Tallinn Airport Ended the Year with 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; also, the airport was recognised as the Best European Airport for the third year in a row. 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, secure the financial strength and thereby still maintain a good investment capability. In 2021, we will continue with several strategic projects both in Tallinn as well as in regional airports. I am pleased that already by the end of this year we will finalise the construction of the Cargo and MRO hub, which is unique in Europe, that provides us with a possibility to develop the cargo business and maintenance of airplanes and helps to turn Tallinn into an attractive destination also for the aviation companies, besides passengers. We have planned 36 hectares of land for the Cargo and MRO hub and by the year-end we will finalize 36,000 m2 of new apron. Also, green transition in aviation continues to be important for us 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 Parnu 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., 1.06 million euros; at the same time, the first months have shown a lower-than-expected number of passengers. The sales forecast of the company is 21.3 million euros and today, we estimate the amount of loss to be 5.3 million euros. 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.