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This Week's News
TTW - Malaysia Aviation Group Commits to Top Global Airline Status by 2030 with New Training Initiatives - 27/4/2024
Today marks a significant milestone for Malaysia Aviation Group (MAG) with the inauguration of its new MAB Academy campus and the commencement of construction for the Flight Simulator Building at the South Support Zone, Sepang.
For the complete story, see: https://www.travelandtourworld.com/news/article/malaysia-aviation-group-commits-to-top-global-airline-status-by-2030-with-new-training-initiatives/
Morocco World News - Morocco's Aviation Industry Aiming to Become Africa's Manufacturing Hub - 25/4/2024
Morocco is making a bold play to become a global hub for aviation manufacturing, leveraging its cost-effective workforce and strong industry partnerships to attract major players
For the complete story, see: https://www.moroccoworldnews.com/2024/04/362298/moroccos-aviation-industry-aiming-to-become-africas-manufacturing-hub
Forbes Advisor - The Best Cards That Offer Global Entry, TSA PreCheck and Clear - 24/4/2024
No one likes waiting in line. But when it comes to airport security checkpoints, there is a workaround to fast-track the experience.
For the complete story, see: https://www.forbes.com/advisor/credit-cards/credit-cards-with-global-entry-tsa-precheck/
Other Stories
Business Wire - Saudia Launches Beta Version of Revolutionary Digital Platform - 24/4/2024
Thales - Niels Steenstrup Appointed Ceo Of Thales Inflyt Experience - 23/4/2024
Reuters - Airlines suspend flights due to Middle East tensions - 20/4/2024
Global Times - China-Germany business travel picking up, says Lufthansa CEO - 19/4/2024
Yahoo Movies - AirAsia to sell tickets on other airlines as part of online push - 19/4/2024
Media Releases
No new media release for this week.
Latest Research
The impacts of COVID-19 on the global airline industry: An event study approach - By Sakkakom Maneenop and Suntichai Kotcharin
Industry Overview
2024 Aviation Industry Review & Outlook
The International Air Transport Association (IATA)
IATA - Africa & Middle East (AME)
IATA - Asia Pacific
IATA - Europe
IATA - North Asia
IATA - The Americas
Overviews of Leading Companies
Aeroflot Russian Airlines (MICEX: AFLT)
Air Canada (TSX: AC)
Air China (SHA: 601111)
Air France (EPA: AF)
Air France - KLM Group (EPA: AF)
Air New Zealand (ASX: AIZ)
Alaska Airlines (NYSE: ALK)
All Nippon Airways (TSE: 9202)
American Airlines (NASDAQ: AAL)
British Airways (LSE: BAY)
Cathay Pacific (HKEX: 0293)
China Eastern Airlines (SHA: 600115)
China Southern Airlines (SHA: 600029)
Delta Air Lines (NYSE: DAL)
Easy Jet (LON: EZJ)
Emirates
Etihad Airways
EVA Air (TPE: 2618)
Finnair (HEL: FIA1S)
Hawaiian Airlines (NASDAQ: HA)
IndiGo (BSE: 539448)
International Airlines Group (LSE: IAG)
Japan Airlines (TSE: 9201)
KLM (EPA: AF)
Korean Airlines (KRX: 003940)
Lufthansa (DAX: LHA)
Qantas Group (ASX: QAN)
Qatar Airways
Ryanair (LON: RYA)
Singapore Airlines (SGX: C6L)
Southwest Airlines (NYSE: LUV)
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United Airlines (NASDAQ: UAL)
Virgin Atlantic
Virgin Australia
Associate: Emillia Edwin
News and Commentary
TTW - Malaysia Aviation Group Commits to Top Global Airline Status by 2030 with New Training Initiatives - 27/4/2024
Today marks a significant milestone for Malaysia Aviation Group (MAG) with the inauguration of its new MAB Academy campus and the commencement of construction for the Flight Simulator Building at the South Support Zone, Sepang.
For the complete story, see: https://www.travelandtourworld.com/news/article/malaysia-aviation-group-commits-to-top-global-airline-status-by-2030-with-new-training-initiatives/
Morocco World News - Morocco's Aviation Industry Aiming to Become Africa's Manufacturing Hub - 25/4/2024
Morocco is making a bold play to become a global hub for aviation manufacturing, leveraging its cost-effective workforce and strong industry partnerships to attract major players
For the complete story, see: https://www.moroccoworldnews.com/2024/04/362298/moroccos-aviation-industry-aiming-to-become-africas-manufacturing-hub
Forbes Advisor - The Best Cards That Offer Global Entry, TSA PreCheck and Clear - 24/4/2024
No one likes waiting in line. But when it comes to airport security checkpoints, there is a workaround to fast-track the experience.
For the complete story, see: https://www.forbes.com/advisor/credit-cards/credit-cards-with-global-entry-tsa-precheck/
Business Wire - Saudia Launches Beta Version of Revolutionary Digital Platform - 24/4/2024
As part of a 2-year plan to reshape the airline travel industry.
For the complete story, see: https://www.businesswire.com/news/home/20240424688448/en/Saudia-Launches-Beta-Version-of-Revolutionary-Digital-Platform
Thales - Niels Steenstrup Appointed Ceo Of Thales Inflyt Experience - 23/4/2024
Niels Steenstrup joins Thales with 35 years of international business experience building high-performing global enterprises.
For the complete story, see: https://www.thalesgroup.com/en/countries-americas/united-states/press_release/niels-steenstrup-appointed-ceo-thales-inflyt
Reuters - Airlines suspend flights due to Middle East tensions - 20/4/2024
Global airlines changed flight routes over Iran, canceled some flights, diverted others to alternate airports or returned planes to the points of departure on Friday, as Israel's reported attack on Iran lead to airspace and airport closures and security concerns.
For the complete story, see: https://www.reuters.com/world/airlines-suspend-flights-due-middle-east-tensions-2024-04-15/
Global Times - China-Germany business travel picking up, says Lufthansa CEO - 19/4/2024
"Business travel between China and Germany is picking up, and I strongly believe that German corporates are dedicated and committed to the Chinese economy," said Jens Ritter, CEO of Lufthansa Airlines, in Shanghai on Friday.
For the complete story, see: https://www.globaltimes.cn/page/202404/1310931.shtml
Yahoo Movies - AirAsia to sell tickets on other airlines as part of online push - 19/4/2024
Malaysian budget carrier AirAsia Group Bhd said on Friday it would sell flights on more than 100 other global airlines as part of a push to boost revenues.
For the complete story, see: https://uk.movies.yahoo.com/movies/airasia-sell-tickets-other-airlines-075111528.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAIJ8Td48gWmlHtGl9-t4z0jPmqP1P_-p8c-Mu9lomE_QnQmQOu6jTh5eyd3EvsktuRu7zVg3e15XJuqKTplEvEas_LEHJKpe2p55ZzbMnyu8cC14qSUMGXd_qffjCuknv505SGcX-klR4mb7qeWqaRwoV7mNjR_fQ9Fkxaqrb308
Media Releases
No new media release for this week.
Latest Research
The economic value rationale of fuel hedging: An empirical perspective from the global airline industry
E.Samundera, J.K Perret and G.Geller
Abstract
The airline industry continues to face external shocks such as oil spikes which continue to put downward pressure on an airline's operating model and fuel prices remains the industry's wild card. Due to the cyclicality nature of the industry, risk of commodity price (oil) exposure significantly impacts the airlines' performance outcomes.
In this study, the traditional literature that underpins airline fuel hedging within a global setting is re-visited. The results from the existing literature are considered when conceptualizing a model that describes the impact of fuel hedging on a carriers's firm value using two measures, i.e. stock prices and Tobin's Q. Aside from the primary effects of fuel price hedging the study considers tertiary effects emitted by the origin and type of carrier. Combining these three aspects into a comprehensive study, contrasting legacy and low-costs at the same time as European and US carriers, over a horizon of nine years provides to the existing literature.
The results of the study strengthen previous studies that report a limited impact of fuel hedging endeavors on operators' firm performance, ceteris paribus. These effects are slightly mitigated by the origin and the type of operator (legacy vs. low-cost) as well as tertiary control variables. As a consequence for practitioners, hedging may be seen as a tool of risk mitigation but not as a tool to strengthen an airlines firm value.
https://www.sciencedirect.com/science/article/pii/S0969699722001430
The Industry
2024 Aviation Industry Review & Outlook
Commercial aviation produced a strong performance in 2023, leaving COVID-19 firmly in the rear-view mirror. What are our predictions for the aviation industry for the coming 12 months?
War and conflict have replaced pestilence as headline issues on the world stage, keeping economic and political uncertainty at an uncomfortably high level throughout 2023 and likely to stay elevated throughout 2024. Although the threat of a global economic recession has, for the moment, receded and interest rates and inflation have both passed their recent peaks, supply chain bottlenecks and the availability and cost of key commodities, manufactures and skilled personnel continue to apply headwinds to economic growth and to many industries, not least the aviation sector.
The expansion of regional trouble spots during 2023 marks a worrying raising of the stakes for global security. The continued war in Ukraine coupled with tensions in the Middle East are increasing global uncertainties. Coupled with unprecedented water shortages affecting the Panama Canal, the cost of seaborne cargo shipments has rocketed in recent months to reflect increased transit times and shipping costs for goods moving from Asia to Europe and North America in particular. Airlines also continue to face operational challenges and increased costs due to the closure of Russian airspace, which will be a fact of life for the foreseeable future.
Two of the largest global economies have been making news during 2023. China and India have now officially swapped places in the global population rankings and the Indian economy has been performing very strongly, while China continues to wrestle with the challenge of hitting critical GDP growth targets. Together, the two countries generate more than 50% of Asia's total GDP and, measured by GDP purchasing power parity, China is in first place globally, with India ranked third. Both will greatly influence global economic performance over the coming years, even starting to eclipse the impact of the USA, which risks becoming more insular depending on the outcome of the 2024 presidential race. This is one of more than 60 national elections to be held in 2024, many of which could usher in radical new social and economic policies as electorates become more polarised - Argentina being a recent example.
Surging demand for passenger air travel benefited all air travel markets and regions in 2023 as the remaining COVID-related constraints were lifted and travel freedoms were reestablished. However, many airlines have been unable to mount their planned responses to this demand due to a mix of supply chain, infrastructure and labour shortages. In addition, the air freight market remains weak, with cargo tonnage down by 5% compared to 2022, accompanied by a 32% reduction in average yield. Nevertheless, IATA estimates a $23bn net profit for the airline industry in 2023, with a small improvement forecast for 2024.
The airlines
2023 marked a clear turning point for the airline industry as passenger demand continued to rebound strongly from COVID-19. Asian airlines are still behind the recovery curve compared to Europe and North America, but their rebound is now well under way, with regional passenger capacity back close to 80% of the 2019 level by the end of the third quarter, in no small part aided by the reopening of China.
Premium travel demand came back strongly in 2023, providing the full-service airlines with a welcome boost to their revenues and profitability. Operators have benefited from a meaningful trading up of leisure travellers from economy to premium cabins, especially in long-haul markets, as the air travel "experience" is increasingly considered part of post-COVID vacations. Across the industry, the constrained capacity situation has led to load factors running at, or slightly above, pre-COVID levels throughout 2023.
All of these tailwinds resulted in an expected industry operating profit of US$41bn and a net profit of US$23bn, according to IATA's recent Global Outlook paper. This is a remarkable performance that speaks volumes for the resilience and adaptability of the industry as well as the undisputed global demand and need for air travel.
This outcome is materially ahead of mid-year expectations largely due to the airlines' ability to pass on cost increases to passengers which, on top of the demand-driven pricing opportunity, resulted in fares that in many markets were 20-30% higher than pre-COVID. However, it should also be noted that real average fares remained 40% lower than a decade earlier and the achieved profitability equates to less than US$5.50 per passenger, leaving airlines with no choice but to maintain a relentless focus on costs and efficiency. This is currently even more challenging than in the past, given the shortages of skilled staff and widespread wage inflation driven by the macro-economic landscape, coupled with higher debt service costs and lease rates.
One key metric that delivered a material tailwind to the industry in 2023 was a 20% reduction in the average price of jet fuel, which closed the year below $2.50 per USG. Unfortunately, the crack spread remained stubbornly high, adding 85c to every gallon, or almost 50% on top of the unrefined price. Again, it seems likely that the spread will remain elevated throughout 2024 and the IMF expects little movement in the average crude oil price until 2025.
North American and European airlines continued to deliver the strongest economic performance, together accounting for more than 90% of total industry profits. The Middle East has experienced one of the strongest traffic recoveries and also enjoys the lowest break-even load factor at less than 60%. Asia Pacific airlines are expected to break even in 2023, with other regions still loss-making.
Global passenger numbers rebounded by a further 23% in 2023, to 4.3bn, which is within 5% of the 2019 pre-COVID level. Over the same period, revenue passenger kilometres (RPKs) increased by 38%, the higher rate reflecting the delayed return of long-haul travel and consequently longer stage lengths.
Domestic travel has recovered faster and further than international traffic. Aggregate January to November domestic RPKs (reported by IATA) were 3.7% ahead of 2019, while international RPKs still lagged by 13%, for an overall industry shortfall of 9%.
By region, passenger volumes in the Americas have recovered the most, exceeding 2019 RPK levels in the 11 months to November. Other regions, including Europe, are still 10-15% shy of 2019.
