Increasing passenger numbers in Norwegian airports, but still a
challenging financial situation
By
28 November
2022
Air traffic measured in passenger numbers for the year to date amounted to 33.2
million. This is almost two and a half times the volume of traffic for the
corresponding period in 2021. Nonetheless, passenger figures for this year to
date remain 20 per cent lower than for the same period in 2019.
The number of commercial air transport movements over the first
nine months of 2022 increased by 47 per cent compared with the corresponding
period in 2021. Domestic
air transport movements increased by 27 per cent, while the figure
for international air transport movements increased by 221 per cent.
The number of commercial air transport movements over
the first nine months of 2022 increased by 47 per cent
compared with the corresponding period in 2021. Domestic air transport
movements increased by 27 per cent, while the figure for
international air transport movements increased by 221 per cent.
Increased air traffic over the summer
The summer season entailed an increase in traffic, which saw Avinor scale
up operations at its airports to match
the increased traffic volume.
“Following the strong uptick in traffic during the
previous quarter, we are now seeing air traffic levelling off somewhat. There
have also been challenges, especially in Europe, which have meant that air
traffic has not yet returned to pre-pandemic levels,” says Abraham
Foss, CEO of Avinor.
Avinor continues to face a
challenging financial situation
Avinor’sequity ratio now stands at 40.4 per cent. The Group’s cash
flow before changes in debt was NOK -450 million over
the period January – September 2022.
“Scaling up operations to meet
increased traffic volumes was carefully balanced against increased operating costs. In
addition, the project portfolio is
being continuously assessed and prioritised. An
extraordinarily strong increase in prices for building and
construction projects represents an increased risk in
Avinor’s project portfolio,” says Foss,
Revenue and expenses
Traffic revenues increased by NOK 494 million,
while commercial revenues increased by NOK 826 million.
Avinor received a public subsidy of NOK 1,300 million from the
government during the third quarter of 2021. This explains the modest total increase in overall
operating income during the third quarter when compared with the corresponding
quarter in the previous year, despite the large increases in traffic-related
and commercial revenues.
The Group’s operating
income totalled NOK 2,967 million in the third quarter of 2022, which was an
increase of 0.7 per cent compared with the corresponding period in 2021.
Operating income in the first months of the year 2022 amounted to NOK 7,564
million, an increase of 4.6 percent compared to the corresponding period in
2021. Excluding the state operating subsidy of NOK 3,800 million in the
reporting period for 2021, operating income increased by NOK 4,135 million.
Total operating
expenses in the first nine months of 2022 comprised NOK 5,135 million, compared
to NOK 4,325 million in the equivalent period in 2021, which represents an
increase of 18.7 per cent. Cost developments must be viewed in the context of a
significantly higher traffic volume, both in terms of airport operations and
air navigation services.
Total depreciation and
impairments during the period January-September 2022 amounted to NOK 1,647
million, which is at the same level as during the corresponding period in 2021.
For the first nine
months of 2022, the Group recorded a profit after tax of NOK 614, compared with
NOK 648 during the corresponding period in 2021. The results for 2021 included
a state subsidy of NOK 3,800 million before tax.
The Group’s balance
sheet has increased by NOK 123 million during the first nine months of the year
to NOK 46.5 billion as at 30 September 2022. The Group’s equity ratio as at 30
September 2022 amounted to 29.8 per cent, compared with 26.9 per cent at the
end of 2021.
During the first nine
months of 2022, the Group’s cash flow before changes for liabilities was NOK
-450 million. With a net reduction in liabilities of NOK 481 million, the Group
ended up with a reduction in cash holding of NOK 931 million.
Changes to tax-free quotas will
result in a loss of income for Avinor
The government’s draft
state budget for 2023 contains a proposal to half the allowance for tax-free
purchases of tobacco. This will result in an estimated annual loss of income
for Avinor of around NOK 270 million.
Progress in new airports Mo i
Rana and Bodø
The government’s draft
state budget for 2023 as presented in early October includes the financing of
new airports in Bodø and Mo i Rana. The proposals see a total grant in 2023 to
Avinor in the amount of NOK 1.66 billion for the construction of a new airport
in Mo i Rana, and in respect of further planning for the new airport in Bodø,
including funding to allow for the purchase of the current airport site from
the Norwegian Defence Estates Agency.
“The first physical preparatory works
at the new airport in Mo i Rana began in September. Avinor has not yet gained
full access to the construction site, and work is currently underway with the
local authorities and rightsholders to facilitate this prior to the completion
of the initial works in the first quarter of 2023,” concludes Foss.
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