In the first half of 2020, Brussels Airlines incurred a loss of €182 million as a result of the Covid-19 pandemic and its impact on the aviation sector.
Despite the severe cost-control measures taken to mitigate the crisis, first-half revenues fell to €252 million: a decrease of 63% if compared to the prior-year level.
Brussels Airlines reported that its passengers number fell by 67% and the seat load factor dropped by 7.4%.
The pandemic had a severe impact on the financial results of Brussels Airlines. The Belgian airline temporarily suspended all flights from 21 March to 14 June 2020. Only minimal flight capacities were maintained to repatriate Belgian and German citizens, to bring masks from China, and to transport medical equipment to Africa.
Starting from June 15, Brussels Airlines finally restarted its commercial flights again, though with a very limited network. Consequently, Brussels Airlines reported an EBIT of €182 million for the first semester of 2020, with a decrease of €211 million compared to last year.
Revenues dropped by 63%, shifting from €684 million to €252 million. Between January and June 2020, Brussels Airlines transported 1,590,448 passengers, while in the first six months of 2019 the passengers number was 4,854,603. The airline operated only 14,114 flights, registering a 64% decline compared to the first half of 2019. The seat load factor dropped from 79.8% to 72.4%.
In response to the crisis, Brussels Airlines implemented immediate actions to reduce both variable and fixed costs. The total operating expenses decreased by 39%, reaching €463 million, mainly because of volume-related decline and measures in the cost of materials and services.
Before the coronavirus started, Brussels Airlines was already planning a turnaround program named Reboot Plus. As a result of the Covid-19 crisis, the program is now being further intensified.
Reboot Plus aims to tackle the cost structure and cut marginally profitable and unprofitable routes. After the implementation of these adjustments, the overall size of the company will be reduced by 25%.
Brussels Airlines is simultaneously focusing on structural profitability to boost a solid growth. For this purpose, the company needs to reduce the overall costs, while increasing efficiency and productivity. Some measures that the carrier is taking to reach its goals include negotiations with lessors to reduce its fleet; the reduction of costs through supplier negotiations; simplification and automation of processes; and increase of efficiency with the Lufthansa Group network airlines.
Brussels Airlines has recently reached two major milestones:
1. First of all, thanks to alternative measures to which the company’s employees could subscribe, the number of forced dismissals is limited to 60; this number is way lower than the forecast of 1,000 layoffs.
2. Secondly, the Belgian Government and Lufthansa reached an agreement on a stabilization package which will help Brussels Airlines overcome the crisis.
Since 15 June, the airline has gradually started to increase the number of its flights for both holidaymakers and business travelers.
Due to the constantly changing situation, it is impossible to make predictions for the entire year.
These figures are excluding the Brussels Airlines operations out of Düsseldorf.