It is arguable, however, that measuring traffic levels relative to 2019 is misleading, since this fails to account for the underlying growth trend that would, in normal market conditions, have added between 15-20% compound growth over the intervening four years. On that reckoning there is still some way to go and, although a full global return to pre-COVID levels will occur in 2024, recovering the lost growth will probably not occur much before the end of the decade.
The delayed recovery in Asia Pacific is linked to what has been happening in China's aviation market since the remaining COVID-19 restrictions were removed at the end of 2022. In the first ten months of 2023, Chinese domestic passenger numbers increased by 127% compared to the same period in 2022 (according to CAAC statistics), to a level slightly more than 1% above the 2019 pre-COVID numbers. International passenger traffic has been far weaker, however, in part due to a restriction on the number of outbound leisure travel visas issued and, for inbound travel, a requirement for pre-entry COVID-19 testing that was only dropped in August. Consequently, the total number of international passenger journeys were still 65% below the 2019 level, at almost 22m from January to October compared to 62m.
In a move to expand inbound visitor levels, China recently announced additional visa-free entry for tourists from a number of additional countries, including Ireland, Thailand, France, Germany, Italy, Malaysia, the Netherlands, and Spain. However, given the broader economic backdrop, a full recovery may not be achieved in 2024 with implications for the wider intra-Asian travel market given the previously heavy traffic flows from China to Vietnam, Thailand etc.
For India, another key Asian market, 2023 was a significant year during which the "new" Air India further consolidated its multi-branded operations and placed one of the largest new aircraft orders of recent times. The expanded and recapitalised Air India Group took a 28% share of the domestic passenger market in the first 11 months of 2023 (according to India's DGCA), still well behind Indigo's 59% share but leaving the remaining domestic operators in the shade. A combination of elevated market and operational pressures has taken its toll among the ranks, with GoAir forced to suspend operations in May and Spicejet requiring a substantial equity infusion.
Air India placed orders for 470 aircraft during 2023, with delivery dates extending out to 2030. 70 of these are widebodies that will be put to good use rebuilding Air India's international network and recapturing market share from non-Indian carriers. The rest are single aisle aircraft which will operate on domestic and regional routes alongside 500 new A320neo family aircraft ordered by Indigo in 2023. In a market where over-capacity regularly delivers an existential challenge, the induction of these huge capacity increases will need to be rigorously managed to profitably tap the substantial market growth potential that undoubtedly exists over the coming decade.
In contrast, mainland Chinese airlines did not place any orders for western aircraft in 2023, preferring to support the domestic industry by adding 40 ARJ21s and 160 C919s to the backlog. This may reflect ongoing political tensions, especially with the US, or perhaps is linked to the fact that the major Chinese airlines continued to lose money in 2023 in a challenging economic environment. The fact remains, however, that China is substantially under-ordered and, with western original equipment manufacturer (OEM) production largely sold out through the rest of the decade, will become increasingly reliant on lessor availability to support growth and fleet replacement. Despite declared ambitions, the scaling up of C919 production will not realistically come close to plugging the gap.
The last region worthy of a special mention is the Middle East, where traffic recovery has been strong enough to support an accelerated return of the Emirates' A380 fleet, with almost 70% back in service by year-end. 2023 saw the beginning of Saudi Arabia's new commercial aviation transformation strategy, with Saudia and Riyadh Air each placing orders for 39 widebody aircraft with an estimated combined value of over $10bn. The orders are linked to an ambition to develop inbound tourism beyond the pilgrimage market and to create alternative gateways to those already successfully operating in the region.
Inactive fleets
The level of stored passenger aircraft continued to fall throughout the past year, from 5,600 at the start of the year (19% of the fleet) to 3,900 by 31 December (13%). Within the overall numbers, the single aisle passenger storage level had fallen to 9.3%, with twin aisles at 14% following the biggest year-on-year reduction. The level of stored regional aircraft remained stubbornly high, at 25%, but these numbers still include over 400 50-seat RJs, accounting for one-third of the fleet, most of which have already been retired from airline operations and are awaiting part-out.
The age profile of inactive fleets remains highly skewed towards older models, with over 60% being 15 years or older. Many of the latter have already been retired from airline service and have been stored prior to part-out.
The storage levels for younger fleets would likely be even lower but for the need for maintenance prior to re-entering service. One of the consequences of the airlines' focus on cost conservation during the COVID-19 pandemic was the widespread deferral of airframe and engine maintenance events, which resulted in a growing bottleneck at maintenance, repair and overhaul facilities (MROs) and engine shops as the tide turned and airlines sought to reactivate their fleets. The delays in accessing maintenance resources are now magnifying the mismatch of hangar and shop capacity to rising demand, with the situation at engine shops further exacerbated by the requirement to inspect hundreds of geared turbofan (GTF) engines and the emerging pattern of more frequent shop visits for both GTF and Leap engines compared to their previous generation powerplants. The typical transit time for a single aisle engine shop visit, including the wait to enter the shop, is now reported to be at an unprecedented 250-300 days.
At the end of 2023, the lowest fleet storage rates were for 737MAXs (2%), 787s (3%), A350s (4%), 737NGs (4.5%) and A320 family (9%). The highest include 777s (13%), A330s (17%) and A380s (31%).
However, within the A320 family there is a large and growing discrepancy in the proportion of inactive GTF-powered Neos compared to other sub-fleets, with over 300 examples (22%) currently parked—the corresponding number for the LEAP-powered fleet is 3.5%. The impact of the GTF problems is also reflected in the A220 fleet, where 15% are currently inactive.
The lessors
2023 has been a stand-out year for aircraft lessors with COVID-19 firmly in the rear-view mirror, very strong demand for aircraft and substantial improvements in lease rates, all of which led to strong profitability.
Leasing continues to be the dominant source of financing for new aircraft deliveries, despite taking a lower share than in recent years (albeit likely to be higher than the 52% currently reported due to the lag in capturing these transactions in industry fleet databases).
Lessors contributed an estimated $40bn of delivery financing in 2023, with a further $6.5bn in used aircraft sale and leaseback transactions.
One reason for the lower lessor share is that some airlines that would normally utilise sale-and-leaseback (SLB) financing have instead been using cash reserves either generated during the recent much improved revenue environment or from unutilised liquidity facilities secured during the COVID-19 pandemic.
Another reason for the reduction may be an increase in the use of finance leases, previously used mainly by Chinese airlines and lessors. Recently, lessors such as BOCA have been broadening their product offerings to include finance leases for stronger credit airlines - a route that was recently taken by Air India for their new A350 financings utilising India's GIFT City facility, which is attracting a growing number of domestic and international lenders and lessors and will potentially become a game-changer for Indian aviation finance over the longer term.
On the subject of leasing in China, there was a good deal of speculation at the start of 2023 on a reported pivot of Chinese lessors to concentrate their activity in China and reduce international exposure. While this did not materialise to a significant degree, there have been examples of western lessors selling down their Chinese exposures to Chinese lessors and, at the same time, dollar borrowing costs have become more expensive for Chinese lessors due to China's weaker economic outlook and rating, leading to an economics-driven shift away from international lessees.
A flurry of activity towards the end of 2023 saw a number of financial settlements between Russian airlines and western lessors with outstanding insurance claims following the illegal expropriation of their aircraft. More than $2.5bn dollars has been recovered by at least eight lessors relating to around 100 aircraft. The settlements were agreed and paid out by Russian state insurance company NSK, which is not sanctioned, with ownership of the aircraft then passing to the Russian airlines, predominantly Aeroflot, Ural Air and S7.
The shortage of new capacity coming into the market has materially increased demand for existing lessor product. All lessors have seen a significant increase in the proportion of maturing leases that are being extended to lock in capacity and, with almost all excess young and mid-life A320ceo and 737-800 availability placed, higher lease rates are being achieved across the board. As demand outstrips supply, lessors have also been able to improve portfolio credit quality by avoiding placements to weaker airlines and, indeed, declining to extend leases where better quality alternatives exist.
As lease rates and lessee profile quality improve and availability dwindles, aircraft values have been improving, especially over the second half of 2023. Mid to high single digit percentage improvements in young new generation single aisle types have been outpaced by increases of up to 25% and more for mid-life A320ceos and 737NGs, for example, compared to mid-COVID values. Widebody values have also started to move up, for the same reasons, less dramatically so far due to their lagged operational recovery, but with considerable runway left for further improvement in 2024. At the older end of the market, economic lives are being extended to help bridge the capacity shortfall, which again is having a positive impact on values.
The OEMS
Supply chain and production quality issues continued to apply the brakes on deliveries throughout 2023, with several new problems coming to light in the Boeing camp and some serious engine performance and quality failures, most notably on Pratt & Whitney's Geared Turbofan, that taken together will curb airframer production rate ambitions for several years to come. The most recent MAX incident, when a plug door blew out in early January, will have lasting consequences for Boeing's ability to certify and deliver aircraft and on airline and traveller confidence.
The traditional year-end rivalry to secure the most commercial airliner deliveries has been skewed for a while now and was again won convincingly by Airbus in 2023, with 729 deliveries compared to Boeing's tally of 505. Within the totals, Airbus delivered 636 single aisle and 93 widebodies, while Boeing handed over 387 737MAX and 118 widebodies.
The competition for new orders generated a great deal more momentum which took them past 2014's record booking level, to a new high of over 4,000 firm orders.
Airbus secured 57% of the total with 2,310 gross orders, with Boeing taking 1,426 (35%). Net orders after cancellations and model changes were 2,094 and 1,314 respectively. Embraer and ATR together booked slightly more than 100 firm orders, representing 3% of the total, while Comac accounted for 5% with an additional 160 C919s and 40 ARJs.
An estimated combined current market value of $275bn also set a new record, beating the previous high by 25%. Most of the orders came at or after the Paris air show and in the final quarter, with little activity from January to May.
The largest orders came from Air India, Indigo, Emirates and Turkish Airlines, each of which placed orders valued at over $20bn at current market values. Air India's 470 aircraft, $31bn fleet regeneration initiative is also the largest scale single year order ever placed by value, even taking account of inflation.
Several lessors topped up their backlogs with orders for 368 aircraft valued at $18bn, despite the challenge of finding delivery slots in the next five years. Lessor backlogs comprise 15% of the OEMs' total, well below historical levels.
The demand side of the equation is looking extremely robust for the western OEMs well into the future, with an average of 7.5 years' production on backlog (a total of 14,800 aircraft) and 2023 generated an average book-to-bill of 2.9.
The profile of the orderbook has evolved over recent years, with the lessor share of backlogs at Airbus and Boeing below 20% and the lessor mix more concentrated in the large, experienced players - 50% of the lessor backlog is with five lessors. The regional distribution of airline orders has also been changing to reflect the lack of recent orders from China. This has resulted in the proportion of backlog delivering into Asia Pacific falling from over 40% to 36% - still the largest customer base, despite the Chinese airline backlog of western aircraft representing only 5% of the total. North American carriers hold 21% of the backlog and Europeans 17%.
With the pressure on to raise production rates in line with demand, the ability to build aircraft that meet fundamental safety and quality requirements, which should be an absolute given, too often continues to fall short. Supply chains remain broken, and production will consequently continue to fall short of where it needs to be throughout 2024 and beyond. A delivery shortfall of almost 4,000 aircraft has built up since the start of COVID-19, with no prospect of recovering this loss in the future. Furthermore, delivery delays have become the norm and, although gradually improving, will continue to impact the airlines' ability to manage their network operations and lessors to manage their portfolio and balance sheet growth.
While Airbus, CFM and others are not blameless in this regard (indeed, the challenges and scale of the industry imply that a 100% pass rate is an impossible target), serious questions are rightly being asked in particular of Boeing, Spirit AeroSystems and Pratt & Whitney. Whether the issues arise from corporate culture, insufficient oversight and control of supply chains, skilled manpower shortages or over-expansion, the solutions are still in the making and frustratingly elusive.
Boeing's relationship with the FAA remains fragile, with an obvious shortfall in the necessary levels of trust, which impacts not only production and delivery of current products but also the approval and certification of new ones, including variants. Boeing must urgently find a way back to prioritising the engineering fundamentals of their business. Their relationship with Spirit, for whom they are by far the largest customer, will need to be much closer going forward, with the focus on technical excellence instead of cost reduction.
Spirit received some positive news at the end of September with the installation of Pat Shanahan as CEO. Shanahan comes with a strong track record of over 30 years' experience at Boeing, where he played a key role in getting the 787 program back on track more than a decade ago prior to a stint in charge of supply chain. Despite his deep experience, however, Spirit will likely be his toughest challenge to date.
Pratt & Whitney's new parent must be wondering what they invested in as the estimate of potential penalty and rectification payments for virtually all the GTFs so far delivered continues to rise. In addition, they will need to factor in the loss of customer confidence and goodwill which, at the very least, will affect their share of new engine orders to be won over the next several years.
Aircraft trading
For the majority of lessors and aircraft owners, trading had become a core component of asset management and an important profit generator well before the onset of COVID-19, with non-SLB trading volumes [1] approaching $20bn per annum from 2016 to 2019. Unsurprisingly, this fell by two-thirds in 2020 but has since recovered, although still 25% below the previous peak. The big drop can be easily understood, but the slower rate of recovery, especially in 2023, which was flat compared to 2022, is reflective of the shortfall in new aircraft delivering directly to the lessors or available for sale and leaseback which has driven lessors to retain assets that would otherwise have been on the docket for sale, in order to maintain balance sheet and revenue volumes.
