• Adjusted EBIT declines from EUR 19 million to minus EUR 319 million
• Standstill in flight operations leads to 79 percent passenger decline vs. 2019
• CEO von Hoensbroech: “’Green Pass’ should give the green light for travelling in the summer of 2021”

The coronavirus crisis and the three-month standstill in flight operations have pushed the annual results of Austrian Airlines for 2020 deep into the red. The country’s national airline reported a loss of minus EUR 319 million in the coronavirus year. In comparison, Austrian Airlines still generated a profit in 2019, reporting an adjusted EBIT of EUR 19 million. The 79 percent pandemic-related decrease in the number of passengers flying with the red-white-red flag carrier to 3.1 million passengers abruptly halted the steep growth of passenger volume.

“Naturally, the standstill in flight operations in 2020 also led to a standstill in our accounts. This crisis which we were sucked into through no fault of our own catapulted us from a financially stable situation to the most challenging time in the history of aviation. We would not be able to survive this crisis without loans, government aid and support in the form of contributions made by employees, suppliers and system partners”, explains Austrian Airlines CEO Alexis von Hoensbroech.

All results in detail

The path back to normality will remain a difficult one for Austrian Airlines. When flight operations were resumed in mid-June 2020 after an interruption of 100 days, bookings increased rapidly and the flight offering quickly rose to 30 percent of normal levels. However, Austria’s national carrier was once again given the red card by the pandemic in September of last year. The growth in infection rates as well as many new travel restrictions and renewed lockdowns thwarted the upward development of Austrian Airlines and the entire aviation sector.

For this reason, revenue of Austria’s flag carrier in the entire year 2020 fell by 78 percent to EUR 460 million, down from EUR 2,108 million in 2019. Total operating revenue in 2020 was down 69 percent to EUR 672 million compared to EUR 2,181 million in the previous year. Total operating revenue in 2020 includes EUR 150 million in emergency aid granted by the Austrian Federal Government to help the airline overcome the coronavirus crisis. In the same period, total operating expenditures were reduced by 54 percent to EUR 991 million from the prior-year level of EUR 2,164 million. In addition to short time work, the deferred payment of taxes and duties also provided rapid relief on the cash side. The average liquidity outflow of the red-white-red airline could be reduced from EUR 1-2 million to most recently only EUR 0.5 to 1 million per day thanks to the implementation of far-reaching cost-cutting measures. Accordingly, the level of liquidity remains above the business plan in spite of the shrinkage in flight operations. The adjusted EBIT, which does not include valuation gains or losses from aircraft sales, equalled minus EUR 319 million in 2020. However, this includes recognizing the EUR 150 million in emergency aid as a special effect. Excluding this effect, EBIT in 2020 would have amounted to minus EUR 469 million. The (unadjusted) EBIT for the entire year 2020 amounted to an historic loss of minus EUR 379 million.

Revenue in the fourth quarter months of October to December 2020 slumped by 91 percent to EUR 46 million from EUR 496 million in 2019. In this period, total operating revenue fell by 59 percent to EUR 207 million compared to EUR 503 million in Q4 2019 but includes the EUR 150 million in emergency aid which was recognized in the month of December. Fourth-quarter 2020 operating expenditures fell by 63 percent to EUR 185 million from EUR 503 million in the prior-year quarter. As a result of the emergency aid, the adjusted EBIT for the period October-December amounted to EUR 22 million, above the comparable figure of EUR 1 million in the fourth quarter of 2019. Excluding the emergency aid, the adjusted EBIT in Q4 2020 would have been -€128 million.

The total staff of Austrian Airlines amounted to 6,443 employees on the balance sheet date of December 31, 2020 (December 31, 2019: 6,989 employees). This corresponds to a decline of eight percent or about 550 employees, which was achieved through natural attrition, not filling vacant positions and the expiry of limited term employment contracts.

Structural measures implemented and further steps under review

The focus of the red-white-red airline will continue to be on safeguarding liquidity in the short term through stringent cost reduction efforts and ensuring the ability to pay back the state guaranteed loans in the long term. In this regard, the airline is currently reviewing to see which additional measures are required for this purpose and whether any of the approximately 60 aircraft which will still be in operation after the crisis should be taken out of service in the long run. Several structural adjustments have also been carried out over the past few months. For example, the airline has pressed ahead with the announced shutdown of the Austria Technik bases and passenger handling in several Austrian federal provinces. With respect to passenger handling, the stations in Salzburg and Klagenfurt were closed. Aircraft maintenance and repair operations were terminated at the technical stations in Graz, Linz, Salzburg and Klagenfurt in December 2020 or January 2021 and the bases were disbanded. The affected 42 technicians were given job offers to transfer to Vienna.

In addition, Austrian Airlines is moving ahead with its fleet redimensioning drive and the majority of Dash aircraft could be retired. Recently, the airline also succeeded in selling the three oldest B767 long-haul jets. The sale of seven A319 aircraft is still in planning. A large portion of the sales proceeds will go directly to pay back the state guaranteed loans.

A glance at passenger development and capacity utilization

The overall situation of the aviation sector can be measured by the particularly drastic decline in passenger traffic. In 2020, the number of passengers flying with Austrian Airlines was down by 79 percent. In absolute figures, 3.1 million passengers were transported by the airline in all of 2020, down from 14.6 million in 2019. The flight offering in available seat kilometers (ASK) fell by 75 percent to 7.1 million compared to 28.5 million in the prior year. Capacity utilization in 2020 equalled 61.9 percent, comprising a decline of 18.9 percentage points from 80.8 percent in 2019. At present, the average capacity utilization has been about 55 percent since the beginning of 2021.

“In 2021 we must succeed in welcoming a significantly higher number of passengers on board our flights once again and thus slowly and patiently tread the path back towards a renewed freedom to travel. It is a fact that the desire to travel already exists now”, states CEO von Hoensbroech. In this connection, the airline continues to advocate unified entry regulations, at least within the European Union.

Planning for the summer season of 2021 under difficult conditions

Austrian Airlines has continuously emphasized the fact that the summer of 2021 will be decisive in determining the continuing existence of the red-white-red airline. “We are already witnessing initial positive trends in bookings for this year’s holiday season”, explains CCO Michael Trestl. “This makes me cautiously optimistic. Nevertheless, we will have to prepare countermeasures as well”, he adds. Flight operations in this year’s peak season should equal between 50 and 70 percent of the pre-crisis level. “We assume that certain catch-up effects could already be seen in the summer of 2021 with respect to our holiday flight program. This is precisely why the flight offering was correspondingly expanded”. Due to the dynamic developments, the flight schedule is being continuously reviewed and will be adjusted if required.

Freedom of travel with a health pass

“The decision to introduce a digital health pass, such as the ‘Green Pass’ advocated by Austrian Federal Chancellor Kurz, should be made sooner rather than later”, says Austrian Airlines CEO von Hoensbroech. In cooperation with Vienna Airport, the airline already demonstrated last year how easy a testing concept for travelers can be implemented. Austria’s national airline assumes that a two-fold strategy consisting of vaccinations and testing will exist in any case for a while due to the slow vaccination rate, and that many countries will specify negative test results or a vaccination certificate as the basis for entry. “A European-wide health pass will be the door opener for the 2021 summer season. This has to be a digital pass and internationally recognized. Of course, a unified worldwide solution would be even better”, the Austrian Airlines CEO concludes.

Overview of Key Facts and Figures