2019, a challenging year for Brussels Airlines marked by a net loss of 40.6 million euros, a new strategic direction and the roll-out of the turnaround plan “Reboot”

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  • Decision on a closer embedding of Brussels Airlines in the Lufthansa Group Network Airlines.
  • Roll-out of the turnaround plan “Reboot” targeting an 8% EBIT margin as of 2022.
  • Strategic investments in the carrier’s long-haul fleet and long-haul cabin.
  • Headwinds like the bankruptcy of Thomas Cook Belgium, severely impacted the airline’s financial results.
  • Adjusted EBIT of -25.9 million euros and net result of -40.6 million euros (IFRS standard)
  • 1.6 billion euros revenue and 1.7% passenger growth.
  • Spread of the coronavirus and associated flight bans force Brussels Airlines to temporarily suspend all its flights.

Within an extremely challenging environment, Brussels Airlines closes the financial year 2019 with a loss of 40.6 million euros and an adjusted EBIT of -25.9 million euros (IFRS standard). The Belgian airline registered a passenger growth of 1.7%, reaching a total number of passengers of 10.2 million. The average seat load factor in 2019 was just above 81% (+0.52 P.p. compared to 2018), while the number of operated flights remained stable compared to the previous year (+0.1%).

Brussels Airlines’ financial results were largely influenced by the bankruptcy of Thomas Cook Belgium in September last year, as well as ATC strikes in Belgium and abroad, resulting in a negative impact of more than 12 million euros on the airline’s bottom line. Next to that, high fuel costs put an additional burden on the company’s financial results of 14 million euros.

2019 strategic milestones.

To further harmonise its fleet and lower its CO2 footprint, Brussels Airlines, with the help of the Lufthansa group, invested 140 million euros in new long-haul aircraft and long-haul cabins.

At the level of its positioning within the Lufthansa Group, the airline left the Eurowings Group to closer embed in the Lufthansa Group Network Airlines. In parallel, Brussels Airlines started the roll-out of its turnaround program “Reboot” that targets an EBIT margin of 8% as of 2022 by reducing overall costs, reviewing processes to increase efficiency and by redesigning its network.

Reboot – Reach a structurally sustainable future for the company as of 2022.

Within a very competitive market environment and after many years of growth but insufficient profitability, Brussels Airlines decided last year to reorient itself and to start the roll-out of its turnaround plan called Reboot.

“The name Reboot has not been chosen at random. It’s not just another cost-cutting program, but a thoroughly thought-through turnaround plan that next to working on the overall cost structure, also focuses on radically simplifying our way of working, a leaner organisation and a redesigned network. We have set ourselves an ambitious, but realistic target of a structural profitability as of 2022 and this to be able to fuel our future.”

– Dieter Vranckx, CEO of Brussels Airlines –

A dedicated Reboot team is working on more than 100 projects that tackle topics such as productivity, efficiency increase, cost optimisation, network review and embedding in the Lufthansa Group Network Airlines.

Coronavirus – Consequences of the worldwide spread  

The spread of the coronavirus and associated flight bans as well as other measures restricting air traffic, imposed by many countries around the world, have severely and negatively impacted Brussels Airlines’ flight schedules and forced the airline to announce the temporary suspension of its scheduled flight operations for four weeks as of 21 March 2020.

The Belgian carrier keeps, however, a minimal flight capacity available for repatriation flights, on request of the Belgian government.

“We have seen many crises in our company’s history, but the present Coronavirus crisis has a never seen before impact on Brussels Airlines. Not only in terms of cancellations and incoming bookings, but also the no-show rate rapidly accelerated, reaching more than 30% for Europe and North-Atlantic. Next to that, due to the many travel restrictions, we were obliged to continuously adapt our offer, making it unfortunately very difficult for us to offer our guests the service they are used to, despite the exemplary support and continuous care by our employees for our guests.“

– Dieter Vranckx, CEO of Brussels Airlines –

Coronavirus – Economic Measures to reduce the negative financial impact

As a responsible employer, Brussels Airlines has taken rapid measures to reduce the negative financial impact on the company. Next to implementing for the entire airline a 30% temporary technical unemployment regime between 16 March and 20 March, Brussels Airlines decided to expand this measure, in line with the temporary suspension of all its flights, to 100%. Some exceptions to the full temporary unemployment will be made to cover the repatriation flights and to organise the restart of the operations.

The Management Board of Brussels Airlines has together with the Extended Management Board decided to reduce its salary for the upcoming six months by respectively 20% and 15%.

“Exceptional circumstances, unfortunately, require exceptional measures. It’s our duty to act as a responsible company and reduce the financial impact on our airline to a maximum extent in order to exit this crisis in the best way possible.” 

 – Dieter Vranckx, CEO of Brussels Airlines –

Lufthansa Group achieves adjusted EBIT of 2 billion euros in a difficult economic environment

2 COMMENTS

  1. This loss occurred in 2019, well before the Corona virus crisis. So what happened while all other companies in the group (Swiss, Austrian and of course Lufthansa it self ) recorded positive results ? Looks like Belgian will never be able to properly manage their air companies..

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