Where trading has been taking place, in many cases the objective has been to recycle capital rather than specifically to harvest profits, thereby reducing the requirement to raise debt in the prevailing elevated interest rate environment. Now interest rates appear to have passed the peak, investors will be more comfortable pricing transactions in 2024, which should ensure that trading activity continues to recover strongly.
[1] Trades excluding aircraft over 15 years old, sales by airlines and non-financial owners, and sales for part-out.
The money
The availability of both debt and equity is still below pre-COVID-19 levels due to a combination of macro-economic and fiscal uncertainty, broad concerns around the aviation sector in particular and perceived better value to be found in other sectors. However, the industry is still securing substantial amounts of capital for delivery financing, estimated at around $83bn in 2023.
The traditional aviation lenders are largely back in the market, with competitive rates available in scale for the right assets and stronger counterparties. They are increasingly being augmented by alternative lenders, which in many cases are drawing on private equity funds and taking a broader view on asset quality, albeit with an appropriate risk premium, consequently finding strong traction with acquirers of mid-life aircraft in particular. The bond markets also remain open for business, although pricing here has generally moved up further than for vanilla debt.
Notwithstanding the availability, lessors have shown a reduced appetite to lock in long term financing or refinancing in the debt capital markets due to the high interest rate environment and an expectation that rates will fall over the next one to two years. Selling assets to recycle capital has become more prevalent, especially for the larger players.
SLB lease rates are now pricing in the higher interest rates, but this has lagged more than has been the case for aircraft lease placements, given the still competitive nature of the market. Over the past 18 months or so, large pools of capital that were accumulated and financed at interest rates that predated the current run-up have been largely deployed and that competitive advantage will likely disappear during 2024.
The asset-backed securities (ABS) market saw just two transactions in 2023 - a portfolio of engines from Willis and an aircraft loan portfolio from Ashland Place. The outlook for 2024 is for an increase in activity but falling well short of peak pre-COVID levels. Loan portfolios are also likely to become more prevalent in the mix.
The Japanese operating lease (JOL) and Japanese operating leases with call option (JOLCO) market has seen more activity over the past 12 months, sustained by Japanese investors that continue to have tax exposures to shelter. However, the softening of the Yen relative to the US dollar has been tempering investor appetite.
For investors, commercial aircraft assets and aircraft lessors have continued to demonstrate their resilience and ability to generate strong risk adjusted returns through extremely challenging market events, with lessors viewed as the lower cost, lower risk channel for financing the sector.
Those investors that are already committed to the sector have, by and large, shown their willingness to remain invested or to increase their exposures. A small number have elected to exit the space, such as Ares Management, which is in the process of divesting VMO Air. However new entrants like AIP Capital continue to emerge and, alongside the deep resources and ambitions of the likes of Saudi sovereign fund PIF, help to bridge the so-called funding gap.
The environment
So much has been debated, researched, published and invested on the subject of commercial aviation sustainability over the past 12 months that it would take a dedicated white paper to do justice to the breadth and complexity of the issues. Instead, the statement reproduced below, which was published in June 2023 by the Chief Technical Officers of seven of the world's major aerospace OEMs [2], admirably sums up the challenges and initiatives that are engaging many of the keenest technical minds across multiple disciplines:
"We are unified in the proposition that our industry has a prosperous and more sustainable future, and that we can make it happen through the near-term implementation of lasting industry-wide and globalized harmonized policies."
"Over a decade ago the aviation industry was the first global sector to set ambitious emission reduction goals. Today, we come together again to support the industry's commitment to achieving net zero carbon emissions for civil aviation by 2050 and to highlight the importance of the production, distribution, and availability of qualified Sustainable Aviation Fuel (SAF) needed to achieve this goal. The development of fuel-efficient aircraft technologies has been a priority for the aviation industry for over 50 years and remains a priority. Greater uptake of SAF would mitigate the projected growth in aviation CO2 emissions as the customer demand for global air travel increases.
Our companies are steadfast in delivering the technical solutions required to reduce the carbon emissions of the air transportation sector through our work in three key areas:
- Developing advanced aircraft and propulsion technologies that enable net-zero carbon emissions while maintaining the safety and quality standards of our industry;
- Implementing improvements in aircraft operations and infrastructure; and
- Supporting policies and measures that accelerate the availability and adoption of qualified SAF.
Increasing the production and utilization of SAF is a critical step for achieving the air transportation sector's net zero CO2 emissions goal by 2050. However, the production of SAF is currently estimated at less than 0.1% of the global demand for jet fuel today. Moreover, SAF prices are typically two to five times higher than the price of conventional jet fuel. The supply is further constrained by competition for renewable fuels from other sectors that have alternative decarbonization options, such as with surface transportation and heating.
We support government policies and initiatives that stimulate investment in production capacity, reduce costs, and encourage greater industry uptake. This includes the US Inflation Reduction Act of 2022 (IRA), which provides a blender's tax credit. The IRA also authorizes funding to support advanced technologies and infrastructure that enable expanded SAF production and distribution capacity in the US, as well as projects to develop fuel efficient aircraft or otherwise reduce emissions from flying. Public-Private Partnerships, such as the FAA FAST Tech Program, would enhance OEM adoption, testing, and technical clearance of new emerging SAF pathways to ensure seamless insertion into the commercial fleet.
Similarly, the CTOs welcome the political agreement found on ReFuelEU Aviation [3 ] which will provide a strong signal for the deployment of SAF in air transport, and look forward to the legislation being adopted as soon as possible. The EU needs to implement the right industrial support policies, within the Net Zero Industry Act, to accelerate the availability of SAF and synthetic kerosene at commercial scale, building on the work of the Industrial Alliance for Renewable and Low Carbon Fuels (RLCF). In addition, qualification efforts that support the development of co-processing technologies that can harness the existing capital infrastructure will accelerate the availability of SAF at commercial scale.
Public-Private Partnerships can play a key role in increasing the development and use of SAF through policy definition and alignment, along with financial incentives. Policymakers have the chance to accelerate these processes by providing sustained and predictable support to the multi-year development of novel technologies, and by stimulating the ramp-up of capacity. Recognizing the technical challenges associated with decarbonizing aviation, greater public policy and financial support to accelerate SAF production and distribution over fuels used for surface transportation is essential. Additionally, close collaboration with the aviation industry and fuel suppliers is required in the development of infrastructure and investment in SAF production capacity to accelerate availability in support of demand. Lastly, establishing standards for qualification of 100% SAF pathways that ensure full compatibility with engines and aircraft for civil and appropriate defence applications as they become available is essential.
We, as CTOs, are committed to supporting policies that increase the supply of SAF while ensuring a consistent and predictable demand through harmonised global measures. The aviation industry plays a pivotal role in modern life connecting people, economies, and nations. We are unified in the proposition that our industry has a prosperous and more sustainable future, and that we can make it happen through the near-term implementation of lasting industry-wide and globalized harmonized policies."
In Europe, preparations for the Corporate Sustainability Reporting Directive (CSRD) are underway, with mandatory reporting required from 2025 for the first tranche of affected companies. EU listed airlines and OEMs have just started their data collection and lessors will need to begin their preparation in earnest this year.
In November 2023, PwC's global Strategy& consulting group published a briefing paper, "From feedstock to flight - how to unlock the potential of SAF".
Outlook
Although airline profitability turned a corner in 2023, moving solidly back into the black, IATA expects only modest financial improvement in 2024, with $49bn in operating profit and a net profit of $25.75bn, held back by low yield growth, a higher cost base, especially labour costs and, at the net level, a higher debt service burden. However, the return on invested capital for airlines is still expected to come close to 5% this year and there is scope for the airlines to do better than forecast.
Passenger traffic will reach or surpass 2019 levels in all regions in 2024, but recovering the four years of lost growth will take a good deal longer. Air freight markets will remain relatively weak, with a recovery in volume growth, assisted by the disruption of seaborne cargo through the canals, partially offset by soft rates. With the return of more widebody belly capacity, the dedicated freighter operators will continue to face challenges.
Supply chain and quality issues will continue to frustrate OEM plans to increase production rates. Airbus and Boeing will improve on 2023 levels this year but remain stymied by events both within and outside their control. Overall delivery financing of between $105bn and $110bn will be required in 2024, with lessors providing more than 50%. Replacement of older fleets will continue to be delayed, with consequential benefits for aircraft values and lease rates.
The surge in orders experienced in 2023 will probably not be repeated in 2024, although this could change depending on the timing of additional orders from China, which remains heavily under-ordered.
2023 was the year when Generative AI entered mainstream public awareness and applications like ChatGPT demonstrated how the power of AI might be harnessed. 2024 will see a rapid expansion of AI integration into airline, OEM, MRO and leasing businesses that, over time, will facilitate a wide range of potential advances in areas such as airline fleet and network optimisation, predictive maintenance, development of digital twins to explore aircraft design and repairs, forecasting of maintenance events for lessors and ABS portfolios, airline interline payment settlement and sustainability reporting.
Naturally, in an industry where safety is paramount, with no room for error, implementing AI-based solutions will need to proceed with caution, often requiring close cooperation with regulators. AI will, nevertheless, transform many industry activities and deliver substantial efficiencies over the coming years.
To close, here are some more predictions for the coming 12 months:
- Airline profitability will exceed the IATA forecast, boosted by strong demand and robust pricing power
- Western OEMs will deliver more than 1,500 aircraft
- Aircraft values will recover further, with widebodies outpacing narrowbodies
- Expect to see more lessor consolidation, but few new entrants
- There will be a marked uptick in aircraft trading
- 737 Max 7 and 10 certification will not happen in 2024
- Investor appetite for aviation assets will increase, through direct lessor platform investments or via deployment of managed funds
- The burden of sustainability reporting will start to be felt by airlines, lessors and financiers
- 2024 will be the year when it becomes possible to see a real path to 5-10% SAF by 2030, through actual contracts and projects as opposed to theoretical ones
- Generative AI will become more widely used as the industry begins to explore its potential
https://www.pwc.ie/reports/aviation-industry-review.html
The International Air Transport Association (IATA)
About Us
The International Air Transport Association (IATA) is the trade association for the world's airlines, representing some 290 airlines or 82% of total air traffic. We support many areas of aviation activity and help formulate industry policy on critical aviation issues.
IATA is led by Alexandre de Juniac, Director General & CEO since September 2016 .
IATA's Structure
A guiding concept of IATA's structure is "Global Development, Regional Delivery", where the Head Office divisions drive the development of global standards, systems and advocacy positions, while the regional and country offices are responsible for implementation.
IATA's senior management, formed of regional and subject matter experts, sets the strategic direction of IATA under the leadership of IATA's Director General & CEO.
IATA's Regions Office
- Africa & Middle East (AME)
- Asia Pacific
- Europe
- North Asia
- The Americas
https://www.iata.org/en/about/
IATA - Africa & Middle East (AME)
IATA's regional office for the Africa and Middle East (AME) is based in Amman and, along with its four country clusters, sustains the extraordinary dynamism of the region by responding to the needs of member airlines, accredited travel and cargo agents as well as industry partners.
We maintain close relations with governments, their agencies, the International Civil Aviation Organization Middle East (ICAO-MID), the African Airlines Association (AFRAA), the Arab Air Carriers Organization (AACO) the African Civil Aviation Commission (AFCAC), the African Union, airports, air navigation service providers and regional airline associations.
For more information, see:
https://www.iata.org/en/about/worldwide/ame/
IATA - Asia Pacific
IATA Asia Pacific represents, serves and leads our airline members from our regional office in Singapore. From this office, the IATA team drives the industry's priorities in 37 countries with the support of 19 country and area offices, across 8 time zones. We also maintain close working relations with governments, airports, air navigation service providers and regional industry organizations.
IATA Asia Pacific is committed to:
- Reminding governments of the value that aviation brings, supporting over 30 million jobs and contributing over $700 billion in GDP in the region.
- Improving efficiency through our industry projects, such as Fast Travel and New Distribution Capability
- Laying the groundwork for a sustainable aviation industry
- Enhancing safety and capacity through initiatives to improve air traffic management.
- Settling funds for the aviation industry in a swift, reliable and efficient manner (close to $75 billion was settled for the Asia Pacific region in 2018)
- Developing human capital for tomorrow's air transport industry (some 1,900 aviation professionals from over 100 countries were trained at our IATA Asia Pacific's Regional Training Center in Singapore in 2018).
In 2017, IATA Singapore office became one of the four IATA Global Delivery Center (GDC) locations where the back office functions for IATA's Financial Settlement Systems (FSS) have been consolidated. The other locations are Beijing, Madrid, and Montreal.
For more information, see:
https://www.iata.org/en/about/worldwide/asia_pacific/
IATA - Europe
We represent, lead and serve the European airline industry, and focus on catering to the needs of our member airlines, accredited travel agents and industry partners.
IATA's regional office for Europe is based in Madrid, Spain and has a network of over 15 offices in both European Union and non-EU countries comprising, among others, Russia, Turkey, Israel, Ukraine and the Commonwealth of Independent States (CIS).
We maintain close relations with governments, agencies, the International Civil Aviation Organization (ICAO), European Union Institutions, EUROCONTROL, EASA, European Civil Aviation Conference (ECAC), regional airlines associations such as Airlines For Europe (A4E), European Business Aviation Association (EBAA), European Regions Airline Association (ERAA), Airlines International Representation in Europe (AIRE), as well as airports, and air navigation service providers.
