Q1 2018 financial results:
Austrian Airlines Reports Earnings Decline in the Winter Quarter
· Adjusted EBIT at minus EUR 67 million in the first quarter following a weak March
· Revenue increase and passenger growth as a consequence of fleet expansion
· Outlook: Positive operating results for the entire year 2018, but slightly below the prior year
Austrian Airlines, Austria’s flag carrier, reported adjusted earnings before interest and taxes (Adjusted EBIT) of minus EUR 67 million in the weak winter quarter of January-March 2018 (Q1 2017: minus EUR 59 million). The earnings decline is mainly due to three factors: the costs incurred as a result of works meetings and the warning strike in March, the weak demand in the Middle East and intensified competition at the Vienna flight hub. Nevertheless, Austrian Airlines succeeded in expanding its business. Passenger volume was up 13.3 percent to 2.5 million.
“Even if we are very pleased with the increased number of passengers, we begin the new year with an even higher deficit after the traditionally unprofitable winter quarter”, states Austrian Airlines CFO Wolfgang Jani. “We will make a considerable effort to make up for the losses.”
Revenues fell by 10 percent to EUR 396 million due to the application of IFRS 15*; adjusted for the IFRS 15 effect*, they were up by 6.8 percent because of the expansion of the fleet and business in European traffic. Total revenues grew by 4.9 percent. Operating expenses fell by 8.4 percent to EUR 482 million; adjusted for the IFRS 15 effect, total expenses rose by 5.9 percent due to higher personnel and material costs (see the enclosed table for details).
Adjusted EBIT, which, for example, deducts book gains from aircraft sales, amounted to minus EUR 67 million (Q1 2017: minus EUR 59 million). EBIT also totaled minus EUR 67 million and is thus clearly below the comparable earnings figure for the prior-year period of minus EUR 55 million.
At the same time, Austrian Airlines substantially expanded its traffic volume. In the first three months of the current year, it transported 2.5 million passengers, comprising a rise of 13.3 percent or about 292,000 more than in the first quarter of 2017. The flight offering measured in available seat kilometers (ASK) was increased by three percent to more than 5.2 billion. Capacity utilization (passenger load factor) rose by 4.2 percentage points to 72.7 percent.
Austrian Airlines operated a total of 31,280 flights in the first quarter of 2018 using 84 aircraft (plus two), comprising an average of 348 flights per day. The regularity of operation was 97.9 percent in the first quarter of 2018, whereas the punctuality on arrival equaled 83.6 percent. The deterioration of performance compared to the prior-year quarter can be attributed to the more adverse weather conditions and flight cancellations resulting from the works meetings held in March.
The total staff of the Austrian Airlines Group amounted to 7,089 employees as at the balance sheet date of March 31, 2018 (March 31, 2017: 6,585 employees). This substantial increase of 504 employees, a rise of eight percent, mainly related to hiring cockpit and cabin crew for flight operations.