• Operating result in the first half of 2021 still clearly negative due to the pandemic
• Summer tourism and restructuring measures stabilize liquidity
• CEO Alexis von Hoensbroech: “Increasing booking numbers in summer give us some breathing space, but the crisis does not allow for a sigh of relief”
The corona pandemic, which has now been going on for a year and a half, continues to have a drastic effect on Austrian Airlines’ corporate results. At the end of the second quarter of 2021, the red-white-red airline was only able to offer around 55 percent of its pre-crisis capacity and therefore generated adjusted earnings before interest and taxes (adjusted EBIT) of -95 million euros. Adjusted EBIT for the first half of the year was -201 million euros compared to -235 million euros in the same period of the previous year (+ 14%). Compared to the first half of 2020, during which the pandemic had its beginning, the number of passengers fell by 44 percent to just under 1.1 million – compared with 2019 this accounts for a decrease of 83 percent.
“Virus variants, the travel restrictions often associated with them, and low demand for long-distance and business travel are clearly slowing down the recovery of the aviation industry. The increasing number of bookings in summer gives us some breathing space, but the crisis does not allow us to breathe a sigh of relief,” says Austrian Airlines CEO Alexis von Hoensbroech on the presentation of the company figures for the first half of 2021.
The results in detail
In the second quarter of 2021, Austrian Airlines’ revenue was 126 million euros, 260 percent higher than in the same quarter of the previous year, which was narrowed down to practically only two weeks of minimal operation in June (Q2 2020: 35 million euros). Compared to the second quarter of 2019, however, the decline in revenue was 79 percent. At 136 million euros, the total operating revenue was 131 percent higher compared to the previous year (Q2 2020: 59 million euros, Q2 2019: 616 million euros). The ramp-up of flight operations at the beginning of summer led to total expenses of 231 million euros, 46 percent higher than in the same quarter of the previous year (Q2 2020: 158 million euros, Q2 2019: 571 million euros). In the second quarter of the year, the adjusted EBIT was therefore EUR -95 million (Q2 2020: EUR -99 million, Q2 2019: EUR 46 million).
In the first half of 2021, the total revenue fell by 45 percent to 201 million euros (1st half of 2020: 363 million euros), or by 80 percent compared to the first half of 2019, while operating expenses in the same period were reduced by 33 percent to 402 million euros (1st half of 2020: 598 million euros, 1st half of 2019: 1,073 million euros). The adjusted EBIT in the first half of the 2021 financial year was thus -201 million euros and was thus 14 percent higher than that of the first half of 2020 (-235 million euros), but 279 percent lower than in the first half of 2019 (- 53 million euros). In comparison, the number of employees at Austrian Airlines decreased by 9 percent to 6,132 employees (1st half of 2020: 6,756, 1st half of 2019: 6,999). In order to successfully rise from the crisis, the company has to be around 20 percent smaller, which is one of the reasons why a total of 1,350 full-time positions have to be cut compared to the pre-crisis level. Around 850 of these have already been achieved through natural turnover.
The low occupancy of flights in the first quarter of 2021 is also reflected in the number of passengers. Due to strict travel restrictions and a low number of flights at the beginning of the year, the number of passengers fell in the first half of the year by 44 percent to 1.1 million (1st half of 2020: 2.0 million, 1st half of 2019: 6.7 million). The available seat kilometers amounted to 2.9 billion and were thus 37 percent below those of the same period of the previous year (1st half of 2020: 4.6 billion, 1st half of 2019: 13.6 billion). The domestic airline’s flights were booked at a capacity of 53.1 percent in the first half of 2021 (first half of 2020: 68.1 percent, first half of 2019: 78.1 percent). The red-white-red airline’s fleet was reduced to 73 aircraft in comparison to mid-2020 (first half of 2020: 85). The retirement of the Dash aircraft from the Austrian Airlines fleet portfolio made up a large part of the phased out planes.
Return to diverse destination network and stable liquidity situation
In order to meet the increased demand in the tourist segment on short and medium-haul routes, Austrian Airlines has gradually increased the variety of destinations in the summer flight schedule of 2021 to over 100 destinations. Increasing incoming bookings towards the end of the first half of the year, the subsidies for short-time working and the effective modernization measures ensure a stable liquidity situation that keeps the company on course. “Unfortunately, there is still no end to the pandemic in sight. However, our high adaptability and the consistent implementation of restructuring measures show that it is possible to successfully get the company through the crisis,” comments Austrian Airlines CEO Alexis von Hoensbroech. The ruling of the European General Court (EGC) announced on 14 June is also encouraging. The EGC dismissed the lawsuit by Ryanair and Laudamotion against the state aid for Austrian Airlines and declared that the aid of the Republic of Austria in the amount of 150 million euros is in conformity with EU law.
Outlook for the full year of 2021
The comparison with the pre-crisis year of 2019 shows that the company is still far from a normal situation despite the recent increase in demand. The uncertainty about the further course of the ongoing pandemic also make it difficult to forecast the return of business and long-distance travel. However, it is to be expected that the effects of the pandemic will remain clearly noticeable well into 2022 or longer. Existing uncertainties, which are also reflected in the short-term booking behavior of passengers, will also impact the annual result.
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