Luxair’s 2019 balance sheet was propped up by its packaged holiday and ground services divisions. It warned that this year’s expectations were “uncertain”. Pictured: A Luxair jet is seen at Berlin’s Tegel airport, 21 August 2019. Photo credit: Alessandro Ambrosetti (CC BY 2.0)
LuxairGroup lost money flying planes, but its LuxairTours and airport services businesses, along with financial manoeuvres, helped the grand duchy’s flag carrier eke out a net profit last year.
LuxairGroup posted turnover of €615m in 2019, compared to €593m in 2018 and €535m in 2017, the company said on 12 May. It recorded an operating loss of -€8.76m in 2019. However, after financial results are included, LuxairGroup posted net income of €8m in 2019, compared to €12.5m in 2018 and €9.5m in 2017.
“2019 was a challenging year for the aviation industry, due to relatively high kerosene prices, the increase in passenger compensation due to European regulations and a substantial increase in CO2 costs.”
Results were mixed across the company’s four business lines.
Passengers carried on scheduled flights fell -1% in 2019 (to 2.1m), compared to +11% in 2018 and +6% in 2017. “The seat load factor remained stable at 64% despite increased competition, route closures and increased capacities of +5%,” Ney stated.
Package holiday sales grew +11% in 2019, matching the rate in 2018 and above the +6% growth recorded in 2017.
“After several record years, LuxairCargo’s activity experienced its first slowdown in 2019,” per the company’s press release. Cargo tonnes handled declined -7% in 2019 (to 893,000 tonnes), in contrast to +2% in 2018 and +14% in 2017.
LuxairServices, which includes the firm’s catering and ground handling operations, registered slower but still positive growth. The number of passengers assisted at Luxembourg’s Findel airport was up +9% in 2019 (to 4.4m), compared to +12% in 2018 and +20% in 2017.
The company’s outlook for 2020 was hardly positive. According to Ney:
“At the time of writing this annual report, we are currently experiencing an unprecedented and unpredictable health crisis with singular human and economic repercussions. Players will have to be flexible, financially sound and well-prepared to weather this storm.”
The annual report subsequently stated:
“Forecasts are not optimistic for the company due to the coronavirus crisis. Destinations in northern Italy were badly hit by the covid-19 crisis in the first quarter. Civil aviation was progressively suspended around the world with Luxair operating its last flight on 23 March. The future remains uncertain.”
The Luxembourg state directly and indirectly holds a majority stake (60.86%) in Luxair. Other major shareholders are Banque Internationale à Luxembourg (13.14%) and Delfin, an investment vehicle for the family that owns the Luxottica eyewear group (13%).
In turn Luxair owns stakes in Cargolux and several other aviation and travel-related firms.