IATA advocates for smarter regulation -minimizing the impact of tariff and non-tariff barriers and unnecessary and counter-productive taxation-, safety, security and connectivity. We also support our global operations and environment-related issues such as the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
For more information, see:
https://www.iata.org/en/about/worldwide/europe/
IATA - North Asia
China and North Asia's regional headquarters is based in Beijing and serves as a central point for IATA's member airlines in the region. The regional office also conducts government and industry affairs, promotes IATA's business products and services, prepares analysis and forecasting of developments in response to local policies.
The regional office provides essential support services for the Northern Asia area which includes People's Republic of China (PRC); Hong Kong (SAR), China; Macao (SAR) China; Chinese Taipei; State of Mongolia; and Democratic People's Republic of Korea (DPRK).
China and North Asia Regional Priorities:
- Safety: Safety is our number one priority. IATA is cooperating with aviation authorities, airport authorities and member airlines in the region to implement a Runway Safety Toolkit, to promote IATA Safety Audit for Ground Operation (ISAGO) and to continue the IOSA programme.
- Environment: Promote and support the Green Team visits to the carriers in the region for the fuel efficiency gap analysis, to reduce carbon dioxide emissions and enhance operation efficiency. Promote the Carbon Offset Program among the carriers in the region.
- Operations and Infrastructure: Implement route savings initiatives and ATM enhancements in the region, especially focusing on the Pearl River Delta region airspace improvements, flexible entry exit points implementation and ATS route restructuring.
- Settlement Systems: Working towards greater operational efficiency throughout the region in BSP's and CASS's. Specifically setting up a BSP in Mongolia and growing China CASS volume (UTP) by at least 50%.
For more information, see:
https://www.iata.org/en/about/worldwide/north_asia/
IATA - The Americas
IATA's Americas region is focused on serving the needs of nearly 49 member airlines spread across 22 countries in North, Central and South America. IATA's regional office in Miami is supported by ten field offices across the region.
Key areas of focus for the region include safety and security, sustainability, development of efficient and affordable infrastructure, smarter regulation and reducing the heavy taxes and charges imposed on aviation and air travel in many countries. In support of its activities, IATA works closely with regional and local airline associations, governments, safety regulators, airports and other key stakeholders.
The Americas team has developed a 5-year strategic plan for the region with input from key stakeholders across the region to tackle the largest opportunities and threats, creating common objectives and initiatives on which to focus through 2022.
For more information, see:
https://www.iata.org/en/about/worldwide/americas/
Leading Companies
Aeroflot Russian Airlines (MICEX: AFLT)
About Aeroflot
AEROFLOT is the leader of Russian civil aviation, the national carrier. The airline's CEO since April 8, 2022 is Sergei Aleksandrovsky.
- Aeroflot, founded on March 17, 1923, is one of the oldest airlines in the world and one of the most recognizable Russian brands .
- Aeroflot is based at Moscow Sheremetyevo Airport and opened its second international hub in Krasnoyarsk on May 31, 2021.
- Aeroflot Group is one of the largest aviation holdings in the world.
- In 2023, Aeroflot airline individually carried 25.2 million passengers, and Aeroflot Group as a whole carried 47.3 million.
- In September 2022, as part of the Eastern Economic Forum, Aeroflot and the United Aircraft Corporation (UAC, part of Rostec) signed the largest agreement in the modern history of civil aviation of intent to purchase 339 domestically produced aircraft - 210 MS-21 aircraft, 89 Superjet aircraft -NEW and 40 Tu-214 with delivery in the period from 2023 to 2030.
- Aeroflot annually wins in key categories of the national aviation awards "Wings of Russia" and Skyway Service Award.
- In 2017, Aeroflot was recognized as the strongest aviation brand in the world according to the independent agency Brand Finance. The company has confirmed first place in this rating five times.
- Aeroflot is one of the global industry leaders in terms of quality of passenger service. In 2016, for the high quality of service, it received "four stars" in the rating of Skytrax, a British consulting company that is considered the world's most authoritative evaluator of the level of airline and airport services.
- Nine times recognized as the best airline in Eastern Europe according to the Skytrax World Airline Awards.
- It is in the top 5 for punctuality among the world's largest airlines.
- In 2017, it was awarded the highest five-star rating from the American Aviation Association APEX, and in 2021 it confirmed this rating for the fourth time in a row.
- Aeroflot won the finals of the prestigious global World Travel Awards 2021. The airline received the main prize in the "Leading Aviation Brand in the World" category.
- Aeroflot is the winner of the Russian Traveler Awards 2023 in the Russian Airline category. The best airline in Russia was determined through open online voting.
- In 2022 and 2023, Aeroflot was included in the ranking of the best employers in Russia according to Forbes in the "gold" category.
- In 2023, Aeroflot was recognized as the most attractive HR brand in the Transport category of the Talentist award. The most attractive employers were determined through a large-scale all-Russian sociological study initiated by the presidential platform "Russia - the Land of Opportunities" and the ANCOR staffing group.
- Aeroflot has the largest Flight Control Center in Eastern Europe. He opened his own aviation school. Created a high-tech Situation Center, which, in the event of a failure or crisis, allows you to effectively manage production processes. He commissioned a hub control center, unique for Russia, Hub Control Center to coordinate the provision of connections for transit passengers and baggage and control the turnover of aircraft at the Sheremetyevo base airport. Implemented the Control Tower system for operational monitoring of production indicators in crisis situations.
- Aeroflot places a special emphasis on new information technologies as a powerful means of improving the quality of customer service and economic efficiency. Aeroflot's digitalization development areas include: increasing consumer satisfaction with the digital experience, continuously improving the efficiency and environmental friendliness of operations through digital technologies, increasing additional income through digital services and new business models, and ensuring the company's import independence. Aeroflot's active work and achievements in the field of digital transformation have been noted by Russian and international expert communities. The company is implementing promising projects, including those based on Big Data.
- Aeroflot Group works to ensure that its clients can quickly and comfortably travel vast distances, which means they can be mobile, meet more often, work successfully and see the world in all its diversity. At the same time, passengers have a wide choice thanks to an extensive route network and a multi-brand product offer. A special place is occupied by policies aimed at countering the COVID-19 pandemic, as well as measures aimed at maximizing the protection of the health of passengers and staff. In 2022, Aeroflot received "five stars" in the COVID-19 Safety Rating, confirming that the set of implemented anti-epidemic measures and passenger service procedures meet the highest international standard for safe air travel.
- Aeroflot published its Sustainable Development Report for the first time. The document has been prepared in accordance with the main version of the Global Sustainability Reporting Initiative (GRI Standards). The first separate non-financial report contains key performance indicators of Aeroflot Group from 2019 to 2021. They reflect an approach to sustainability management and show the airline's impact on the environment, as well as on the economy and society.
- Aeroflot joined the International Air Transport Association (IATA) in 1989.
https://www.aeroflot.ru/ru-ru/about/aeroflot_today/company_profile
14 March 2024
Aeroflot Group Announces Operating Results for February 2024
Aeroflot PJSC (Moscow Exchange ticker: AFLT) today announces Aeroflot Group operating results for February and 2M 2024.
February 2024 Key Highlights
- Aeroflot Group carried 3.7 million passengers, 23.2% up vs. February 2023.
- Aeroflot Group carried 2.8 million passengers in domestic segment, 17.9% up vs.
- February 2023.
- In international segment 894.8 thousand passengers were carried, 43.3% up vs.
- the same period of 2023.
- Group's RPK increased by 30.8%, ASK increased by 28.2% year-on-year.
- Passenger load factor is again at record levels and amounted to 89.2%, up by 1.7 p.p. year-on-year, in domestic segment — 91.5%, 2.6 p.p. up vs. February 2023 reflecting high demand
- for air transportation.
- Aeroflot Airlines carried 2.0 million passengers, 30.6% up vs. the same period of 2023. Aeroflot's RPK increased by 33.1% year-on-year.
For full financial report, see: https://ir.aeroflot.com/en/news/article/58233/
Air Canada (TSX:AC)
Air Canada at a glance
Air Canada is Canada's largest airline and the largest provider of scheduled passenger services in the Canadian market, the Canada-U.S. transborder market and in the international market to and from Canada. In 2019, Air Canada, together with its Air Canada Express regional partners, carried over 51 million passengers, offering direct passenger service to nearly 220 destinations on six continents. Air Canada is a founding member of Star Alliance™, providing the world's most comprehensive air transportation network.
Air Canada's predecessor, Trans-Canada Air Lines (TCA), inaugurated its first flight on September 1, 1937. The 50-minute flight aboard a Lockheed L-10A carried two passengers and mail between Vancouver and Seattle. By 1964, TCA had grown to become Canada's national airline; it changed its name to Air Canada. The airline became fully privatized in 1989. Air Canada shares are traded on the Toronto Stock Exchange (TSX:AC), and effective July 29, 2016, its Class A variable voting shares and Class B voting shares began trading on OTCQX International Premier in the U.S. under the single ticker symbol "ACDVF".
Air Canada is among the 20 largest airlines globally. Its corporate headquarters are located in Montreal.
https://www.aircanada.com/ca/en/aco/home/about/corporate-profile.html
16 February 2024
Air Canada Reports Fourth Quarter and Full Year 2023 Financial Results
- Record full year operating revenues of $21.833 billion, reflecting strong demand for air travel
- Full year operating income of $2.279 billion
- 2023 adjusted EBITDA* of $3.982 billion, at the high-end of guidance range
- 2023 cash from operating activities of $4.320 billion and free cash flow* of $2.756 billion
- Leverage ratio* of 1.1 at December 31, 2023, down from 5.1 at December 31, 2022
Air Canada today reported its fourth quarter and full year 2023 financial results
"Air Canada produced very strong results for the fourth quarter and full year 2023, delivering on its key financial goals and strategic priorities. For the full year, we had record operating revenues of $21.8 billion, up 32 per cent from 2022 as demand for air travel remained strong. Annual operating income was $2.3 billion; a $2.5 billion improvement from the previous year. Our adjusted EBITDA was nearly $4 billion; more than twice that of full year 2022. These results stem from the effective management, hard work and customer centric approach of everyone at Air Canada. I thank the entire team for their dedication as we safely transported more than 46 million passengers in 2023. The focus on operational improvements was evident as, even with the growth in traffic and ongoing supply chain challenges, our key operational metrics and customer satisfaction improved year over year," said Michael Rousseau, President and Chief Executive Officer of Air Canada
"We also took important steps during the year to enable ourselves to continue performing consistently as we remain firmly committed to our plan and to enhancing our level of customer service, improving our operational reliability, strategically adding to our key hubs and network and growing profitably. We strengthened our balance sheet, reduced our debt and, despite the continuing macroeconomic and structural cost pressures on our industry, our unit costs were contained within our adjusted CASM guidance. Additionally, we will continue to expand Aeroplan, a key driver of customer loyalty that has doubled its membership to eight million members over the last five years
"Our airline remains adaptable to changing business conditions, and is poised to take advantage of opportunities, giving us every confidence for the year ahead. As we look into the future, we aim to grow, deliver on our financial objectives and create long-term value for all stakeholders."
Fourth Quarter 2023 Financial Results
The following is an overview of Air Canada's results of operations and financial position for the fourth quarter 2023 compared to the fourth quarter 2022.
- Operating revenues of $5.175 billion increased $495 million or 11 per cent on an operated capacity growth of over 9 per cent year over year, close to the guidance provided in Air Canada's news release dated October 30, 2023.
- Operating expenses of $5.096 billion increased $388 million or 8 per cent. The increase was due to higher costs in nearly all line items reflecting higher operated capacity and traffic year over year, including higher wages, salaries and benefits. The increase was partially offset by lower aircraft fuel expense on a jet fuel price decline.
- Operating income of $79 million, with an operating margin of 1.5 per cent, improved $107 million.
- Adjusted EBITDA of $521 million, with an adjusted EBITDA margin* of 10.1 per cent, improved $132 million.
- Net income of $184 million and diluted earnings per share of $0.41 compared to a net income of $168 million and diluted earnings per share of $0.41.
- Adjusted net loss* of $44 million and adjusted loss per diluted share of $0.12 compared to an adjusted net loss of $217 million and adjusted loss per diluted share of $0.61.
- Adjusted CASM* of 14.25 cents compared to 13.68 cents, an increase of 4.1 per cent driven by higher salaries, wages and benefits expenses, higher maintenance costs and general inflationary pressures on certain line items.
- Net cash flows from operating activities of $985 million increased to $338 million.
- Free cash flow of $669 million increased $349 million.
Full Year 2023 Financial Results
The following is an overview of Air Canada's results of operations and financial position for the full year 2023 compared to the full year 2022.
- Operating revenues of $21.833 billion increased $5.277 billion or 32 per cent on approximately a 20 per cent growth in operated capacity. The capacity increase was in-line with the guidance provided in Air Canada's news release dated October 30, 2023.
- Operating expenses of $19.554 billion increased $2.811 billion or 17 per cent. The increase was primarily due to increases in all line items reflecting higher operated capacity and traffic year over year, including, higher salaries, wages and benefits. It also reflects the impact of a favourable maintenance cost adjustment of $159 million that was recorded in the first quarter of 2022.
