Aeroflot is set to report strong Q4 and full year 2019 results, according to analysts from VTB Capital.
The Russian flag carrier is due to report its Q4 and full year results 2019 on March 3, and analysts from VTB capital said it expected the airline to post strong figures against a backdrop of rising yields and lowering costs.
VTB’s analysts said that Aeroflot’s Q4 figures could prove the pick of 2019 for the airline on a year-on-year comparison, due to a poor performance for that period 12 months earlier.
On the operating side, the Group's 4Q19 RPK growth would be up 5% year-on-year due to ongoing fleet renewal and phasing out long-haul aircraft. The analysts said a major driver for this increase was a 32% increase in passenger numbers for Aeroflot’s low-cost carrier Pobeda.
“We expect yields to show almost 8% growth on the domestic market and a 4% decline on the international market due to the 7% strengthened rouble relative to the euro,” said VTB’s analysts. “ All in all, we see revenue up at 4% up year on year slightly pressured by slower cargo segment growth and lower FX-nominated sales,” they added.
While overall VTB’s analysts were positive over Aeroflot’s 2020 outlook, they unsurprisingly pointed to the coronavirus outbreak as a potential drag on growth.
“We continue to believe in Aeroflot’s story and see the 4Q19 results as a likely positive trigger. However, we also highlight growing risks related to the coronavirus outbreak, which has started affecting more European countries, reducing demand for air travel.”