Brussels Airlines improves financial results significantly in 2014 and approaches break-even point

Thursday, March 12, 2015 — Despite the challenging market conditions and increased competition, Brussels Airlines was able to improve its financial results considerably in 2014. Thanks to the new commercial strategy, which led to a strong passenger growth, and a strict cost reduction program, the net loss is limited to -4.2 million euro. Brussels Airlines is therefore on the right track to become profitable again in 2015.

In 2014 Brussels Airlines registered a passenger growth of 12.6 percent (this growth excludes charter activity). On its flights within Europe, to Africa and the United States the airline attracted 750,000 more passengers compared to 2013. The seat load factor increased by 4.5 percentage points and the freight activity by nearly 10 percent. A strong commercial performance, since the increased competition led to other airlines adding 1.4 million additional seats and more freight capacity from and to Brussels Airlines, resulting in a price war. Also in light of the Ebola epidemic and the weak economic growth in the Eurozone, the commercial appeal of Brussels Airlines in 2014 is remarkable to say the least. The airline is even at the top of fastest growing airlines in Europe in 2014. Not least because of the close cooperation within the Lufthansa Group and its subsidiaries in Belgium.

“It was a very rough year for our African operations due to the Ebola crisis, says CEO Bernard Gustin. We are proud that we were able to continue our flights to the Ebola-stricken countries. Therefore we are infinitely grateful to our frontline staff for their efforts”.

Results in line with expectations

2014 was a year marked by an important expansion of our offer (485,000 extra seats offered, 12 new destinatons). Significant investments have been done in order to further improve the service towards our guests. In parallel we reduced our cost base significantly to be able to offer even more attractive fares and to improve our results in line with our objectives.
The operational result, which amounted to -28.2 million euro in 2013, remained limited to -9 million in 2014. The net loss decreased by 17.8 million to -4.2 million, approaching the break-even mark.

“We have improved our competitiveness and our financial results show that our business model was the right choice, since more and more travelers choose Brussels Airlines. We now have a stable foundation to build further on and to create a dynamic airline that flexibly responds to market trends and offers a competitive price for all market segments. I am very grateful to all our employees for their tireless efforts and their adaptability to create a more competitive company.”

-- Bernard Gustin, CEO Brussels Airlines

Investment year

2014 was the year in which Brussels Airlines has invested significantly. On the short- and mid-haul network, the airline introduced four new travel products (Check&Go, Light&Relax, Flex&Fast, Bizz&Class), supported by a completely new marketing look and feel. Two Airbus A320 aircraft were added to the fleet and the European network was expanded with 12 additional destinations. The newly launched brusselsairlines.com attracts more and more visitors and buyers and the state-of-the-art airport lounge “The Loft”, which opened in 2014, became thé place to be for frequent flyers and business travelers at Brussels Airport in no time. These investments in service and quality have been rewarded with several awards already.

“On top of the 70 million we invested between 2011 and 2013, we have invested another 15 million euro in the improvement and expansion of our fleet and in the implementation of more efficient work tools to further improve our customer experience in 2014. These investments were always combined with further cost reductions to increase our competitiveness and to offer attractive fares to our customers.

-- Jan De Raeymaeker, Chief Finanical Officer

On the way to profitability in 2015

“Despite the increased competition and weak economic growth we are back on track to become profitable again in 2015, as we had planned”, says CEO Bernard Gustin. “We continue our strategy to increase the attractiveness of our product offer. The pressure on our cost remains high, though and we continue to further reduce costs, without compromising on our quality service, in order to be able to remain competitive in the market. We expect to welcome more than 7 million passengers in 2015.”

The decreased fuel prices will contribute to the further improvement of the results but this effect should certainly not be overestimated, because the dollar became more expensive compared to the euro and because of the advance purchase of jet fuel (fuel hedging).

Investments 2015

Also in 2015 Brussels Airlines expands its fleet, by adding two mid-haul aircraft. Nine destinations are added to the network: Billund, Bordeaux, Calvi, Dubrovnik, Ibiza, Lourdes, Olbia, St Petersburg and Zagreb. In cooperation with different large tour operators, Brussels Airlines will operate an increased number of holiday flights.

In 2015 we will invest 30 million euros, including in a new loyalty program which will be launched later this year, as well as the further expansion of our fleet. This is part of an investment program spread over the next three years, accounting for a total of 70 million euros”, says Jan De Raeymaeker. “As in previous years, cost reductions will again be implemented in parallel, to ensure increasing competitiveness.”

in € 2014 2013 2012 2011
Operating Result -9.0 mio -28 mio -92 mio -87 mio
Net Result -4.2 mio -22 mio -61 mio -80 mio