- Operating income of $2.279 billion, with an operating margin of 10.4 per cent, improved $2.466 billion.
- Adjusted EBITDA of $3.982 billion, with an adjusted EBITDA margin* of 18.2 per cent, improved $2.525 billion, at the high end of the guidance provided in Air Canada's news release dated October 30, 2023.
- Net income of $2.276 billion and diluted earnings per share of $5.96 compared to a net loss of $1.7 billion and diluted loss per share of $4.75.
- Adjusted net income of $1.713 billion and adjusted earnings per diluted share of $4.56 compared to an adjusted net loss of $988 million and an adjusted loss per diluted share of $2.76.
- Adjusted CASM of 13.49 cents compared to 13.21 cents in 2022, a 2.2 per cent increase driven by higher traffic and selling costs correlated to higher revenues, higher labour costs, a favourable maintenance cost adjustment recorded in 2022, and inflationary pressure on certain line items. This was within the guidance range provided in Air Canada's news release dated October 30, 2023.
- Net cash flows from operating activities of $4.320 billion increased to $1.952 billion. • Free cash flow of $2.756 billion increased $1.960 billion.
- Net debt to adjusted EBITDA ratio* was 1.1 at December 31, 2023, an improvement from 5.1 as at December 31, 2022, due to the increase in adjusted EBITDA and a $2.9 billion reduction in net debt.
For full financial report, see: https://filecache.investorroom.com/mr5ircnw_aircanada/530/Q4_2023_Air_Canada_News_Release.pdf
Air China (SHA: 601111)
Company Profile
Today' s Air China can trace its origins to 1988 when Air China International Corporation was established. In October 2002, based on an industry reform plan formulated by the central government, Air China International Corporation, China Aviation Corporation and China Southwest Airlines merged, and the surviving company was still called Air China International Corporation. On September 30, 2004, Air China International Corporation was rebranded as Air China Limited. In December 2004 Air China Limited became a publicly traded company on Hong Kong Stock Exchange (SEHK: 0753) and London Stock Exchange (LSE: AIRC).
Headquartered in Beijing, Air China has several branch offices, including in Southwest China, Zhejiang, Chongqing, Tianjin, Shanghai, Hubei, Guizhou, Tibet, and Wenzhou. It also has bases in Eastern and Southern China. Air China' s main subsidiaries include Shenzhen Airlines Co., Ltd., Dalian Airlines Co., Ltd., Beijing Airlines Co., Ltd., Air China Inner Mongolia Co., Ltd., Air Macau Co., Ltd., Air China Import and Export Co., Ltd., Chengdu Falcon Aircraft Engineering Service Co., Ltd., and Air China Shantou Industrial Development Company.
Its major joint ventures include Aircraft Maintenance and Engineering Corporation Limited (Ameco) and Sichuan International Aviation Engine Maintenance Co., Ltd. Air China also holds shares in companies including Cathay Pacific and Shandong Airlines, and is the largest shareholder in Shandong Airlines Group Co., Ltd. Beijing Air Catering Co., Ltd., which was once controlled by Air China, now operates as a subsidiary of China Aviation Investment Co., Ltd. The company was established on May 1, 1980, in Beijing as the first joint venture launched after the enactment of the Law of the People's Republic of China on Chinese-Foreign Equity Joint Ventures.
As of December 31, 2019, Air China (including its holding company) owns a total of 699 aircrafts of various types, mainly by Boeing and Airbus, with an average lifespan of 6.96 years. The company' s passenger routes have expanded to 770, including 137 international, 27 regional and 606 domestic routes. The company flies to 43 countries (regions) and 187 cities, including 65 international, 3 regional, and 119 domestic cities. Through its collaboration with other Star Alliance member airlines, the company' s route network has further extended to 1317 destinations in 195 countries.
For the complete information, see:
http://www.airchina.com.cn/en/about_us/company.shtml
29 October 2021
Air China Releases Results for First Three Quarters of 2021
Result Highlights
|
Item (RMB100 Million) |
January to September 2021 |
January to September 2020 |
Year-on-year change % |
|
Operating Revenue |
574.57 |
484.54 |
18.58 |
|
Operating Cost |
631.50 |
529.46 |
19.27 |
|
Net Profit Attributable to the Parent Company |
-103.22 |
-101.12 |
2.07 |
|
EPS (RMB) |
-0.75 |
-0.74 |
1.35 |
(Hong Kong, 29 October 2021) Air China Limited ("Air China" or the "Company", with its subsidiaries, the "the Group") (Stock Code: HKEX: 00753; LSE: AIRC; SSE: 601111; ADR OTC: AIRYY), today announced the financial results for the first three quarters of 2021 (the "Period").
Operation and Business Highlights
In the first three quarters of 2021, the Group's overall transport capacity (by ATK) was 18.677 billion ATKs, a year-on-year increase of 15.24%, and the total traffic (by RTK) was 10.554 billion RTKs, a year-on-year increase of 16.56%. Passenger transport capacity (by ASK) was 120.076 billion ASKs, up by 11.43% year-on-year. Specifically, domestic and regional routes grew by 28.64% and 44.99% year on year, respectively, while international routes decreased by 81.51% year-on-year. Passenger turnover (by RPK) was 83.634 billion RPKs, a year-on-year increase of 11.12%. Specifically, domestic and regional routes rose by 27.69% and 54.02% year on year, respectively, while international routes dropped by 86.80% year-on-year. Passenger load factor was 69.65%, which was basically the same as that in the same period last year. Overall load factor was 56.51%, up by 0.64 percentage points.
As for freight transport, cargo capacity in the period (by AFTK) was 7.857 billion AFTKs, growing by 20.76% year-on-year. Freight turnover (by RFTK) amounted to 3.133 billion RFTKs, a year-on-year increase of 29.81%. The overall load factor of cargo and mail reached 39.88%, up by 2.78 percentage points.
Outlook
The Group has always given top priority to the national interests and earnestly shouldered its political, economic, and social responsibilities. Meanwhile, it focuses on safe operations, improvement in quality and efficiency, and cost control, strives to alleviate the impact of the pandemic, and promotes high-quality development.
For the complete story, see: http://www.airchina.com.cn/en/images/investor_relations/2021/11/01/65C0F629CCB22B1646E21CFBFD89321C.pdf
Air France / KLM Group (EPA: AF)
About Air France
Air France is a leading global player in its three main areas of activity: passenger transport, cargo transport and aircraft maintenance. Air France is a founding member of the SkyTeam global alliance, alongside Korean Air, Aeromexico and Delta. With the North American airline, Air France has also set up a joint venture dedicated to the joint operation of several hundred transatlantic flights every day.
https://corporate.airfrance.com/en/company
About Air France - KLM Group
It offers its customers access to a network covering over 250 destinations thanks to Air France, KLM Royal Dutch Airlines and Transavia. With a fleet of 554 aircraft and 104 million passengers carried in 2019, Air France-KLM operates up to 2,300 daily flights, mainly from its hubs at Paris-Charles de Gaulle and Amsterdam-Schiphol.
Its Flying Blue loyalty program is one of the leaders in Europe with over 15 million members.
Together with its partners Delta Air Lines and Alitalia, Air France and KLM operates the largest transatlantic joint venture with more than 275 daily flights.
The group also offers cargo transport and aeronautical maintenance solutions.
Air France and KLM are also members of the SkyTeam alliance which has 19 member airlines, offering customers access to a global network of over 14,500 daily flights to more than 1,150 destinations in more than 175 countries.
https://www.airfranceklm.com/en/group/profile
29 February 2024
FULL YEAR RESULTS 2023
Sustained demand translating into improved operating margin at 5.7% Group's equity restored.
- Group capacity at 93% compared to 2019 with load factor at 87%
- Group revenues at €30.0bn, up 14% compared to last year
- Operating result at €1.7bn with an operating margin at 5.7%, up +1.2pt compared to last year
- Net income at €0.9bn driving a return in positive equity at €0.5bn for the first time since 2019
- Net debt down by €1.3bn, compared to end of 2022 leading to a Net debt/EBITDA ratio of 1.2x; Cash at hand at €10.5bn
- 2 inaugural credit ratings highlighting the Group's ongoing transformation and an improved financial structure
Commenting on the results, Mr. Benjamin Smith, Group CEO, said:
"In 2023, we delivered on our commitment to strong operational and financial performance, while also maintaining our position as a benchmark airline Group for sustainability. Among our major achievements, we can be satisfied of our efforts to further strengthen our balance sheet and restore the Group's equity. We also placed a historic order for fifty Airbus A350s with purchase rights for forty additional aircraft, thereby accelerating our fleet's renewal with latest-generation aircraft that offer improved fuel efficiency, lower CO2 and noise emissions, and an enhanced experience for our customers. We also confirmed our position as the world's leading user of sustainable aviation fuel, demonstrating our determination to double down on this key decarbonization lever to achieve our sustainability objectives. I would like to thank all Air France-KLM employees whose hard work has made these accomplishments possible. Looking ahead to 2024, a key priority will be to continue reinforcing our performance, via the continued execution of our strategy. This year will mark Air France-KLM's 20th anniversary, an occasion made all the more special by the Paris 2024 Olympic and Paralympic Games, of which Air France is a proud official sponsor. We look forward to welcoming the world to France - athletes, delegates, supporters and more - onboard our aircraft to celebrate the world's largest event."
Fourth Quarter 2023
In the fourth quarter, revenues were up +6.7% at a constant currency compared to Q4 2022 supported by a combination of an increase in capacity (+6%) and an improved passenger yield (+3.2%) partly absorbed by a cargo unit revenue decrease (-31.8%).
The operating result was €190 million below last year standing at -€56 million and was impacted by the geopolitical situation in Africa and in the Middle East (€65m) and an increase of the unit cost, although partly compensated by a lower jet fuel price.
The group unit cost per ASK at constant fuel and constant currency is up 3.5% versus last year due an increase in operational disruption costs for €70 million and a one-time non-cash impact (IFRS2) related to the employee shareholding plan for €30m.
Full-Year 2023
Air France-KLM recorded the highest revenue in its history in 2023, amounting to €30bn, up +15.1% at constant currency. The operating margin stood at 5.7%, sequentially improving by +1.2pt compared to last year thanks to a combination of strong yield and load factor. Net income amounted to €934 million, up by €206 million, which, combined with the quasi equity financings occurred during the year, leads to a return in positive equity (€0.5bn).
The full year adjusted operating free cash flow was impacted by the payment of the wage taxes, pensions & social charges accumulated during Covid (€350 million).
In January 2024, Air France fully redeemed €610 million of the deferred pensions payment to the Caisse des Retraites des Personnels Navigants (CRPN). The Group will redeem the remaining social charges and wage taxes of around €1.7 billion until 2027.
The net debt ended at €5.0 billion representing an improvement of €1.3 billion compared to 2022.
Passenger unit revenue up thanks to improved load factor and yield
In the fourth quarter 2023, Air France-KLM welcomed 22.3 million passengers which is 6.4% above previous year. As capacity increased by 6.0% and traffic grew by 5.3%, the load factor was broadly stable at -0.6 point compared to last year.
The Group passenger unit revenue per ASK was up +2.8% at constant currency compared to last year. This increase was driven by an increase in yield across all long-haul geographies and Short & Medium-haul.
Upsizing and the completion of a quasi-equity financing of €1.5 billion
Following the signing on October 26, 2023, of a definitive agreement between Air France-KLM and Apollo (NYSE: APO) regarding the financing of a dedicated operating affiliate of Air FranceKLM, the companies announced on November 30th, that they have completed the transaction for an upsized total amount of €1.5 billion.
The financing by Apollo-managed and third-party investment vehicles supports a dedicated operating affiliate of Air France-KLM that holds the trademark and most of the commercial partners contracts related to Air France and KLM's joint loyalty program ("Flying Blue") as well as the exclusive right to issue "Miles" for the airlines and their partners. The financing is accounted for as equity under IFRS. As announced by Air France-KLM during its Q3 2023 results, this outcome materializes the steps implemented by the Group to restore its IFRS equity to positive by year end.
The transaction upsize to €1.5 billion reflects strong investor confidence and the quality of Air France-KLM Flying Blue Miles issuance activity. The transaction terms disclosed in late October 26, 2023, remain unchanged, with a fixed coupon of 6.4% p.a. for the first four years, with the right for Air France KLM to redeem with at overall financing fixed cost of 6.75% at the first call date
The agreed structure will incur no material changes for Flying Blue members. Air France-KLM will continue managing and operating the Flying Blue loyalty program, and Air France and KLM will each keep full control on the Flying Blue customer database. In addition, the financing structure will not affect social aspects for Air France, KLM nor Air France-KLM employees' contracts.
Success of Air France-KLM Group's global employee shareholding plan
On December 21st, 2023, Air France-KLM has successfully finalized its "Partners for the future" employee shareholding offer, a capital increase reserved for approximately 75,000 eligible employees of the Group, launched in November 2023. For this Group's first worldwide operation, approximately 17,000 employees located in 19 countries, representing approximately 22% of the total workforce of the Group, have subscribed to the "Partners for the future" offer, enabling them to invest in Air France-KLM shares on preferential terms. The total subscription amounts to nearly 46,073,029 euros, corresponding to the issue of 5,716,256 new shares with a par value of one euro each. As a result, the Company's share capital was increased by 5,716,256 euros, from 257,053,613 euros to 262,769,869 euros. Following this issuance, the employee shareholders in Air France-KLM's share capital, within the meaning of Article L. 225-102 of the French Commercial Code, is just over 3% of the share capital.
