Austrian Airlines has reported its financial results for the first half of 2019:
• Adjusted EBIT down to minus EUR 53 million in the first half-year
• 2019 remains a challenging year: glut of budget airlines and expensive jet fuel burden earnings
“The sharp decline in earnings can be mainly attributed to two factors: the glut of budget airlines in Vienna and higher jet fuel costs”, states Austrian Airlines CFO Wolfgang Jani.
Revenue in the first half of 2019 fell by three percent to EUR 982 million (H1 2018: EUR 1,008 million). Total operating expenditures in the same period were up two percent to EUR 1,073 million (H1 2018: EUR 1,048 million). The main reason for the higher costs were the additional expenses for jet fuel and routine maintenance. Jet fuel costs rose by 17 percent or EUR 34 million whereas technical expenditures were up 47 percent or EUR 27 million. Adjusted EBIT, which deducts book gains from sales of aircraft, amongst other items, totaled minus EUR 53 million (H1 2018: EUR 5 million). EBIT in the first six months of 2019 equaled minus EUR 54 million.
Considering the second quarter by itself, adjusted EBIT totaled EUR 46 million, down 41 percent or EUR 32 million from the previous year (Q2 2018: EUR 78 million). Accordingly, the large first-quarter loss could not be offset.
More flights, more passengers, high capacity utilization
The regularity of operation rose to a gratifying 99.0 percent in the first half of 2019 (H1 2018: 98.1 percent). However, punctuality on departure fell to 76.9 percent. This can be primarily attributed to air traffic control problems at Vienna Airport, which have quadrupled compared to the first half-year 2018. The punctuality rate on arrival equaled 79.9 percent.
Fleet renewal takes shape: six additional jets, turboprop phase-out
“The expansion of our Airbus fleet will help us in competing with budget airlines. This is because these jets enhance customer comfort. The change in the fleet structure will also positively impact our unit costs because we can offer more seats in fewer aircraft”, says Austrian Airlines CFO Wolfgang Jani.
The total staff of Austrian Airlines amounted to 6,999 employees at the balance sheet date of June 30, 2019 (June 30, 2018: 7,118 employees). The reduction of 119 employees (minus two percent) is related to productivity gains in connection with the last reform of the collective wage agreement and the fact that fewer pilots are undergoing retraining.
Outlook for the entire year 2019: positive earnings but significantly below the prior year