Coronavirus crisis puts pressure on Austrian Airlines’ Q2 results

• 2nd quarter 2020: Adjusted EBIT down to minus EUR 99 million
• CFO Wolfgang Jani: “The crisis hit us with full force”
• Landing bans have hampered satisfactory development

As a result of the coronavirus crisis and the cessation of Austrian Airlines‘ flight operations for a period of close to three months, Austria’s national carrier generated adjusted earnings before interest and taxes (adjusted EBIT) of minus EUR 99 million in the second quarter of 2020, down from positive results of EUR 46 million in the prior-year quarter. Accordingly, the adjusted EBIT for the first half of 2020 equalled minus EUR 235 million. The number of passengers carried by Austrian Airlines fell by 70 percent to around 2 million due to the pandemic.

“The coronavirus crisis has hit the airline sector with full force. Worldwide travel restrictions almost completely brought flight operations to a standstill in the second quarter. Our business is slowly recovering since the resumption of flights on June 15”, explains Austrian Airlines CFO Wolfgang Jani.

Results in detail

With the exception of humanitarian cargo flights, the second quarter consisted of practically only two weeks of minimum operations in June. Whereas in the previous year the airline carried around four million passengers between April and June, this figure was only 53,000 in 2020. Revenue slumped by 94 percent to EUR 35 million. During the same period, total revenues fell by 90 percent to EUR 59 million (Q2 2019: EUR 610 million). Total expenses for the same period amounted to EUR 158 million, a decrease of 72 percent (Q2 2019: EUR 565 million) compared with the same quarter of the previous year. Adjusted EBIT ultimately amounted to EUR -99 million in the second quarter (Q2 2019: EUR 46 million).

In the first half of 2020, sales revenues fell by 67 percent to EUR 322 million (first half of 2019: EUR 973 million). In the same period, operating expenses fell by 44 per cent to EUR 598 million (first half of 2019: EUR 1,064 million). This was counteracted by a package of short-term cost-cutting measures and short-time working for the entire workforce. Adjusted EBIT, which excludes valuation losses on aircraft disposals, among other items, amounted to EUR -235 million (H1 2019: EUR -53 million). EBIT amounted to EUR -299 million.

Current booking development and capacity utilisation

The coronavirus crisis and the related travel restrictions which impacted Austrian Airlines through no fault of its own continue to necessitate a large degree of flexibility in planning business operations. Landing bans in effect from July 16-31, 2020 resulted in flight cancellations and cut the passenger load factor from an average of about 70 percent to 60 percent. Nevertheless, Austrian Airlines registered a large number of short-term bookings, enabling the airline to look into the future with optimism.

In particular, holiday destinations are well booked. For example, routes such as Athens, Larnaca and Thessaloniki show an average passenger load factor of about 90 percent. In terms of flight traffic to neighbouring countries, the aircraft flying to Germany and Switzerland show an average capacity utilization of between 60 and 70 percent.

“Business trips and tourist travel as well are slowing picking up steam”, Wolfgang Jani adds. “Nevertheless, we only expect a slow ramping up of the aviation industry. The crisis is far from over, and this will be reflected in the performance indicators for the entire year”, CFO Jani concludes.

Overview of Key Facts and Figures