Avianca Holdings reported operating income of USD 1.07 billion

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The FINANCIAL — During the first quarter of 2017, Avianca Holdings S.A. reported operating income1 of US$1.07 billion, a 9.3% increment compared to the first quarter of 2016.

The company informed that net adjusted profit, excluding special items, was USD25.6 million, an increment compared to the first quarter of 2016 with USD21.3 million. In this way, the net adjusted margin was 2.4%, a 2.1 percentage points increment compared to the same period in 2016. Operating profit (EBIT1) was USD 70.3 million with an operating margin of 6.6%. The company reported a net profit of USD 20.5. million, USD3.2 million more than what was reported during the same term on the previous year, according to Avianca.

These results are a consequence of increased passenger traffic and continued recovery of revenue passenger kilometers indicators, as well as a better performance of the cargo operation that registered an increment of 10.9%, as well as other complementary activities: greater income from miles redemption. On its part, and in line with the larger passenger and cargo volume, operating costs registered a 10.2% increment.

During the first quarter of this year, yields (revenue passenger divided by revenue passenger kilometers (RPKs) were equivalent to 8.6 cents, a 1.0% decrease compared to the first quarter of 2016. This is a smaller annual decrease since yields started to decrease to double-digit figures at the beginning of 2015. This trend was supported by a 10.1% increase in traffic numbers (RPKs) during the first quarter of 2017.

During the same period, adjusted cost of available seat-kilometer (CASK)1 increased by 4.1%, going from 7.9 during the January – March period of 2016 to 8.2 cents. This was mainly a result of a 30.8% increment of jet fuel, an 18.8% increment to air traffic expenses and a 7.4% increment on salaries. These increments where partially compensated by a 9.5% decrease in maintenance and repair costs. In this way, cost per available seat kilometer excluding fuel (CASK adjusted) decreased by 1.4%.

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Earnings before interest, taxes, depreciation, amortization and rent EBITDA1 was US$218.1 million, while the EBITDAR margin was 20.4%, a 15.6 percentage points decrease compared to the same term in 2016.

Capacity measured in ASKs (available seat kilometers) grew 5.9%, mainly due to the annualized effect of the capacity increment to Europe carried out during 2016, as well as the addition of seven weekly frequencies between Colombia and Spain.

It should be noted that the company is experiencing a solid passenger traffic performance on international routes, particularly on those with Europe and South America as destination. Passenger traffic measured in RPKs (revenue passenger kilometers) grew 10.1%, reaching a consolidated occupancy factor of 81.9%.

Modernization of the aircraft fleet was high during the first quarter of 2017 with the inclusion of a new Boeing 787-8 DreamLiner and an Airbus A300F exclusively for cargo. In this way, Avianca Holdings S.A. and its subsidiaries closed the quarter with an operating fleet of 181 aircraft.


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