Results for the first quarter of 2020: Coronavirus Crisis Leads to High Quarterly Loss of Austrian Airlines

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  • Revenue decline of 24 percent in the first quarter of 2020
  • Strong year-on-year drop in passenger volume of 27 percent
  • Adjusted EBIT down from minus EUR 99 million to minus EUR 136 million

The Austrian Airlines fleet has been grounded since March 19, 2020 as a consequence of the pandemic. Beforehand, the flight schedule for China and later for Europe had to be drastically slashed due to the spread of the coronavirus. Even though the far greater impact will be felt in the second quarter of this year, the corona-related development is also reflected in the financial figures for the first quarter: Revenue and passenger volume of the airline were both down by about one-quarter compared to the prior-year period. In turn, this led to adjusted earnings before interest and taxes (adjusted EBIT) of minus EUR 136 million in the first quarter of 2020.

“The pandemic hit our company with full force”, states Austrian Airlines CFO Wolfgang Jani, commenting on developments. This blow is also reflected in our earnings. We will likely see the full effects in the coming months. However, it is already obvious today that it will take years for us to weather the crisis”, he adds.

Austrian Airlines carried 1.9 million passengers in the first three months of the current year, comprising a decline of 27 percent from the comparable period of 2019. The flight offering in available seat kilometers had to be reduced by 19 percent to 4.5 billion. Capacity utilization (passenger load factor) fell to 68.2 percent due to the crisis. Many passengers actually did not travel despite valid flight bookings.

The regularity of operation, an indicator with little significance at the present time in light of the coronavirus crisis, was down to 95.2 percent in the first quarter of 2020. The punctuality rate on departure could be improved to 88.1 percent, whereas the punctuality rate on arrival rose to 88.6 percent. Austrian Airlines operated a total of 22,727 flights during this period, or a good 253 flights per day.

First-quarter revenue fell by 24 percent to EUR 287 million, and total operating revenue also decreased by 24 percent to EUR 304 million. Various measures did succeed in substantially reducing costs, but not to the same extent as the drop in revenue. Operating expenditures were down twelve percent to EUR 440 million. Earnings expressed as adjusted EBIT (adjusted earnings before interest and taxes) equaled minus EUR 136 million, comprising a decline of 37 percent from the previous year (Q1 2019: minus EUR 99 million). EBIT plummeted to minus EUR 197 million. The deviation between the adjusted EBIT and EBIT can be attributed to a revaluation of the aircraft fleet. (Refer to the chart on the last page for details.)

The total staff of Austrian Airlines amounted to 6,943 employees as at the balance sheet date of March 31, 2020 (March 31, 2019: 7,061 employees).

Outlook for 2020

Austrian Airlines will resume flight operations on June 15, 2020, but initially at a lower-than-normal capacity. The airline anticipates a pandemic-related reduction of the flight offering to about 25-50 percent of its usual production. “Of course, earnings will also enormously suffer. We are just in the process of reducing the foreseeable loss for the year as much as possible by taking suitable countermeasures”, CFO Wolfgang Jani concludes.