2024 OUTLOOK
Capacity
The Group expects the capacity in Available Seat Kilometers for Air France-KLM Group including Transavia to increase by 5% in 2024 compared to 2023.
Unit cost
For the first quarter 2024, the Group expects a unit cost up +4% compared to 2023 due to the continuation of high disruption cost in the first two months and a one-time payment of 2% of the yearly salary to the KLM staff as agreed in the Collective Labour Agreement. For the full year 2024, the Group expects a unit cost in the range of 1% to 2% compared to 2023.
Capex
Full year 2024 net capex is expected to stand between 3.0 billion and 3.2 billion euros.
For full financial report, see: https://www.airfranceklm.com/sites/default/files/2024-03/2023_q4_-_afklm_-_press_release_-_final.pdf
Air New Zealand (ASX: AIZ)
Company Profile
Air New Zealand operates a global network that provides passenger and cargo services to, from and within New Zealand to approximately 17 million passengers a year.
Air New Zealand's strategic focus and competitive advantage lies within the Pacific Rim where the airline's network reach extends from New Zealand into Australia, Asia, and the Americas.
Air New Zealand operates its own connection to London and through global alliance partners connects New Zealand to Europe and beyond, with over 3,400 flights, on average, each week to domestic and international destinations. Air New Zealand's consolidated operating revenue was $5.5 billion in the 2018 financial year, generated by a fleet of over 100 aircraft and over 12,500 employees based globally.
The symbol that appears on the tail of our aircraft is the 'koru'. The koru is a New Zealand Maori symbol based on the spiral shape of an unfolding fern leaf. It represents new life, renewal and hope for the future.
https://www.airnewzealand.com.au/corporate-profile
22 February 2024
Air New Zealand announces 2024 Interim Results
Key points
- Earnings before taxation of $185 million
- Passenger revenue of $3.1 billion driven by a significant ramp-up in capacity across the international network
- Airline is currently reviewing pricing and capacity to reflect ongoing inflation pressures
- Unimputed ordinary interim dividend of 2.0 cents per share declared
- Significant improvement in onboard experience, reliability and customer response times
- Tougher forward trading environment. Earnings before taxation for the 2024 financial year now expected to be in the range of $200 million to $240 million, including $20 million of currently assumed additional Covid-related credit breakage.
Air New Zealand has today announced earnings before taxation of $185 million for the first half of the 2024 financial year. Net profit after taxation was $129 million. This is an expected reduction on the comparable period last year when the airline recorded one of its highest-ever results following the rapid return of air travel as New Zealand's borders reopened.
Based on the airline's balance sheet strength and the result announced today, Air New Zealand shareholders will receive an unimputed interim dividend of 2.0 cents per share. The dividend will be paid on 21 March, to shareholders on record as at 8 March. This equates to a payout ratio of 41 percent.
Passenger revenue of $3.1 billion was up 21 percent, driven by a significant ramp-up in capacity across the international network. Demand was stable in most markets, but signs of softness in domestic corporate and Government demand was experienced from September. Overall capacity was up 29 percent on the comparative six-month period. Operating costs, including fuel, increased 21 percent due to a substantial increase in long-haul flying this year.
Inflationary pressures also continue to be felt. Non-fuel operating costs have increased around 5 percent or $100 million due to price inflation, which is on top of an increase totalling 15 to 20 percent across the last four years. The cumulative effect of these increases is having a significant impact on the cost of providing air services, including on the domestic network, and the airline is currently reviewing fares and capacity to better reflect ongoing cost pressure.
Chair Dame Therese Walsh says the half year result represents the hard mahi of the Air New Zealand whānau, who rallied together in the face of unavoidable challenges.
"We knew this year would be tougher than the last, when pent up levels of demand and industry-wide capacity constraints drove one of the strongest financial results in our history.
"And while we have reported a solid first half result, it is against the backdrop of significant ongoing supply chain issues, particularly the additional Pratt & Whitney engine maintenance requirements on our A321neo fleet, which will see up to five of our newest and most efficient aircraft out of service at any one time across the next 18 months at least.
"On top of these operational challenges, we are now leaning into the reality of a worsening revenue and cost environment, which is expected to have a significant adverse impact on performance in the second half.
"Earlier this week the airline provided a full year profit outlook, noting among other things, a deterioration in the forward bookings profile. Intense international competition features heavily in the current environment, particularly for North America where our US competitors have not yet returned to China at scale, and for now have directed some of that additional capacity to the New Zealand market, putting pressure on yields.
"The business is pulling multiple levers to mitigate the impact of these headwinds, and this is a key focus for the team.
"Despite these short-term challenges, the airline is in a fundamentally strong position. Our balance sheet is robust, and the Board is committed to the airline's Capital Management Framework as announced last August, including its ordinary dividend policy. Accordingly, the Board was pleased to announce a dividend of 2.0 cents per share for the first half."
Chief Executive Officer Greg Foran says doing the basics brilliantly without ever compromising on safety has positioned the airline well to compete.
"Our on-time performance and contact centre wait times have improved. Food and beverage offerings have been enhanced. Inflight entertainment options and Wi-Fi have also been improved. An additional 400,000 people have joined our loyalty programme over the past year, lifting membership to 4.4 million. All these things, along with the manaaki shown by staff - taking care further than any other airline - have seen our customer satisfaction score return to pre-pandemic levels.
"The engine maintenance requirements for both Pratt & Whitney and Rolls Royce have seen our aircraft spend more time on the ground. While this is beyond our control, we are managing these issues with changes to our schedule and additional leased aircraft.
"Boeing has now confirmed that the first of the new 787 Dreamliners is unlikely to arrive until at least mid-2025, which will delay delivery of our innovative new Skynest. The interior retrofit of our current 787 fleet remains on track.
"To mitigate these challenges, we introduced a dry lease 777-300ER in November. A second dry lease 777-300ER will enter the fleet mid-year and we are well advanced on negotiations for a third.
"While the global aviation ecosystem remains under immense pressure, Air New Zealand is committed to providing the best experience possible to our loyal customers while we navigate these issues."
2H 2024 Trading update
As noted in the airline's market update on 19 February 2024, a number of continuing economic and operational conditions have deteriorated and are now expected to have a significant adverse impact on performance in the second half. These include the impact of additional competition on forward revenue performance, ongoing weakness in domestic corporate and government demand, temporary cost headwinds of $35 million in the second half to alleviate customer impacts and operational pressures, as well as ongoing cost inflation.
Outlook
In light of these conditions, the airline considers that performance for the second half of the 2024 financial year will be markedly lower than the first half.
In this context, and assuming an average jet fuel price of USD$105/bbl for the second half, the airline currently expects earnings before taxation for the 2024 financial year to be in the range of $200 million to $240 million. This range includes $20 million of currently assumed additional Covid-related credit breakage over the second half. Future redemptions of Covidrelated credits remain uncertain and subject to further actions
https://p-airnz.com/cms/assets/PDFs/air-nz-2024-interim-results-media-release.pdf
Alaska Airlines (NYSE: ALK)
Alaska Airlines History
For over 85 years, Alaska Airlines and the people who make us who we are, have been guided by integrity, caring, ingenuity, professionalism, and a unique spirit—a spirit that has grown out of our geographical roots.
Who we are today is a direct result of our history and the amazing people involved in it; a long list of aviation milestones, paired with countless stories of people being remarkable to help others.
All these milestones, good deeds, and community involvement have helped us grow us from a small regional airline to an international carrier. With more than 44+ million customers a year, our route system spans over 115+ destinations and 4 countries.
https://www.alaskaair.com/content/about-us/history
25 January 2024
Alaska Air Group reports fourth quarter and full year 2023 results
Alaska Air Group Inc. (NYSE: ALK) today reported financial results for the fourth quarter and full year ended December 31, 2023.
"Air Group's 2023 accomplishments were significant," said CEO Ben Minicucci. "I want to thank our people for delivering a reliable operation, industry-leading cost performance, and a strong 7.5% adjusted pretax margin. As we navigate early 2024, we remain steadfast in our commitment to safety, providing a premium experience for our guests, and delivering durable financial performance. I am also grateful for how the team has rallied together to demonstrate tremendous professionalism and care in the midst of a challenging start to 2024 for them and our guests. Alaska is a resilient company with a track record of operational excellence, and we are confident in the plans we have laid out to ensure that success moving forward."
Financial Results:
- Reported net loss for the fourth quarter and net income for the full year 2023 under Generally Accepted Accounting Principles (GAAP) of $2 million, or $0.02 per share, and $235 million, or $1.83 per diluted share. These results compare to net income for the fourth quarter and full year 2022 of $22 million, or $0.17 per diluted share, and $58 million, or $0.45 per diluted share.
- Reported net income for the fourth quarter and full year 2023, excluding special items and mark-to-market fuel hedge accounting adjustments, of $38 million, or $0.30 per diluted share, and $583 million, or $4.53 per diluted share. These results compare to net income for the fourth quarter and full year 2022, excluding special items and mark-to-market fuel hedge accounting adjustments, of $118 million, or $0.92 per diluted share, and $556 million, or $4.35 per diluted share.
- Generated an adjusted pretax margin of 7.5% for the full year 2023, among the highest in the industry.
- Recorded $2.6 billion in operating revenue for the fourth quarter, and a record $10.4 billion for the full year 2023.
- Reduced CASM excluding fuel and special items by 6.6% in the fourth quarter and 2.6% in the full year compared to 2022.
- Generated $1.1 billion in operating cash flow for the full year 2023.
- Repurchased approximately 2 million shares of common stock for $75 million in the fourth quarter, bringing total repurchases to approximately 3.5 million shares for $145 million for the full year 2023.
- Recognized more than $400 million in bank card partner commissions in the fourth quarter and $1.6 billion for the full year 2023, representing a 13% year-over-year increase compared to the full year 2022.
- Air Group employees earned $200 million of incentive pay in 2023 by achieving profitability, sustainability, operational, and safety targets. The payout represents more than three weeks of pay for most employees.
- Received an investment grade credit rating of "Baa3" from Moody's Investors Service, citing the Company's "strong business profile and conservative financial policy."
Balance Sheet and Liquidity:
- Ended the year with a debt-to-capitalization ratio of 46%, within the target range of 40% to 50%.
- Repaid $40 million in debt in the fourth quarter, bringing total debt payments to $282 million for the full year 2023.
Operational Updates:
- Agreed to purchase Hawaiian Airlines for $18 per share in cash. The proposed combined airline will preserve both the Alaska and Hawaiian brands and provide guests with an expanded network across the Pacific.
- Placed our first 737-800 freighter into operating service, with a second 737-800 freighter expected to be delivered in the first quarter of 2024.
- Announced Alaska's 30th global airline partner, Porter Airlines, opening new opportunities for guests to travel to Canada from the West Coast.
- Announced new routes beginning in 2024, including: Seattle-Toronto, Anchorage-New York JFK, Anchorage-San Diego, and Portland-Nashville.
- Enhanced partnership with Condor Airlines with a bilateral codeshare agreement that enables Alaska and Condor to sell each other's flights.
- Completed sale of ten Airbus A321neos to American Airlines, with eight transactions occurring in the fourth quarter and two in January.
- Introduced inflight contactless payment Tap to Pay, an industry first, providing customers with an easier option to make purchases while flying.
737-9 MAX Grounding:
- Preparing to complete the final inspections on all of our 737-9 MAX aircraft. Each aircraft will be returned to service after the inspection has been completed and any findings resolved.
- Completed requested inspections of all 737-900ER aircraft with only one minor finding which was immediately corrected.
- Initiated a thorough review of Boeing's production quality and control systems, including Boeing's production vendor oversight to enhance quality control on new aircraft.
- Began enhanced quality oversight program at the Boeing production facility, expanding our team to validate work and quality of our aircraft as they progress through the manufacturing process.
Environmental, Social, and Governance Updates:
- Partnered with climate-tech company CHOOOSE to offer guests the ability to purchase sustainable aviation fuel credits or support nature-based climate projects upon check-out.
- Through Alaska's Care Miles program, Mileage Plan members donated over 100 million miles to 22 different charities in 2023.
Awards and Recognition:
- Named Worldwide Airline of the Year by the Centre for Aviation at the World Aviation Summit in Abu Dhabi.
- Achieved a score of 100 on the Human Rights Foundation's 2023-2024 Corporate Equity Index in recognition of Alaska's policies and practices supporting LGBTQ+ workplace equality.
For full financial report, see: https://investor.alaskaair.com/news-releases/news-release-details/alaska-air-group-reports-fourth-quarter-and-full-year-2023
All Nippon Airways (TSE: 9202)
About ANA
Founded more than 60 years ago in 1952 with just two helicopters, All Nippon Airways (ANA), has become the largest airline in Japan, serving 46 international destinations and 50 domestic destinations (as of December 2019).
ANA HOLDINGS INC. (ANAHD) was established in 2013 as the largest airline group holding company in Japan comprised of 78 companies including ANA and Peach Aviation Limited, the leading LCC in Japan. With a fleet of more than 300 aircraft (as of March 2020), ANAHD has more than 45,000 employees and serves more than 54 million passengers a year, making ANA and its subsidiaries the 15th largest carrier in the world by daily flight volume.
