Austrian Airlines Reports Weaker Result Despite Passenger Growth
Austrian Airlines (AUA) was able to increase its passenger numbers, the number of flights, and revenue by five percent in 2024. Nevertheless, the airline recorded a significant decline in its adjusted operating result (Adjusted EBIT), which fell by 40 percent to EUR 76 million. The Lufthansa subsidiary explained this with special one-off effects such as strikes in the first quarter and high costs as a result of geopolitical developments.
AUA is optimistic about the future, aiming for a clear three-digit million EBIT and an EBIT margin of 8% by 2025 despite challenges. / Picture: © Austrian Airlines / Flickr Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)
According to AUA CEO Annette Mann, 2024 was characterized by difficult conditions. The first half of the year in particular hurt earnings. In addition to strike costs of at least EUR 35 million, the flight ban in the Middle East due to geopolitical tensions led to further burdens of around EUR 40 million. Despite these challenges, the third quarter proved to be a “record quarter” and the end of the year was stronger than expected. “We have achieved a solid result,” explained Mann at the annual press conference. “The slump compared to 2023 is due to clearly definable special effects and not a structural weakness at AUA.”
Competitive pressure and rising costs at the Vienna site Despite stable demand, AUA remains under considerable competitive pressure. Rising location costs in Vienna pose a particular challenge. “Airport charges have risen by 40 percent since 2019,” says Mann. In addition, air traffic taxes in Austria are particularly high in an international comparison. In contrast to other countries, which are reducing these taxes, they place an additional burden on domestic airlines. According to Mann, a departure with an Airbus A320 aircraft from Vienna can be up to seven times more expensive than from Prague or Madrid.
Another problem is inflation, which is above the EU average in Austria. “We are very concerned about how we can keep costs under control here,” emphasized Mann. The high-cost burden could jeopardize the competitiveness of Vienna as a business location in the long term. AUA is already seeking talks with the new black-red-pink federal government to discuss ways of reducing the tax burden and safeguarding Austria as an aviation location.
Plans for the future: investments and new destinations
Despite the economic challenges, AUA is optimistic about the future. The airline is expecting a positive travel year in 2025. Revenue rose to EUR 2.46 billion in 2024, while the number of flights increased to 119,127, and around 14.59 million passengers were transported. However, costs grew to 2.47 billion euros, an increase of eight percent. In the medium term, the company is aiming for an EBIT margin of eight percent, following a recent figure of 3.1 percent.
In the coming year, AUA is planning to expand its route network in order to make the offer more attractive for travelers. New destinations include Burgas in Bulgaria and several destinations in Northern Europe, including the Norwegian Lofoten Islands and Sylt in Germany. According to Mann, the trend towards cooler destinations is continuing and AUA is adapting its offer accordingly.
Fleet modernization with delays
The renewal of the long-haul fleet has been delayed due to delivery problems at Boeing. The Boeing 787-9 “Dreamliners” ordered cannot be delivered as planned, which means that the existing Boeing 767 fleet will have to remain in service for longer. To safeguard operations, more co-pilots are being trained on these aircraft. Nevertheless, at least one new 787 is expected in 2025.
The AUA Managing Board was reduced from three to two members at the beginning of 2024 after Michael Trestl moved to Lufthansa subsidiary ITA Airways. Annette Mann has taken over his agenda and is now managing AUA together with COO Francesco Sciortino.
A difficult year with a positive outlook
Despite a weaker result in 2024, Austrian Airlines believes it is well-equipped for the future. The economic challenges posed by rising costs, inflation, and geopolitical uncertainties remain, but AUA hopes to strengthen its competitiveness in the long term through targeted investments in the route network and fleet modernization. The airline is aiming for a significantly better result in the three-digit million range again in 2025.