(Posted 03rd March 2022)
BRUSSELS AIRLINES IMPROVES ITS FINANCIAL RESULTS IN 2021
COVID-19 pandemic still heavily impacted the airline’s EBIT
- In line with expectations due to the Covid-19 crisis, Brussels Airlines booked a loss of EUR 189 million in the financial year 2021, an improvement of 35% versus the previous year.
- Losses limited thanks to successful Reboot Plus transformation plan and strict cash management.
- Revenue up by 35% to 560 million, while operating expenses were only up by 5%
- Passenger numbers rose by 47% to 3.5 million.
- Growth in 2022 in terms of network, fleet and people
2021 was another year marked by the Covid pandemic and a year that still required a high level of resilience. The year started with a very limited flight schedule, in line with the low market demand due to high infection rates and lockdowns all over Europe, followed by a three-month travel ban issued by the Belgian government. This travel ban heavily impacted Brussels Airlines’ first quarter.
On 19th of April, the travel ban was lifted and demand started to pick up again, while the vaccination campaign was also gaining speed. What followed was a rapid increase in demand towards the summer. Brussels Airlines restarted full hub operations in June and built up its capacity from 12% to 53% of pre-pandemic levels towards the summer. The summer demand lasted longer than other years due to the effect of postponed travel plans and the desire to travel after the lockdown. This strong and prolonged summer peak led to a positive third quarter and the first profit since the beginning of the pandemic. November came with rising infection numbers and again many restrictions, causing the demand to decrease once more. The end-of-year holiday showed a strong travel peak, before returning to a lower winter demand due to the emergence of the Omicron variant.
After the restructuring phase of the Reboot Plus plan and the numerous changes undertaken, in November 2021 Brussels Airlines presented a new branding to strengthen its Belgian identity and to mark a new start after the coronavirus crisis. The new branding was an important signal towards the market that the airline is here to stay. As additional symbol for its future-readiness the decision was taken in June 2021 to add three Airbus A320neos to the Brussels Airlines fleet in summer 2023. With these new state-of-the-art aircraft and by retiring three older A319s, Brussels Airlines takes a significant step to the further modernization of its fleet and reduces carbon and noise emissions in its medium-haul network.
In the whole of 2021, the demand on the African network was again very resilient, mainly thanks to the business and VFR segments (Visiting Friends and Relatives), while the European segment was more volatile. All in all, the full-year capacity (Available seat-kilometres) was 62% higher than in 2020 and Brussels Airlines operated 39% more flights, welcoming 3.5 million passengers (+47%).
The passenger load factor was 1.1 percentage points lower than the previous year’s level, at 67.2% (previous year: 68.3%). Yields fell by 6.9% after adjusting for exchange rates. Traffic revenue increased with the expansion of traffic by 31% to EUR 503m (previous year: EUR 384m).
Revenue rose by 35% to EUR 560m (previous year: EUR 414m). Operating income rose by 31% to EUR 599m (previous year: EUR 456m). The Reboot Pluscost savings measures and strict cost discipline limited the increase in operating costs. At EUR 788m, they were only up 5% on the previous year. Higher fuel costs (+62%) due to increased prices and volumes as well as higher fees and charges due to volumes (+55%) were partially countered by lower staff costs (–17%).
In the 2021 financial year, Adjusted EBIT at Brussels Airlines was at EUR –189m (previous year: EUR –293m). The Adjusted EBIT margin was –33.8% (previous year: –70.8%). The EBIT was also at EUR –189m (previous year: EUR –332m). The previous year’s value was adversely affected by write-downs on the fleet totalling EUR 33m.
2021 key figures
Brussels Airlines successfully completed its Reboot Plus restructuring, creating a competitive cost basis for a profitable future
Brussels Airlines intensified its restructuring programme in response to the pandemic. “Reboot Plus” forms the basis for the airline’s sustainable future. As part of the programme, Brussels Airlines completed the restructuring phase. Two Airbus A330s left the long-haul fleet, and eight A320 family aircraft were removed from the short- and medium-haul fleets. The number of employees was reduced by more than 20% compared to the pre-pandemic level. Since January 2021, new collective labour agreements have been in place with all employee groups at Brussels Airlines to enable competitive staff costs. In 2021, the transformation plan entered a new phase, the phase of improvement and investment into technologies and simplification, to gain efficiency.
Said Peter Gerber the CEO of Brussels Airlines: “This year we focused on the second phase of Reboot Plus, the improvement phase. We have been building the New Brussels Airlines. Our rebranding was a very visible symbol hereof, while behind the scenes we invested in a new crew scheduling tool, in our renewed office space and in a multitude of projects that either bring efficiency gains or simplification in our processes. I want to thank all Brussels Airlines employees for the achievements last year. Together we are building a bright future for our company.”
Brussels Airlines will gradually increase its capacity to reach 80% of its 2019 levels by July, reinforcing its position as the home carrier of Belgium with a strong focus on leisure and reinforcing its position in Africa thanks to the 9th aircraft. For the entire year, the airline plans to operate 74% of its 2019 capacity levels.
Nina Owerdieck, CFO of Brussels Airlines, also commented: “We have had some difficult winter months due to the Omicron wave, but we see a promising spring and summer in terms of demand. As travel regulations will dissipate and measures will be eased all around Europe, we foresee a return to 80% capacity of our pre-pandemic levels in the summer holidays. Cost-consciousness remains part of our DNA in order to reach structural profitability. In that respect, our plans remain unchanged: we aim for a black zero in 2022 and we remain committed to reaching 8% EBIT in 2024, under unchanged circumstances. Thanks to the successful implementation of our Reboot Plus plan, we have created the right foundation to grow and to look ahead to a profitable future.”
Brussels Airlines strengthens its market position in West Africa
In November 2021, it was decided to expand the long-haul fleet of Brussels Airlines with a ninth A330. With the additional capacity, Brussels Airlines will restart its route to Ouagadougou, Burkina Faso, and Conakry, Guinea, and increase the frequencies of its existing West African routes in 2022. Flights to Entebbe in Uganda are at that time also due to go daily again, with two of the flights routing via Bujumbura in Burundi while the remaining 5 flights will route via Kigali in Rwanda.
More growth was announced this week for 2022, as two aircraft, an A319 and an A320Neo will reinforce the summer operations at Brussels Airlines, allowing Brussels Airlines to reinforce its position as Belgium’s home carrier.
To cater for this growth, Brussels Airlines announced earlier this week that it is hiring 288 people in all departments of the company.