Fourth quarter 2023: Reduced revenue due to changing travel patterns.
“Avinor's main challenge is reduced revenues due to changes in travel patterns after the pandemic. There are far fewer business travelers than before, and Norwegians' domestic travel activity has levelled off. Lower traffic volume, lack of adjustment of airport taxes, as well as reduced revenue per passenger, largely due to reduced duty-free quota, challenge the Avinor model”, says Abraham Foss, CEO of Avinor.
The Group ends 2023 with NOK 11,514 million in operating revenues, an increase of NOK 1 096 million compared to 2022. The operating profit increased by NOK 493 million in 2023 compared to 2022. Despite lower traffic trends than previously expected at this time after the pandemic, we are observing a total passenger increase of 9.6 per cent in 2023. There is also a positive development in commercial revenues at airports excluding duty-free, with an increase in the size of the shopping basket that is larger than in society in general.
Profit after tax of NOK 304 million. is somewhat weaker than in 2022 (NOK 427 million). The decrease is primarily due to increased net financial expenses that are affected by market changes in hedging power prices. If adjusted for these effects in both years, the underlying profit is NOK 446 million. higher in 2023 compared to 2022.
Avinor's forecasts still estimate that traffic will not return to pre-pandemic levels until 2027/2028. The current period is marked by rising costs, higher interest rates, war, general unrest, and uncertainty. It makes people travel less.
A total of 49 million passengers travelled via Avinor's airports during 2023, an increase of 9.6 per cent compared to 2022. Passenger growth is driven by an increase in international traffic. The number of aircraft movements only increased by 0.8 per cent, reflecting a significantly higher load factor on completed flights. We see a long-term trend showing that more foreigners come to Norway as tourists, and not least to Northern Norway, where several new routes have been established during the year. At the same time, development of intercontinental routes is slow.
Framework conditions not adapted to the social mission.
“Avinor and aviation live off and for the passengers. It is dramatic when passengers and traffic are reduced over a long period of time. Avinor's revenues change in relation to the number of passengers, and it is the revenue part of our operation that is most challenging," says Abraham Foss.
A high proportion of Avinor's cost base is relatively fixed to ensuring safe and stable operations throughout the country. Total operating revenue per passenger increased by 0.8 per cent from 2022 to 2023, while total operating costs per passenger decreased by 1.2 per cent.
Avinor's financial challenges are primarily related to revenues. For many years, Avinor has operated with increasing efficiency. Thus, the fee level that airlines encounter at Avinor is very competitive compared to the fees at the main airports in our neighboring countries. Avinor has also cut almost NOK 1 billion in costs during and after the pandemic. When airlines nevertheless experience an overall higher tax level in Norway, it is because government taxes in the form of air passenger taxes and CO2 taxes have increased noticeably. Through lower traffic, changed customer groups, changes in the duty-free quota and failure to adjust Avinor's airport fees, which will cover the costs of using the nationwide network of airports, over many years - the accounts fall into imbalance.
The Group's operating margin was strengthened in 2023, but Avinor's overall financial framework conditions are not sufficiently adapted to the social mission and public policy tasks the company is set to solve. In a letter to Avinor 16 November 2023, the government states that the Avinor model will be continued and strengthened, the current airport structure will be maintained and Avinor will be ensured sustainable financial framework conditions. At the Extraordinary General Meeting on 18 December 2023, the Group's statutory equity requirement of at least 40.0 per cent was set at 35.0 per cent until 31 December 2024.
Several key milestones for infrastructure on the ground and in the air
In December 2023, the EFTA Surveillance Authority (ESA) approved the financing of a new airport in Bodø, and Avinor can thus initiate planned construction work for the new airport. Following the approval, Avinor took over areas from the Norwegian Defence Estates Agency in line with the agreements signed in March 2023. In Mo i Rana, the development work is well on track to open the new airport in 2027. Tromsø Airport has required expansion for a long time, and this spring we opened a new domestic terminal there. The new terminal will be a valuable addition to further growth in international traffic to Tromsø and Northern Norway.
During 2023, three more towers have also been transferred to remote control from the Remote Tower Centre in Bodø. The number of towers controlled remotely now count eleven in total.
Press service for journalistsTel:+47 918 15 firstname.lastname@example.org
Avinor is a wholly-owned state limited company under the Norwegian Ministry of Transport and Communications and is responsible for 44 state-owned airports. Avinor has taken a leading role in reducing climate gas emissions from the aviation industry, including the development of electric aircrafts and supplying sustainable jet-biojetfuel. Avinor provides safe and efficient travels for around 50 million passengers annually, half of which travel to and from Oslo Airport. Over 3000 employees are responsible for planning, developing and operating an efficient airport and air navigation service. Avinor is financed via airport charges and commercial sales. The air navigation services is organized as subsidiary wholly-owned by Avinor. Avinor's headquarter is in Oslo.
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Latest releases from The Avinor Group
The trend from 2023 continues in January: Growth abroad and flat development domestically9.2.2024 14:00:00 CET | Pressemelding
3.3 million passengers traveled to and from Avinor's airports in January. That is an increase of 2 percent compared to January last year.
Northern Norway's Skyward Surge: International Flights and Tourism on the Rise23.1.2024 13:22:01 CET | Press release
Northern Norway is experiencing a remarkable surge in international traffic, marked by a significant increase in passenger numbers and the establishment of new direct routes. This growth is most notably seen in Troms and Finnmark, with figures indicating a rapidly growing interest in the region. Avinor, in collaboration with local tourism actors and airlines, has played a crucial role in developing these routes.
Lufthansa Group Strengthens Its Commitment in Norway with New Routes and Increased Capacity in the Summer 2024 Program18.1.2024 11:00:00 CET | Press release
Avinor is pleased to announce that the Lufthansa Group is intensifying its focus on Norway as part of its 2024 summer program. This expansion is a response to the growing interest in Norway as a travel destination, especially from European travelers. Trondheim will be a new Lufthansa destination from Munich.
Discover Airlines opens Finnmark to Europe with new direct route16.1.2024 17:00:00 CET | Press release
Discover Airlines and Avinor are pleased to announce the launch of a new direct route from Frankfurt to Alta. This winter route opens the doors to a new chapter in Northern Norwegian tourism. "Alta deserves better accessibility to key markets for the local tourism industry," says Martin Langaas, Route Development Manager at Avinor. "Now that we can present the first air route dedicated to international tourism into Alta, we are opening up a whole new travel adventure for the entire Finnmark region."
Avinor summarizes aviation for 2023: 10% growth, but 10% below normal11.1.2024 10:00:00 CET | Pressemelding
In 2023, 49 million passengers traveled to and from Avinor's airports. This is an increase of 10 percent compared to 2022. At the same time, the number of passengers is 10 percent below the level in 2019, which was the last normal year before the pandemic.
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