- Increase in adjusted EBIT from EUR 58 million to EUR 94 million
- High demand in Europe and strong passenger growth drive revenue increase
- CEO Kay Kratky expects a good but challenging year 2018
Austrian Airlines, Austria’s flag carrier, generated an adjusted EBIT of EUR 94 million in the 2017 financial year, comprising a rise of 62 percent from the prior-year level. EBIT, which for example includes book gains from aircraft sales, climbed 55 percent to EUR 101 million. The underlying reason for the good business results was in particular the increasing demand for European flights. A total of 12.9 million passengers flew with Austrian Airlines, or thirteen percent more than in 2016. “We are very pleased with this development”, says CFO Heinz Lachinger. “It represents the best results in our 60-year history, even if we still have a long way to go with respect to upcoming investments. We can take some pride in our performance when we look back at the difficult path we have put behind us.”
Business results in detail
Total operating revenues rose eight percent to EUR 2,466 million (see chart on the last page). The main reason for this development was the expansion of European flight traffic. This was complemented by income of EUR 7 million from sales of Fokker aircraft. In spite of a significant increase in the number of employees, operating expenditures only climbed by six percent to EUR 2,365 million. Despite political crises in the Middle East, Austrian Airlines succeeded in increasing adjusted EBIT, the most important indicator of economic success, by 62 percent or EUR 36 million to EUR 94 million. Earnings before interest and taxes (EBIT) climbed to EUR 101 million, a year-on-year rise of 55 percent or EUR 36 million.
Austrian Airlines invests in modern aircraft and its product offering
The integration of Embraer aircraft launched in 2016 as a replacement for Fokker jets was successfully concluded in 2017. A total of 17 Embraer aircraft were added to the fleet. Moreover, five additional Airbus A-320 aircraft were integrated into the Austrian Airlines fleet. One more Boeing 777 aircraft is scheduled to be deployed starting with the 2018 summer flight schedule.
Airbus fleet equipped with WLAN on board, new travel class as of March 2018
In 2017 all A320 aircraft were equipped with inflight connectivity. The “myAustrian Flynet” system enables passengers to use their own mobile end devices on board via WLAN. Furthermore, all Boeing long-haul aircraft were upgraded at a cost of about EUR 15 million to feature the new Premium Economy Class. The centerpiece of the new Premium Economy Class is a new seat offering greater comfort and more legroom compared to Economy Class.
1.5 million more passengers
The growth of the fleet and the improved product offering also positively impacts passenger volumes. In the period January to December 2017, Austrian Airlines transported 12.9 million passengers, a thirteen percent improvement year-on-year and a new passenger record. The flight offering in available seat kilometers climbed by seven percent. In spite of the conversion to larger aircraft (Embraer instead of Fokker jets), capacity utilization (passenger load factor) also improved to 76.8 percent, above the comparable figure of 76.1 percent in the previous year. In 2017, Austrian Airlines operated a total of 143,999 flights using 83 aircraft, or an average of 395 flights per day. The regularity of operation was 98.6 percent, whereas the punctuality rate on arrival equaled 83.2 percent
Austrian Airlines is growing
The total staff of the Austrian Airlines Group amounted to 6,914 employees as at the balance sheet date of December 31, 2017 (2016: 6.450 employees). This substantial increase of 464 employees representing a rise of seven percent is mainly related to the hiring of new pilots and flight attendants.
Outlook: Planned investments and expansion
Austrian Airlines already began to expand its flight service to tourist destinations in 2016. In 2017, it added the destinations of Los Angeles, Gothenburg, Seychelles and Shiraz (Iran), and will inaugurate flight service to Tokyo and Cape Town in South Africa in 2018. Austrian Airlines expects a challenging year in 2018 due to the predicted rise in jet fuel prices and ongoing investments in aircraft and product improvements. “We are strongly investing in our product offering and expanding the fleet in 2018”, comments CEO Kay Kratky. “Combined with a tougher competitive environment once again at the present time, we anticipate an adjusted EBIT slightly below the comparable level of 2017.”