Austrian Airlines Begins 2017 with Traditionally Negative Winter Quarter
· Revenue and passenger growth as result of fleet expansion
· Adjusted EBIT down from minus EUR 29 million to the “normal level” of minus EUR 59 million
· Outlook: Positive annual results in 2017, but lower than previous year
Austrian Airlines, Austria’s flag carrier, reported earnings before interest and taxes (EBIT) of minus EUR 55 million in the seasonally-related weak winter quarter of January to March. Adjusted EBIT amounted to minus EUR 59 million (Q1 2016: minus EUR 29 million). However, a comparison to the previous year is not conclusive due to the positive one-off effect in the first quarter of 2016, relating to the conclusion of a long-term lease agreement with Vienna Airport for the Technical Base. To enable a better comparison, adjusted EBIT in the first quarter of 2015 totaled minus EUR 53 million. At the same time, Austrian Airlines has been able to significantly expand its business volume. In the first quarter of 2017, revenue climbed 10% and the number of passengers carried by the airline rose 7% due to the integration of additional and larger aircraft.
“We are pleased with the passenger and revenue growth”, says Austrian Airlines CFO Heinz Lachinger. “This demonstrates the sustained demand for our flight services in spite of the difficult market situation. At the same time, the seasonal effect of winter, typical for this latitude, continues to have a strong negative impact on our business. We are confident that we will be able to make up for this in the second quarter. We expect clearly positive business results for the entire year of 2017, but below the prior-year level”, he adds.
First-quarter revenue rose 10% to EUR 440 million (Q1 2016: EUR 400 million) as a result of the expansion of the fleet and increased bilateral flight traffic between Austria and Germany. Total operating revenues were up 2% to EUR 472 million, whereas total operating expenditures climbed 7% to EUR 527 million due to higher fuel and maintenance costs. EBIT amounted to minus EUR 55 million in the first quarter of 2017, thus below the comparable prior-year EBIT of minus EUR 28 million. Adjusted EBIT, which, for example, deducts book gains from aircraft sales, totaled minus EUR 59 million (Q1 2016: minus EUR 29 million).
Austrian Airlines carried 2.2 million passengers in the first three months of the current year, comprising a rise of 7% or 136,000 more passengers than in the first quarter of 2016. The flight offering measured in available seat kilometers (ASK) was increased by 3% to 5.1 billion. Capacity utilization fell by 2.6 percentage points to 68.5% (see the attached chart). This decline is related, among other things, to the replacement and expansion of the medium-haul fleet with Embraer instead of Fokker aircraft. On average, the new Embraer jets are more than 20% larger than their Fokker counterparts.
In the first quarter of 2017, Austrian Airlines operated a total of 29,808 flights, or an average of 318 flights per day, using 82 aircraft (a year-on-year rise of six). In the year 2016, the airline’s fleet was expanded by two Airbus A320 jets used for bilateral flight traffic. This is complemented by four (of a total of five planned) Airbus A320 aircraft, which Austrian Airlines has leased from airberlin within a wet lease agreement starting in March 2017. The regularity of operation amounted to 98.4% in the first three months, whereas the punctuality rate on departure was 86.3%. The sharp decline in punctuality of more than four percentage points, in comparison to the first quarter of 2016, was related to the more unfavorable weather conditions prevailing in the first quarter of 2017.
The total staff of the Austrian Airlines Group amounted to 6,585 employees as at the balance sheet date of March 31, 2017 (March 31, 2016: 6,149 employees). This substantial rise of 436 employees (+7%) primarily relates to the cockpit and cabin crew.