ANA is a launch customer and the biggest operator of the Boeing 787 Dreamliner, making ANAHD the biggest Dreamliner owner in the world. A member of Star Alliance since 1999, ANA has Joint Venture agreements with United Airlines, Lufthansa Airlines, Swiss International Airlines, Austrian Airlines and Brussels Airlines- giving it a truly global presence.
The 78 companies organized under the ANAHD umbrella operate in a diverse range of markets, including air transportation, travel services and trade, and retail embody ANAHD's shared values of exceptional service, responsible corporate citizenship and investment in the communities where they operate.
Supplementing its operations in commercial aviation, ANAHD has led the development of the innovative haptic robotics program, through its avatarin Inc. company, and its involvement in space with its partnership with JAXA, and other space related companies such as Astroscale and PD Aerospace.
The airline's legacy of superior service has helped it earn SKYTRAX's respected 5-Star rating every year since 2013, making ANA the only Japanese airline to win this prestigious designation and for eight consecutive years. ANA also has been recognized by Air Transport World as "Airline of the Year" three times (2007, 2013 and 2018); it is one of a select few airlines to win this prestigious award multiple times.
https://www.ana.co.jp/group/en/about-us/by-the-numbers/
2 February 2023
ANA HOLDINGS Financial Results for the Nine Months Ended December 31, 2022
- ANA HOLDINGS INC. recorded an operating income, ordinary income as well as net profit behind increased revenue and continued cost management efforts, as well as government support.
- ANA HOLDINGS INC. is revising its full year consolidated financial forecast for FY2022, reflecting the third quarter financial results.
- ANA HOLDINGS INC. will reveal its new mid-term corporate strategy on February 15, 2023. While recovering trend in demand is accelerating, various factors including geopolitical risks continue to impact business. ANA HOLDINGS INC. will invest in human resources, aircraft and technology while continuing to restore its financial base, reducing interest-bearing debt.
ANA HOLDINGS INC. (hereinafter "ANA HD") today reports its financial results for the nine months ended December 31, 2022.
Overview
In the first nine months of fiscal year 2022 (April 1, 2022 - December 31, 2022; hereinafter the "nine months ended December 31, 2022"), passenger demand is rapidly recovering with ease of travel restrictions on domestic flights as well as less entry restrictions in various countries for international flights.
Under these economic and operating conditions, the increased revenue is mainly due to the Air Transportation business that contributed to an operating revenue of 1,258.6 billion yen for the nine months ended December 31, 2022. ANA HD recorded an operating income of 98.9 billion yen, ordinary income of 92.3 billion yen, and net income attributable to owners of the parent was 62.6 billion yen.
"With the easing of travel restrictions in the last quarter, we were excited to offer our high-quality customer service to more passengers and serve additional destinations, as reflected by our positive financial performance," said Kimihiko Nakahori, Executive Vice President and Group Chief Financial Officer of ANA HD. "The ability to do this is a testament to our employees who have persevered over the last few years and worked together to position the ANA Group for the future."
Air Transportation
- International Passenger Service (ANA)
- The number of international passengers increased five times year-on-year, and revenue increased by six times, behind strong demand for connections between North America and Asia as well as business demand from Japan resulting from the easing of entry restrictions in various countries. Demand for travel to Japan began to recover from October with the easing of Japan's border control measures.
- ANA increased the number of flights on North America and Asia routes to/from Narita Airport to accommodate transit demand, and expanded operations on routes to/from Haneda Airport as well in response to recovering demand to/from Japan. ANA has gradually recovered operations of Europe routes despite the continued impact of the Ukraine-Russia conflict, while flights to/from China remain limited due to continued border restrictions in China.
- Domestic Passenger Service (ANA
- With limited impact from the resurgence in COVID-19 cases, passenger demand steadily increased on domestic routes. Starting in October, leisure demand was stimulated by the government's travel support program, and both passenger volume and revenue were 1.9 times higher than in the same period of the previous year.
- ANA fully resumed operations of the Boeing 777 aircraft with completed engine refurbishment, actively increasing capacity on certain flights and adding extra flights mainly on weekends and holidays in order to meet recovering demand. In October, ANA started code-sharing on flights operated by Amakusa Airline, Inc. and Japan Air Commuter Co., Ltd. for routes such as Fukuoka - Amakusa and Kagoshima - Tanegashima.
- Cargo Service (ANA)
- International cargo volume declined year-on-year as a result of less cargo operations utilizing passenger aircraft temporarily dedicated for cargo transport as passenger demand increased, and a decline in demand for automobile-related parts.
- Despite a decline in revenue in the third quarter (October-December) compared to the previous quarter due to softening demand, revenue was higher than in the same period of the previous year for the nine months ended December 31, 2022 as a result of taking in high-yield cargo such as oversized commercial products and capturing demand between Asia and North America.
- LCC (Peach Aviation)
- Both passenger volume and revenue were significantly higher year-on-year due to an increase in demand as a result of eased travel and entry restrictions in Japan as well as in various countries.
- In response to increasing demand on domestic routes, Peach increased frequency on the Narita - Sapporo route and the Narita - Fukuoka route. For international routes, the Seoul and Taipei routes resumed in August, and the Kansai - Bangkok route was newly launched in December after all flights had been suspended since April 2021.
- Others
Other revenue from the Air Transportation business was 107.6 billion yen (up 11.4% year-on-year from 96.6 billion yen). This includes revenue from the mileage program, in-flight sales revenue, revenue from maintenance contracts and other sources.
Airline Related, Travel Services, Trade and Retail, and Others
- Airline Related
- Revenue increased from the same period of the previous year, due to increase in airport handling service support, such as check in service and baggage loading, in addition to in-flight meal-related operations that were in line with the recovery in passenger demand, as well as an increase in handling of international cargo volume.
- Travel Services
- For domestic travel, as demand steadily recovered and backed by the government's travel support program, the volume of dynamic package products increased for all regions, and "ANA Traveler's Hotel" products performed well. For overseas travel, tours to Hawaii resumed in April for the first time in two years, and tour destinations were also expanded sequentially to various countries. As a result, revenue increased from the same period of the previous year.
- Working to create a "world where people can live on miles," the ANA Group renewed its "ANA Mileage Club" mobile application in October as a platform where users can access daily life services that are offered by the ANA Group. The ANA Group will further improve convenience by expanding opportunities to "earn and spend miles" both in the daily life scene and online.
- Trade and Retail
- As passenger demand recovered, sales increased at ANA FESTA shops in airports and the handling volume of semiconductors for electronics businesses increased. As a result, operating revenue increased from the previous year.
- Others
- While there was an increase in contracted lounge operation business, revenue declined year-on-year as there was a large sale of property in the previous year in the real estate sector.
https://www.anahd.co.jp/group/en/pr/202302/20230202.html?_gl=1*1kz3mal*_ga*NzE4ODQ1MzkzLjE2NzU2NTExMDA.*_ga_32F297W9WL*MTY3NTY1MTEwMC4xLjEuMTY3NTY1MTE2OC4wLjAuMA ..
American Airlines Group (NASDAQ: AAL)
American Airlines Group Inc. was formed on December 9, 2013, with the closing of the merger between American Airlines and US Airways Group. The company now lists on NASDAQ Global Select Market under the ticker symbol AAL.
About American Airlines Group
American Airlines and American Eagle offer an average of nearly 6,700 flights per day to nearly 350 destinations in more than 50 countries. American has hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C. American is a founding member of the oneworld® alliance, whose members serve more than 1,000 destinations with about 14,250 daily flights to over 150 countries. Shares of American Airlines Group Inc. trade on NASDAQ under the ticker symbol AAL. In 2015, its stock joined the S&P 500 index.
https://americanairlines.gcs-web.com/
25 January 2024
American Airlines reports fourth-quarter and full-year 2023 financial results.
American Airlines Group Inc. (NASDAQ: AAL) today reported its fourth-quarter and full-year 2023 financial results, including:
- Record full-year revenue of approximately $53 billion.
- GAAP fourth-quarter and full-year net income of $19 million and $822 million, or $0.03 and $1.21 per diluted share, respectively.
- Excluding net special items1, fourth-quarter and full-year net income of $192 million and $1.9 billion, or $0.29 and $2.65 per diluted share, respectively.
- Achieved best-ever fourth-quarter and full-year completion factor.
- Generated GAAP operating cash flow of $3.8 billion and the airline's highest full-year free cash flow2 of $1.8 billion.
- Reduced total debt3 by $3.2 billion in 2023. The company is more than 75% of the way to its 2025 total debt reduction goal.
"The American Airlines team produced an exceptionally strong performance in 2023," said American's CEO Robert Isom. "We are delivering on our commitments and remain well-positioned for the future, supported by the strength of our network and travel rewards program, our young and simplified fleet, our operational reliability, and our outstanding team. As we look forward, we remain focused on delivering a reliable operation for our customers and reengineering the business to build an even more efficient airline."
Operational reliability
American and its regional partners operated nearly 2 million flights in 2023, with an average load factor of 83.5%. The company produced its best-ever fourth-quarter and full-year completion factor, with the lowest number of cancellations annually since the merger in 2013.
The airline's strong operational momentum continued through the holiday travel period. American achieved its best-ever completion factor and on-time departures as well as its lowest mishandled baggage rate over the holidays.
Financial performance
For the full year, American produced record revenue of nearly $53 billion. In the fourth quarter, the company generated revenue of more than $13 billion and an operating margin of 5.0% on a GAAP basis. Excluding the impact of net special items1, American produced an operating margin of 5.1% in the fourth quarter, exceeding the high end of the company's prior guidance. These results were driven by continued strong demand for American's product, record revenue from its travel rewards program, strong operational performance and effective cost control.
Liquidity and balance sheet
Strengthening the balance sheet remains a top priority for the company. American reduced total debt3 by more than $500 million in the fourth quarter and by approximately $3.2 billion in 2023. The company is more than 75% of the way to its goal of reducing total debt3 by $15 billion by the end of 2025. As of Dec. 31, 2023, American had reduced its total debt3 by approximately $11.4 billion from peak levels in mid-2021.
The company ended the year with approximately $10.4 billion of total available liquidity, comprised of cash and short-term investments plus undrawn capacity under revolving and other short-term credit facilities.
Guidance and investor update
Based on present demand trends and the current fuel price forecast and excluding the impact of special items4, the company expects its first-quarter 2024 adjusted loss per diluted share4 to be between ($0.15) and ($0.35). American expects its full-year 2024 adjusted earnings per diluted share4 to be between $2.25 and $3.25.
For additional financial forecasting detail, please refer to the company's investor update, furnished with this press release with the SEC on Form 8-K. This filing will also be available at aa.com/investorrelations.
https://americanairlines.gcs-web.com/news-releases/news-release-details/american-airlines-reports-fourth-quarter-and-full-year-2023
British Airways (LSE: BAY)
About British Airways
British Airways is a full-service global airline, offering year-round low fares with an extensive global route network flying to and from centrally located airports.
https://www.britishairways.com/en-gb/information/about-ba?source=BOT_about_ba
Explore our past
British Airways can trace its origins back to the birth of civil aviation, the pioneering days following World War I. In the 100 years that have passed since the world's first schedule air service on 25 August 1919, air travel has changed beyond all recognition. Each decade saw new developments and challenges, which shaped the path for the future, take a look at the different eras of air travel, to see how British Airways became the airline it is today.
https://www.britishairways.com/en-gb/information/about-ba/history-and-heritage/explore-our-past
28 October 2022
International Consolidated Airlines Group (IAG) today (October 28, 2022) presents Group consolidated results for the nine months to September 30, 2022.
IAG financial results highlights for the period:
- Operating profit for the third quarter €1,208 million (2021: operating loss €452 million), and operating profit before
- exceptional items €1,206 million (2021: operating loss before exceptional items €485 million)
- Operating profit for the nine months €770 million (2021: operating loss €2,487 million), and operating profit before exceptional items €739 million (2021: operating loss before exceptional items €2,665 million)
- Profit after tax and exceptional items for the third quarter €853 million (2021: loss €574 million) and profit after tax before exceptional items €853 million (2021: loss €606 million)
- Profit after tax and exceptional items for the nine months €199 million (2021: loss €2,622 million) and profit after tax before exceptional items €170 million (2021: loss €2,775 million)
- Strong liquidity at September 30, 2022:
- Total liquidity increased to €13,488 million (December 31, 2021: €11,986 million)
- Cash1 of €9,260 million, up €1,317 million on December 31, 2021
- Committed and undrawn general and aircraft financing facilities of €4,228 million (December 31, 2021: €4,043 million); availability of $1,755 million revolving credit facility extended by one year to March 2025
- Net debt at September 30, 2022 was down €609 million since December 31, 2021 to €11,058 million
Total revenue fully recovered despite lower capacity than in 2019
- Total revenue for quarter 3 of €7,329 million, 0.9 per cent higher than in 2019, despite the restrictions imposed at London Heathrow airport and the Asia Pacific network remaining substantially closed
- Passenger unit revenue increased in quarter 3 by 21.9% vs 2019 (quarter 2 up 6.4%)
- Passenger capacity in quarter 3 was 81.1% of 2019 up from 78.0% in quarter 2, driven primarily by IAG's key regions of European shorthaul (91% of 2019), North America (92%) and Latin America & Caribbean (75%)
- Passenger yield for quarter 3 was 22.9% higher than in 2019 and load factor of 87.0% was only 0.7pts lower
- By the end of quarter 3, premium leisure revenue had fully recovered to 2019's level, despite capacity being significantly
- lower. Business channel revenue had recovered to c.75% of 2019's level
- Non-fuel unit costs were 25.5% higher than 2019 in quarter 3, driven by the lower capacity operated, adverse foreign exchange and inflation
- British Airways' capacity for the quarter was in line with previous guidance and operational performance significantly improved during the quarter, with further improvements planned in order to achieve the levels we expect
- IAG's overall passenger capacity plans are for c.87% of 2019 capacity for quarter 4 and c.78% for the full year 2022
- British Airways' main pension scheme (NAPS) - heads of terms for 2021 valuation agreed with Trustees, with no deficit reduction contributions expected under the existing overfunding protection mechanism.
