LuxairGroup have announced their annual results for 2014, showing general improvement, with a better than expected net profit increase, which confirms the effectiveness of its growth strategy.
Following a return to a net profit in 2013, 2014 saw the Group finish with positive operating and net income, despite the generally still sluggish economic environment and the tough competition encountered in all markets.
Paul Helminger, Chairman of the Board, expressed his surprise and further optimism for the future, “LuxairGroup closed the year 2014 with more than respectable results. Given the unfavourable context in which the company has evolved throughout the year, this is an unexpected success which augurs well for its future.”
CEO of LuxairGroup, Adrian Ney also showed his satisfaction with the performance achieved last year: “Over the last two years, LuxairGroup has demonstrated its ability to innovate and thus managed to cope with competition. The year 2014 was marked by the crossing, for the first time, of the one-million-passenger-threshold by Luxair Luxembourg Airline and by a 30% reduction of the loss of our airline business. On our other markets, we have also performed well, a reflection of our investments in particular in our fleet and the infrastructure for our cargo handling activity.
Luxair Luxembourg Airlines ended the year with an operating loss of €8.4M, a notable improvement over the operating loss of €12M recorded in 2013. LuxairTours also improved its operational result, at €10.1M against €9.4M in 2013. LuxairCARGO’s operating result, which confirmed its return to profitability, remained stable at €1.7M.
The passenger assistance and catering activities ended the year with decreased operating results compared to the previous year, at €0.4M to the €1M in the previous year for the first and €1M to €1.4M for the second. Positive at €5.1M for all divisions, LuxairGroup had a positive, €5.1M for all divisions, with final operating profit of €1.3M after factoring in the contributions of LuxairGroup’s shareholdings.
After taking into account the extraordinary financial results, which were mainly a reflection of the sale of part of the shares held by LuxairGroup in Cargolux, and taxes, LuxairGroup recorded a net profit of €9.7M for the year, against €1.9M for 2013.
With 1.09 million passengers in 2014, Luxair Luxembourg Airlines recorded a 19% growth in the number of passengers, confirming the success of its strategy formulated two years ago. This strategy, which is based on a gradual and controlled increase of capacity associated with an increase in the proportion of tickets offered at entry price (Primo family fares, with return trips from €99), enabled Luxair to maintain its quality service advantage and price transparency over its competitors, while at the same time attracting new leisure customers.
The revenue of Luxair Luxembourg Airlines increased by 15% over the previous year. The business benefited from reduced fuel costs during the second half of the year and from controlled labour costs, while competition on several routes served by Luxair rose. The year was marked by the successful launch of three new routes (Lisbon, Dublin, Stockholm).
Tour operator LuxairTours recorded a virtually stable total number of passengers in 2014 compared to 2013, with 539,000 tourists. Operating profit improved to €10.1M from the €9.4M of the previous year, and revenue increased by 1% compared to 2013. This performance reflected the success of its destinations diversification and the increasing of its Boeing 737-800 aircraft fleet, which offers a level of comfort, much appreciated by the passengers and is remarkably low cost per passenger seat. The year also saw an early recovery for destinations that had been affected by the Arab Spring. This will be a challenge for this year, once again, following the terrorist attacks in Paris and Tunis at the start of the year.
However, activities begin the 2015 fiscal year under good pretences thanks to the 6% increase in seating capacity – due in large part to the arrival of a new Boeing 737-800, which will allow LuxairTours to offer more room on politically-stable destinations, such as Majorca and Corfu, and new destination Olbia in Sardinia. This has also been boosted by the increased offer of the popular Luxiclub activities for children, which is now a feature at thirteen hotels.
LuxairCARGO was able to confirm its return to profitability in 2014, with a 5% increase of the tonnes processed, at 723,000 tonnes, and a stable operating profit at €1.7M.
It benefited from the economic recovery and took advantage of the good level of activity of its main customer, Cargolux. The activity nevertheless remains fragile, first because of the timidity of the economic recovery and next due to its high exposure to competition resulting from its salary structure. In order to strengthen its operational capabilities, LuxairCARGO continued in 2014 and early 2015 to invest in its infrastructure, with the arrival in particular of new high-loaders, which allow it to now simultaneously handle six Boeing 747.
In parallel, LuxairCARGO deepened its expertise and its offer in terms of niche activities, especially for pharmaceuticals and health goods, as well as for the transportation of animals.
