airBaltic reported strong third quarter 2024 results with revenues totalling €236 million for the period. It marks an 8% increase from third quarter 2023 and also a record third quarter for the Latvian airline. The company also recorded a net profit of €40.3 million, swinging from last year's third quarter loss of €5.5 million.
The airline's adjusted EBITDAR of €81.6 million, up 7% from the same period last year, and reported an adjusted EBITDAR margin of 34.6% - down 0.2 percentage point. Operating expenses were mostly flat in the quarter at €194.6 million.
airBaltic's load factor increased six percentage points to 87.8% in the quarter, as well as carrying an additional 12% of passengers when compared to the same period last year - totalling 1.6 million passengers. The airline's total capacity increased 9.1% in the quarter and increased 1.7% excluding ACMI operations. Revenue per available seat kilometre (RASK) was flat at a negative 0.6% at 7.3 cents in the quarter. Cost per available seat kilometre (CASK) was down 2.6% to 6.5 cents.
The airline has also been preparing the launch its initial public offering (IPO), with plans to launch either at the end of this year or the first half of this year. However, the report confirmed that it has been moved to next year.
“The potential timeline for the IPO has shifted to 2025, and the management believes that based on its current cash balance, revenue growth and operating cash flow projections, as well as capital expenditure flexibility, the airline is expected to be able to manage liquidity needs until an equity financing event takes place in 2025,” the airline read in its report.
airBaltic said it is continuing negotiations with a potential strategic pre-IPO investor in conjunction with the offering preparations.
As of September 30, 2024, the company had negative equity of €97 million. Current liabilities exceeded its current assets by €161 million and the cash balance at that time was €55 million. In May, the airline had refinanced its €200 million outstanding bonds maturing on July 30, 2024, through a bond offering of €340 million 14.50% senior secured notes maturing in May 2029. In October, it issued an additional €40 million to the notes.
“The decision to tap the existing bond was driven by the postponement of the IPO to 2025, favourable high-yield debt market conditions and to further strengthen airBaltic's cash position going into 2025,” the airline read in its report.
Furthermore, the airline said it “continues to be hampered by the issues related to the Pratt & Whitney GTF engines. During the third quarter, it had nine aircraft out of operation as a result and ”therefore faced significantly higher ACMI-in and engine lease costs". The airline said it received “significantly higher commercial support” from Pratt & Whitney in comparison to the previous two quarters.
airBaltic adjusted its full year guidance downwards. Total revenue for the year is expected to be €740-750 million, while EBITDAR is set to be €190-200 million.