Tallinn Airport ended the year with lower-than-expected-loss and positive EBITDA
In 2020, 863,585 passengers travelled through Tallinn Airport, being 74% less than the year before. Despite the decline in the number of passengers, AS Tallinna Lennujaam ended the year with lower loss than expected and positive EBITDA.
Thanks to swift response, several austerity measures and effective cost management, AS Tallinna Lennujaam was able to end the year with a smaller than estimated loss and positive earnings before depreciation (EBITDA), which is a remarkable achievement among the European airports. The total turnover of the company was EUR 20.6 million, being a 56% decline (-26.6 million) compared to 2019. The group recorded a total operating income of EUR 36.3 million, which is EUR 24.1 million less than in 2019. Unaudited EBITDA was EUR 5.8 million and net loss EUR 2 million.
Due to the impact of coronavirus on the number of passengers and flight operations, AS Tallinna Lennujaam cut 25% of jobs in 2020 and as at the end of the year, 509 people continued to work for the company.
According to Riivo Tuvike, Chairman of the Management Board at Tallinn Airport, the previous year posed challenges on the level of both, business continuity as well as daily coping of individuals. “2020 will be remembered by all of us; still, I am pleased that despite the challenging situation and constantly changing and supplemented rules, the employees of the airport were always optimistic, open to solutions and offering the best service. This was confirmed also by the results of the airport service quality (ASQ) passenger survey, carried out quarterly by the ACI (Airport Council International), where the Tallinn Airport once again received high satisfaction of the passengers as regards the service level and the implementation of hygiene requirements. This is a recognition to the entire airport family. Thank you all, the current and former colleagues for this dedication! I would also like to thank our passengers, who regardless of the various restrictions still show great appreciation to the Tallinn aerial gateway,” Tuvike said.
“Despite the very tough decisions, it is apparent, in retrospect, that the quick reaction helped us continue with our strategic investments and still maintain a good investment capability. In 2021, we will continue with several strategic projects, such as expansion of the airside area in Tallinn, construction of the Pärnu airport and expansion of the Tallinn passenger terminal. Also, green transition in aviation is important and we plan to notably increase the capacity of our solar parks, so that we are able to produce 20% of our energy need from sunlight and our own production units by the end of the next year. Our total volume of investments for 2021 is EUR 35.9 million,” Tuvike added and stressed that the company will continue to increase the share of non-aviation earnings in the income portfolio. “Last year was a demonstration of how vulnerable the aviation sector can be if it is deprived of its only article of income. We will continue with several business development projects to secure sustainability of the airport also in situations where the main source of income is hit particularly hard.”
In 2020, the group invested EUR 16.7 million. During the year we continued with the construction of the reagent storage and warehouse building for the maintenance service, which was completed in January 2021. Out of the bigger investments, we commenced the expansion of the Tallinn airside area, reconstruction of Pärnu airport, the baggage check equipment was upgraded and altogether 7 solar parks were established in the airports throughout Estonia.
“While last year was complicated, then today we can see that the year 2021 may be even more challenging. We estimate that the number of passengers will be 33% of the volume of 2019, i.e., EUR 1.06 million; at the same time, the first months have shown a lower-than-expected number of passengers. The sales forecast of the company is EUR 21.3 million and today, we estimate the amount of loss to be EUR 5.3 million. A bigger loss compared to 2020 is caused by the strong two first months of 2020 that serve as a comparison base, and the consumption of reserves, as a result of which it is not possible to cut the costs any further, and lack of support measures. Also, a snowy start of the year played its part as regards the costs, where the snow removal expenses have grown 10 times compared to last year,” Tuvike added.
In mid-December, the Government of the Republic of Estonia announced that starting from 1 January 2021, the flight restrictions will be abolished, which enabled the airlines to start preparing flight schedules corresponding to the current market need. Thanks to that it was possible to reopen several important destinations and offer the passengers a flight schedule corresponding to the demand in terms of both, destinations as well as times. Last week brought us the first positive news in this area, when SWISS (as a new carrier) announced of the opening of a route to Zurich starting from June. The airport estimates an increase in the number of destinations and passengers starting from summer.
Tallinn Airport is the largest airport, belonging to the Estonian state, which has gained popularity as the world’s cosiest airport and has been repeatedly chosen as an airport with the best service in Europe. In 2019, Tallinn Airport provided services to more than EUR 3.26 million passengers and the company earned EUR 9.7 million in net profit. In addition to the Tallinn Airport, the company operates another six airports in Estonia.