Aeroflot has announced its results for the first half of 2014, which indicate that the escalation of sanctions on Russia has had a significant effect.
During H1 2014, revenue increased by 9.4% year-on-year to RUB140,281 million, driven by growth in the Aeroflot Group’s passenger traffic. The airline also reported that revenue growth was supported by a decline in the rouble’s exchange rate with key global currencies.
Operating costs amounted to RUB141,665 million, up 15.2% year-on-year, due to the weaker rouble and the increased scale of the Group’s operations. EBITDAR decreased by 16.6% year-on-year compared to H1 2013 to RUB16,657 million. The Group’s net loss for the period was RUB1,905 million.
Aeroflot Deputy CEO for Finance and Network and Revenue Management Shamil Kurmashov said: “In the face of challenging economic and market conditions Aeroflot has strengthened its position as one of Europe’s most dynamic airline Groups. We grew faster than the market in key areas of operating performance, optimised our route network and expanded our fleet with modern aircraft. Aeroflot also further transformed the domestic commercial aviation market with the launch of Russia’s first major low-cost carrier, proving there is demand among consumers for this type of transportation. Despite the volatile economic situation we face this year, the Russian market continues to hold significant long-term structural growth potential, and the Group’s unique competitive advantages will enable it to continue to outgrow the market.”
Kurmashov added: “Slower economic growth rates in Russia, combined with significant one-off factors, had a negative effect on the Group’s financial results in the first half of 2014. At the same time, Aeroflot Group remains well-positioned to continue its profitable growth and to implement its strategy aimed at building value for our shareholders.”
Aeroflot also issued traffic statistics for July 2014, in which passenger traffic totalled 2.35 million, an 11.8% year-on-year increase. Passenger traffic on domestic routes increased by 32.6% year-on-year in July, driven in part by increased flight frequency on high-demand routes and capacity additions.
International traffic declined 3.0% year-on-year in July 2014, partly due to the effects of the ongoing conflict in the Ukraine, which saw a reduction in frequency of flights to the Ukrainian cities of Kiev and Odessa and the suspension of flights to Donetsk and Kharkov, as well as flights to Simferopol in Crimea being reclassified as domestic.
Revenue passenger kilometres (RPK) for July 2014 totalled 6.67bn, a year-on-year increase of 12.7%. RPKs for domestic and international flights were up 28.2% and 4.5% year-on-year respectively.
Aeroflot announces sanctions-affected H1 results
