 73% fewer passengers between January and September and the seat load factor dropped by 11.4 percentage points to 70.6%. Next to the structural review of its overall cost position, Brussels Airlines accelerates the implementation of its restructuring programme Reboot Plus through various short- and long term measures to reduce variable and fixed costs to counter the effects of the coronavirus crisis.
The coronavirus has a dramatic impact on aviation worldwide. Brussels Airlines adjusted its flight schedule to the collapsed travel demand and the different travel restrictions, leading to a twelve-week flight suspension in spring and a reduced flight schedule during summer. The airline resumed its flight operations to Africa in July, re-establishing the important travel link between Europe and the African continent.
After the restart in June, the summer months were stronger than anticipated, with leisure demand picking up. This led to an increased offer to touristic destinations in July and August. Due to the rapidly changing travel restrictions and demand, however, Brussels Airlines needed to adapt its flight capacity in the most flexible way after the summer, to make sure that the capacity offered is as close as possible to the market demand in order to safeguard its cash position. Thanks to this very proactive and restrictive capacity management, Brussels Airlines was able to maintain cash-positive flight operations every week since its restart on 15 June.
As a result of the collapse of demand and capacity, the airline reports an Adjusted EBIT of EUR -233 million for the first nine months of the financial year (previous year: EUR 1 million). The EBIT reached EUR -256 million (previous year: EUR 0 million). The difference with the Adjusted EBIT stems mainly from write-downs of EUR 23 million on right-of-use assets for two Airbus A330-200 and eight Airbus A319 for the necessary fleet resizing.
Revenues were down by 70%, from EUR 1.137 million to EUR 339 million. Brussels Airlines transported 2,107,954 passengers between January and September, compared to 7,905,953 last year (-73%). 18,757 flights have been operated, a 70% decline compared to the 62,683 flights in the first three quarters of 2019. The seat load factor dropped 11.4 percentage points from 82% to 70.6%. Operating expenses decreased by 49% to EUR 607 million, primarily due to the volume-related decline in the cost of materials and services.
The coronavirus outbreak urged Brussels Airlines to intensify and accelerate its existing turnaround programme, which was launched in the third quarter of 2019 and which will now be implemented for 90% by the end of 2020. Following the adaptation of its network, the new plan Reboot Plus will reduce the fleet by 30% and the workforce by 25%. The turnaround programme, which has been agreed upon with the social partners and is in full implementation, will create the basis for a sustainable future for the company. At the end of September 2020, the number of employees already dropped by 14% compared to 2019.
Due to the still volatile and highly unpredictable situation worldwide, it is not possible to make any forecast for 2020 as a whole.
“We continue to focus on the timely implementation of our Reboot Plus plan in 2020, in order to start 2021 as a leaner Brussels Airlines. On the commercial side, contrary to many European competitors, we will continue our strict capacity management to ensure cash-positive operations. As travel restrictions, quarantines and complexity continue to put a heavy burden on travel demand, we plead for a Europe-wide approach for travel regulations in combination with a comprehensive quick testing approach as part of the travel journey. As a first step in this direction, we are working on trials with rapid COVID-19 antigen tests soon on specific flights.”
Dieter Vranckx, CEO Brussels Airlines
If you have any questions about these results, Brussels Airlines CEO Dieter Vranckx and CFO Nina Oewerdieck will be available during a Zoom session at 12h30 this afternoon.