MIAMI – In a press release today, Austrian Airlines (OS) states that the coronavirus crisis and a three-month standstill of flight operations have pushed its annual financial results deep into the red. OS reported a loss of €319m (US$371m) in 2020.
This contrasts with the adjusted profit of €19m (US$23m) the airline generated in 2019. Austrian endured a pandemic-related 79% decrease in the number of passengers flying. This translated to 3.1 million passengers which abruptly halted the steep growth of passenger volume the airline had enjoyed prior to the pandemic.
“Naturally, the standstill in flight operations in 2020 also led to a standstill in our accounts” explains Austrian Airlines CEO Alexis von Hoensbroech. “This crisis catapulted us from a financially stable situation to the most challenging time in the history of aviation. We would not be able to survive this crisis without loans, government aid, and support in the form of contributions made by employees, suppliers, and system partners.”
Bookings and Staff
Austrian’s flight operations resumed in mid-June 2020 after an interruption of 100 days. Bookings increased rapidly and the flight offering quickly rose to 30% of normal levels. However, the pandemic shut down the airline again in September.
The total staff at Austrian Airlines was 6,443 employees as of December 31, 2020. That is down from 6,989 on December 31, 2019. This 8% decline was achieved through natural attrition, not filling vacant positions, and the expiration of limited term employment contracts.
Corporate Structure Review
According to the press release, the focus of the airline will be on safeguarding liquidity in the short term through stringent cost reduction efforts and ensuring the ability to pay back the state guaranteed loans in the long term.
Austrian is currently reviewing whether it should eventually retire any of the approximately 60 aircraft which will still be in operation after the crisis.
Also, OS has pressed ahead with the shutdown of the Austria Technik bases and passenger handling in several Austrian federal provinces. The passenger handling stations in Salzburg and Klagenfurt were closed. Aircraft maintenance and repair operations were terminated at the technical stations in Graz, Linz, Salzburg, and Klagenfurt in December 2020 or January 2021.
The affected 42 technicians were given the option to transfer to Vienna.
In addition, OS is moving ahead with its fleet restructuring drive and might retire the majority of its Dash aircraft. Recently, the airline also sold its three oldest Boeing 767s. The sale of seven A319 aircraft is still in the planning stages. A large portion of the sales proceeds of these aircraft will go directly to pay back the state-guaranteed loans.
“In 2021 we must succeed in welcoming a significantly higher number of passengers on board our flights once again and thus slowly and patiently tread the path back towards a renewed freedom to travel. It is a fact that the desire to travel already exists now,” states OS CEO von Hoensbroech.
Austrian continuously emphasizes the fact that the summer of 2021 will be decisive in determining the continuing existence of the red-white-red airline. “We are already witnessing initial positive trends in bookings for this year’s holiday season”, explains CCO Michael Trestl. “This makes me cautiously optimistic. Nevertheless, we will have to prepare countermeasures as well”, he adds.
Featured image: Austrian Airlines OE-LDA Airbus A319-112. Photo: Alberto/Airways