In a very competitive market, Brussels Airlines had good financial results in 2017 and made smart investments for the future.
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In 2017, they had an operating profit (EBIT) of €14.98 million.
€3.57 million was earned in the end.
There was still a lot of competition, which, along with a big increase in capacity due to fleet alignment (+11%), put a lot of pressure on yields.
The company’s market share went up by 1.4 p.p. (+1.3 million passengers).
With a record seat load factor of 78.8% (+4.1 p.p. ), there were 9.1 million more passengers than last year.
Key strategic projects were carried out, which hurt 2017’s results but opened up new ways to make money (Thomas Cook, the launch of Mumbai and Toronto).
The operating result is €25 million, if you take out the one-time costs of strategic investments.
The company made €1.326 billion in sales and has a very solid cash position of €204 million, even though it had to pay back €16.8 million in airport security subsidies after a bad decision by the European Commission. The extra two years of subsidies that were supposed to come in have been canceled, which will hurt the net result of the BGAAP.
Brussels Airlines brought on 645 new employees.
Even though the market was tough in 2017, Brussels Airlines kept growing and had a positive result for the third year in a row. Brussels Airlines added 11% more seats in 2017 compared to 2016. This was especially true on the European network, where the smaller AVRO RJ100 fleet (with 100 seats) was replaced in part by the bigger Airbus A319/320 (with 140/180 seats). The addition of an Airbus A330, which was mostly used on the new route to Mumbai, made it possible to add more seats on long-haul flights.
Because of the extra seats, the number of passengers has gone up by 17.3%. This has helped Brussels Airlines reach 9 million passengers for the first time in its history, which is one million more than its original goal for 2018. It has also led to a record seat load factor of 78.8% (+4.1 p.p. and only 1.8 p.p. below the 2018 goal), which is also a record for Brussels Airlines.
The European network is – Thomas Cook Airlines and two of its Airbus A320 planes were brought into Belgium, which helped Brussels Airlines strengthen its position in the important leisure market. Because it worked more closely with tour operator Thomas Cook Belgium, Brussels Airlines was able to add 26 new leisure destinations to its existing network and make even more money. The merger will add another million customers to Brussels Airlines’ customer base. This will help the highly competitive
European network make a lot more money.
Brussels Airlines was able to get a bigger share of the market by adding more seats to its European network and, as a result, more passengers. This put a lot of pressure on the yield, which was made worse by the increase in capacity caused by the fleet alignment toward the A320 family in a market that was still recovering from the terrorist attack on March 22. This hurt the company’s profits in the first few months of 2017. So, the full profit effect of switching from Avro to Airbus won’t be seen until 2018, as is already clear from the financial results of the first two months of 2018.
The area of Africa – Even though there were some political problems, Africa remained Brussels Airlines’ strongest market in 2017. For the first time ever, the airline’s African network had more than one million passengers. This was an increase of 14.0% and led to an average seat load factor of 87%, which was a record for Brussels Airlines. Brussels is still a major hub for African travelers. About 65% of African travellers connect through Brussels to a destination in Europe or the US on Brussels Airlines. The good results in Africa were helped by the airline’s cargo activities.
US & Canada – Brussels Airlines focused on how well its three destinations, New York, Washington, and Toronto, did on the North Atlantic route. During the first half of 2017, the terror level 3 still made it harder for people to travel from the US to Belgium and through Belgium. Traffic didn’t start to get better until the second semester. Overall passenger number grew by 13.7%.
Brussels Airlines thinks that the sales agreement it just made with the Lufthansa Group will help it do even better in the North Atlantic.
India, the newcomer – Brussels Airlines’ first Asian destination, Mumbai, opened in April of last year. The average number of people using their seats was 75%, and finances are in line with the business plan. India is an important economic partner for Belgium, and it also has a lot to offer in terms of tourism.
Even though there is still a lot of pressure on the yield, the first two months of this year show a trend toward more passengers and more money. With an increase in passengers of 15% in January and 16.5% in February, Brussels Airlines could strengthen its market position even more. The overall costs per seat are also lower than they were during the same time last year. This is especially true because the investments made in 2017 are starting to pay off.
