Avinor has been in a challenging financial situation since the pandemic which caused the company extraordinary revenue losses due to pandemic measures. In the years before and after the pandemic, traffic fees have not been regulated in accordance with the "Single-till" model, which aligns with the societal mission, sector policy goals, and the financing of tasks for other sectors. This means that the revenue level does not justify a relatively fixed cost level. Significant cuts in duty-free quotas in 2022 and 2023 further weakened the company's revenues.
Traffic Growth Drives Increased Earnings
A total of 51.4 million passengers travelled through Avinor's airports in 2024, an increase of 4.8 percent compared to 2023. In the fourth quarter, 12.5 million passengers travelled through the airports, an increase of 5.7 percent from the fourth quarter of 2023. Passenger growth is driven by international traffic. In 2024, it accounted for 43 percent of passenger traffic, up from 41 percent in 2023. In 2024, passenger growth was 8.9 percent for international traffic and 1.9 percent for domestic traffic compared to the previous year. For the fourth quarter alone, passenger growth for international traffic was 9.8 percent, while domestic traffic saw an increase of 3.2 percent.
Although the number of passengers increased in 2024, there was a decline in the number of flight movements. The number of passengers per flight is therefore increasing. The load factor was a record high of 73.1 percent in 2024, distributed as 76.9 percent for international and 70.5 percent for domestic.
Based on reports from airlines, a positive capacity development is expected for the next three quarters. The anticipated growth in the first quarter of 2025 is 4.6 percent, which is expected to decrease to 2.4 percent in the second quarter and to 2.9 percent in the third quarter of 2025. Consequently, a moderate increase in the number of passengers is expected in next year's summer program.
Strengthened Financial Solidity
Avinor's operating margin improved in 2024 compared to 2023. Total operating revenues amounted to NOK 12,110 million. Adjusted revenue growth in 2024 compared to 2023 was 7.5 percent for the fourth quarter alone and 6.8 percent accumulated for the entire year of 2024. The revenue growth is mainly driven by increased passenger volume, but also a slight increase in revenue per passenger.
Adjusted operating costs in 2024, compared to 2023, increased by 2.5 percent for the whole year and decreased by 1.4 percent in the fourth quarter alone. This is mainly related to wage settlements.
“Avinor continuously works to optimize costs in ongoing operations. At the same time, a high proportion of the company's cost base is relatively fixed and necessary to maintain safe and stable operations as assumed in the societal mission and to perform government-mandated tasks”, says Kirsebom.
Continued Dialogue with the Owner on Flexibility and Societal Tasks
There is ongoing dialogue with the Ministry of Transport regarding the follow-up of the recommendations from the independent company review conducted by KPMG in 2024. This includes, among other things, the extent of Avinor's flexibility to optimize its own operations and cash flow, the financing of tasks that Avinor performs for other sectors, as well as capital structure and dividend policy.
There is high attention on Avinor's extensive project portfolio. This particularly applies to the construction of new airports in Bodø and Mo i Rana, upgrades of Tromsø, Evenes, and Andøya airports, and the technological generational shift in air traffic control systems in en-route and tower services. The changed security policy situation with new requirements for the national total defense in general, and the Norwegian Armed Forces in particular, may lead to ongoing changes in premises, that represent a risk of increased costs for the development projects that interface with the Armed Forces.
Tags: Anders Kirsebom, Avinor
