POLITICS & INSTITUTIONS - ECONOMY

Luxair Group lost €155m in 2020



The impact of the health crisis is felt in every branch of the Luxembourg company Luxair. Romain Gamba

The impact of the health crisis is felt in every branch of the Luxembourg company Luxair. Romain Gamba

The health crisis caused a 71% drop in passenger numbers for single flights and 66% for package flights. As a result, Luxair's net result is -€155m. Despite an increase in cargo volume, the additional costs generated did not help the situation.

The impact of the health crisis on the airline industry is well known. According to the International Air Transport Association (Iata), international passenger traffic in 2020 was 75.6% lower than in 2019. And this is confirmed, in figures, in Luxair's 2020 report published on Monday.

The company ended the year with an operating result of -€159.8m and a net result of -€154.9m, compared to -€8.7 and €8m, respectively, the previous year. Revenues of €263.1m fell by 57%.

€72.8m operating loss for the airline

Concerning single flights of its Luxair Luxembourg Airlines section, the number of passengers (658,873) decreased by 71%, resulting in a 70% reduction in revenue and a €72.8m operating loss. The occupancy rate decreased by 15% to 52%.

Regarding LuxairTours packages, 2020 had started well, with +20% sales in mid-February. However, due to covid-19, they dropped by 70% over the entire year. The number of passengers was limited to 257,651 (-66%). This resulted in an operating result of -€53.9m.

Fewer flights mean fewer services for its Luxair Services branch. It served only 1.4m passengers at the airport, a drop of 68%. For its catering activity, 881,641 meals were prepared compared to 2.3m in 2019. The operating result fell to -€15.5m.

Cargo not making up for losses

For cargo, the balance sheet was nuanced. In February, the paralysis of the Chinese economy led to a sharp decline in operations. This was quickly rectified in March with “the recovery of Chinese industry and the resumption of cargo flights to China, combined with the suspension of commercial flights whose cargo was redirected to freight-carrying aircraft,” the company said in a press release. The result: 947,000 tonnes of cargo transported, a 6% increase in cargo traffic. But despite the increase in volumes, “the management of operations was very difficult and resulted in additional costs, particularly in terms of manpower." As a result, the operating result went from a loss of €3m to a loss of €10.5m.

Perseverance

Despite this, Luxair's key words for 2020 are “perseverance” and “motivation”. It says it has responded to the situation “with a major injection of positivity”. With, for example, the opening of new destinations in the middle of the pandemic. Which continued in early 2021, with successful flights such as those to Dubai.

The company--owned 39.05% by the Luxembourg State and 21.81% by the BCEE was able to rely on its €366.3m of reserves and capital in 2019. They increase in 2020 to €211.4m.

For 2021, “the health crisis persists and operations have not yet returned to their pre-covid-19 levels,” the company explains. It hopes for a gradual recovery of activities for the 2021 summer season at Luxair, LuxairTours and Luxair Services. In cargo, “the volume of goods currently transiting through the Cargocenter is significant and the forecasts are encouraging”.

This article was originally published in French on Paperjam.lu. It has been translated and edited for Delano.