Brussels Airlines hopes to fly out of the red this year

Brussels Airlines carried over 6,8 million passengers last year, almost double the 2021 figure. That also led to a doubling of revenue, to 1,2 billion euros. On that basis, Brussels Airlines was able to limit the operating loss to 75 million euros, a halving compared to last year.

This year, the airline aims to leave the red figures behind for the first time in five years on an operational level, it said following the release of its annual figures.

While Brussels Airlines was profitable during the second half of the year, with a record profit in the third quarter, it was not enough to get out of the red for the whole year. For that, the impact of the coronavirus at the beginning of the year was still too massive.

6,8 million passengers

In 2022, Brussels Airlines, part of German parent group Lufthansa, flew at 74% of capacity compared to 2019 (before the health crisis). It transported 6,8 million passengers, twice as many as the previous year, but still a third less thus than in pre-corona 2019.

In addition, things like six strike days, high inflation (which led to an automatic wage indexation of around 12%), and high fuel costs (+175%, or one-third of total expenses) also weighed on the figures.

On the other hand, those higher costs were passed on in ticket prices, which rose on average by 15% (on medium-haul routes) to 25% (on long-haul routes). And it’s not over yet. According to the company’s directors, this increase seems inexorable for 2023.

Break-even target

For this year, Brussels Airlines is targeting ‘break-even’ at the level of adjusted operating profit. Although some expensive costs, such as high fuel prices, will not disappear this year either, however, the airline is confident that it can become sustainably profitable in the coming years.

At the end of last year, the airline repaid the state aid of 290 million euros it had received to survive the corona crisis. It has been expanding for a while since the Reboot Plus restructuring, which saw about a quarter of the workforce and a third of the fleet cut back.

Over 300 employees were recruited last year, bringing the workforce to almost 3 250 by the end of 2022. There are currently around 100 vacancies left to be filled.

Fleet and network expansion

The fleet will be expanded to 45 aircraft this year (up from 38 after restructuring), including three brand-new Airbus A320neos. Two regional aircraft (CRJ100) will also be leased from CityJet during the summer for flights to smaller destinations, such as Bordeaux and Billund in Denmark. Brussels Airlines also strengthened its position in West Africa with the opening of Ouagadougou (Burkina Faso) and Conakry (Guinea).

“With this fleet and network expansion, Brussels Airlines is achieving its targeted growth three years ahead of schedule,” says financial director Nina Öwerdieck.

New CEO in March

Christina Foerster, who temporarily took over as CEO of Brussels Airlines due to Peter Gerber’s sudden departure at the end of January, also called for a “level playing field” so that Brussels Airlines can compete with rivals on even terms. This includes both Belgium, where, for example, low airport charges for Ryanair at Charleroi have long been a thorn in the airline’s side, and the European level.

Several companies, including Brussels Airlines, believe that the European Commission’s ‘Fit for 55’ plan will affect their competitive position against non-European rivals. For the aviation sector, which accounts for 3% of all CO2 emissions, the plan envisages stricter emission rules, biofuel blending, and a paraffin or kerosine tax.

CEO ad interim Foerster added that a new CEO will be appointed at Brussels Airlines soon, “possibly in March”. “We are in the final steps of finding a new CEO. We expect to make an announcement in the coming weeks.”

Ample profit for Lufthansa

Parent-holding company Lufthansa did have an excellent year. Profit before interest and taxes came to 1,5 billion euros in 2022 on sales of 32,8 billion euros. This a significant improvement on a year earlier, when there was a 1,7 billion euros loss in the line on a 16,8 billion turnover.

Despite this, passenger numbers are not yet at pre-pandemic levels. Lufthansa, which, apart from Brussels Airlines, also includes companies such as Eurowings and Lufthansa German Airlines, does not expect to reach that level for this year either. The airline group assumes a capacity of 85 to 90% compared to before the health crisis – last year, that capacity was still at 72%, Lufthansa said. This year, the company wants to recruit 20 000 extra staff in Europe. The company is still very interested in buying the new-born Italian company ITA.