Performance summary:
|
Reported results (€ million) |
2022 |
2021 |
Higher / (lower) |
|
Passenger revenue |
14,020 |
3,140 |
nm |
|
Total revenue |
16,680 |
4,921 |
nm |
|
Operating profit/(loss) |
770 |
(2,487) |
nm |
|
Profit/(loss) after tax |
199 |
(2,622) |
nm |
|
Basic earnings/(loss) per share (€ cents) |
4.0 |
(52.8) |
nm |
|
Cash, cash equivalents and interest-bearing deposits2 |
9,260 |
7,943 |
16.6 % |
|
Borrowings2 |
20,318 |
19,610 |
3.6 % |
|
Alternative performance measures3 (€ million) |
2022 |
2021 |
Higher / (lower) |
|
Passenger revenue before exceptional items |
14,020 |
3,135 |
nm |
|
Total revenue before exceptional items |
16,680 |
4,916 |
nm |
|
Operating profit/(loss) before exceptional items |
739 |
(2,665) |
nm |
|
Profit/(loss) after tax before exceptional items |
170 |
(2,775) |
nm |
|
Adjusted earnings/(loss) per share (€ cents) |
0.4 |
(55.9) |
nm |
|
Net debt2 |
11,058 |
11,667 |
(5.2)% |
|
Available seat kilometres (ASK million) |
192,544 |
74,123 |
nm |
|
Passenger revenue per ASK (€ cents) |
7.28 |
4.23 |
72.2 % |
|
Non-fuel costs per ASK (€ cents) |
5.99 |
8.61 |
(30.4)% |
"We achieved another strong performance in the third quarter, with an operating profit of €1.2 billion and liquidity of over €13 billion. All our airlines were significantly profitable and we are continuing to see strong passenger demand, while capacity and load factors recover.
"Leisure demand is particularly healthy and leisure revenue has recovered to pre-pandemic levels. Business travel continues to recover steadily.
"I would like to thank our employees across the Group for their hard work which has been key to our recovery. This strong trading performance allows us to continue to invest in our customers, our people and our industry-leading sustainability agenda.
"We're pleased that our shareholders have recently approved the acquisition of 87 new shorthaul aircraft that will bring us long-term cost savings, lower carbon emissions as well as an improved customer experience.
"While demand remains strong, we are conscious of the uncertainties in the economic outlook and the ongoing pressures on households. Against this backdrop, we are focused on adapting our operations to meet demand, strengthening our balance sheet by re-building our profitability and cashflows and capitalising on our high level of liquidity. This will allow us to allocate capital while investing in a disciplined way in our service and our people, to build capacity and enable future growth.
"As we build back our operational resilience, we are confident in our strengths as a Group: first, a portfolio of leading airline brands; second, leading positions in our key markets and hubs; and third, the flexibility afforded by IAG to drive operational efficiency and innovation. These will enable us to return to pre-COVID levels of profit and generate long-term value for all our stakeholders."
Trading outlook
At current fuel prices and exchange rates, IAG expects its 2022 pre-exceptional operating profit to be approximately €1.1 billion. Net cash flow from operating activities is expected to be significantly positive for the year. This assumes no further setbacks related to COVID-19 and material impacts from geopolitical developments. Net debt is expected to increase by year end, linked to seasonal booking patterns and capital expenditure associated with aircraft deliveries in quarter 4.
Quarter 4 2022 capacity, measured in ASKs, is expected to be approximately 87% of 2019, resulting in full year 2022 capacity of c.78% of the 2019 level. Capacity in the first quarter of 2023 is expected to be approximately 95% of 2019.
For full financial report, see:
https://www.iairgroup.com/~/media/Files/I/IAG/press-releases/english/2022/q3-2022-financial-results.pdf
Cathay Pacific (HKEX: 0293)
Cathay Pacific Group Fact Sheet
The Hong Kong-based Cathay Pacific Group's network of passenger and cargo services covers over 200 destinations in Asia, North America, Australia, Europe and Africa, with around 230 aircraft in the Group's fleet as of 30 June 2020.
There are three airlines in the Cathay Pacific Group:
- Cathay Pacific, an international network airline.
- HK Express, a wholly owned subsidiary of Cathay Pacific, which operates as a stand-alone low-cost carrier.
- AHK Air Hong Kong, an all-cargo carrier wholly owned by Cathay Pacific operating regional express freight services.
Cathay Pacific is a member of the Swire group and is a public company listed on the Hong Kong Stock Exchange.
Cathay Pacific is a founder member of the oneworld global alliance.
https://news.cathaypacific.com/fact-sheet
9 March 2022
Announcement 2021 Annual Results
Financial and Operational Highlights
Group Financial Statistics
|
Results |
2021 |
2020 |
Change |
|
|
Revenue |
HK$ million |
45,587 |
46,934 |
-2.9% |
|
Loss attributable to the shareholders of Cathay Pacific |
HK$ million |
(5,527) |
(21,648) |
-74.5% |
|
Loss per ordinary share |
HK cents |
(95.1) |
(424.3) |
-77.6% |
|
Dividend per ordinary share |
HK$ |
- |
- |
- |
|
Loss margin |
% |
(12.1) |
(46.1) |
+34.0%pt |
|
Financial position |
||||
|
Funds attributable to the shareholders of Cathay Pacific |
HK$ million |
72,244 |
73,257 |
-1.4% |
|
Net borrowings(a) |
HK$ million |
70,570 |
73,788 |
-4.4% |
|
Available unrestricted liquidity |
HK$ million |
30,250 |
28,593 |
+5.8% |
|
Ordinary shareholders' funds per ordinary share(b) |
HK$ |
8.1 |
8.3 |
-2.4% |
|
Net debt/equity ratio(a) |
Times |
0.98 |
1.01 |
-0.03 times |
Chairman's Statement
In our previous annual report, I wrote that 2020 was the most challenging year in our history. The unprecedented disruption caused by COVID-19 to the global aviation industry and the subsequent travel and operational restrictions around the world have continued to affect our business severely. Notwithstanding these challenges, the situation did improve as 2021 progressed.
The second half of the year is traditionally stronger than the first half, and this was the case for us in 2021. The exceptional performance of our cargo business, especially during the second-half peak season, was extremely encouraging. Nevertheless, we continued to face serious challenges and despite the considerable improvement in results in the second half of the year, our overall loss for the full year was still substantial.
The Cathay Pacific Group's attributable loss was HK$5,527 million in 2021 (2020: loss of HK$21,648 million). The loss per ordinary share in 2021 was HK95.1 cents (2020: loss per ordinary share of HK424.3 cents). The Group's attributable profit was HK$2,038 million in the second half of 2021 (2021 first half: loss of HK$7,565 million; 2020 second half: loss of HK$11,783 million). Cathay Pacific reported an attributable profit of HK$3,303 million in the second half of 2021 (2021 first half: loss of HK$5,031 million; 2020 second half: loss of HK$10,032 million).
The loss for 2021 includes impairment and related charges of HK$832 million, mainly relating to 12 aircraft that are unlikely to re-enter meaningful economic service before they retire or are returned to lessors, HK$385 million in restructuring costs and a HK$210 million gain on the dilution of an associate interest in Air China Cargo. This compares to impairment and related charges of HK$4,056 million in 2020 relating to 34 aircraft (and to certain airline service subsidiaries' assets) and HK$2,383 million of restructuring costs. Adjusting for these exceptional items, the Cathay Pacific Group's attributable loss for 2021 was HK$4,520 million (2020: loss of HK$15,209 million), and Cathay Pacific's loss for 2021 was HK$776 million (2020: loss of HK$12,195 million).
Cathay Pacific celebrated an important milestone in our history in 2021 as we marked 75 years of bringing people together as Hong Kong's home airline. Though we have certainly experienced our share of challenges over the years, COVID-19 key among them, we have also had incredible successes. Throughout our history, we have connected people to new destinations, welcomed the arrival of state-of-the-art aircraft and launched exciting innovations. As our home city has grown, so have we, and we are immensely proud to have represented Hong Kong over the past 75 years and to have helped it grow into one of the leading international aviation hubs in the world.
But 2021 was not just a year for reflecting on our past. The launch of "Cathay", our new premium travel lifestyle brand, has opened an exciting new chapter. Cathay aims to bring all that we love about travel together with everyday lifestyle. This will simplify the way our customers interact with us, including how they earn status and use miles, and will enable us to engage with them not only when they fly with us, but every day.
We also celebrated the inaugural flight of the newest addition to our fleet, the Airbus A321neo, in August. These state-of-the-art passenger aircraft provide the best short-haul experience in the world. Cathay Pacific has already taken delivery of five A321neos and will have 16 in its fleet by the end of 2023.
We continued our commitment to achieving greener aviation by pledging to use sustainable aviation fuel for 10% of Cathay Pacific's total fuel consumption by 2030, and by becoming a founding member of the Aviation Climate Taskforce, a new non-profit organisation founded to tackle the challenge of eliminating carbon emissions in aviation through innovation and collaboration. These initiatives will help the Group achieve its goal of net-zero carbon emissions by 2050.
Business performance of Cathay Pacific
The introduction of strict quarantine requirements for Hong Kong-based aircrew in February 2021 had a substantial impact on our travel business. To operate the remaining schedules, we introduced voluntary closed-loop duty cycles for our Hong Kong-based aircrew, comprising a 21-day duty cycle followed by a 14-day quarantine period. These arrangements have been very demanding for our aircrew and we are incredibly appreciative to them for their support and their tireless professionalism in the face of extremely challenging circumstances.
Operational and travel restrictions remained in place throughout the year, and this heavily constrained our ability to operate more flights. We reduced our flight schedule towards the end of December in response to the latest crew quarantine requirements in Hong Kong, and ended the year operating a considerably smaller amount of our pre-COVID-19 passenger capacity than we had planned.
Comparing 2021 with 2020 as a whole, the operating performance in 2021 was generally weaker due in large part to the first two months of 2020 being relatively strong ahead of the full impact of COVID-19. Passenger revenue decreased by 61.6% to HK$4,346 million in 2021 compared with 2020. Revenue passenger kilometres (RPK) decreased by 79.5%. Capacity, measured in available seat kilometres (ASK), was down by 61.8%. We carried 717 thousand passengers, an average of 1,965 per day, 84.5% fewer than in 2020. Passenger load factor was 31.1% compared with 58.0% in 2020.
Our cargo business performed exceptionally well. Cargo revenue in 2021 was HK$32,377 million, an increase of 31.8% compared to 2020. Cargo revenue tonne kilometres (RFTK) decreased by 1.1%. Capacity, measured by available cargo tonne kilometres (AFTK), decreased by 10.9%. Load factor increased by 8.1 percentage points to 81.4%. Yield increased by 33.1% to HK$3.94.
Cargo demand grew ahead of the traditional peak season in the second half of the year. In the months leading up to the end of 2021, we operated our freighter fleet at peak capacity, and supplemented our cargo capacity with additional cargo-only passenger flight operations. We also operated six of our Boeing 777-300ER passenger aircraft that have been partially converted into "preighters" by removing some of the seats in the passenger cabins to provide additional cargo-carrying capacity. In October, we carried more than 136,000 tonnes of cargo - the most we have carried in a single month since the start of COVID-19. Our airlines have carried more than 190 million COVID-19 vaccines since the start of COVID-19.
We remained focused on effective cash and cost management. Executive pay was cut for the whole of 2021 and we introduced a third unpaid leave scheme in the first half of the year, with an 80% voluntary uptake. Employee furlough, leave without pay, voluntary separation and early retirement schemes were implemented for a broad range of employee groups, and we are extremely grateful to all of our employees who participated in such schemes. Overall, our non-fuel costs decreased by 24.4% to HK$37,708 million. Cathay Pacific's total fuel costs (before the effect of fuel hedging) increased by HK$927 million (or 11.9%) compared to 2020. This reflected increased fuel prices.
Business performance of other subsidiaries and associates
HK Express reported a loss of HK$1,978 million for 2021 (2020: loss of HK$1,723 million). The results were adversely affected by low demand for passenger travel and by COVID-19-related travel restrictions and quarantine requirements, including those affecting Hong Kong-based aircrew.
Air Hong Kong recorded a profit in 2021, benefitting from strong cargo demand. The all-cargo airline flew extra sectors for Cathay Pacific.
Our airline services subsidiaries' financial performance was better than in 2020.
Air China (accounted for three months in arrears) was adversely affected by COVID-19. Its results were worse than those in 2020.
Financial position
The exceptionally strong cargo performance, together with our continued focus on effective cash and cost management, had a positive impact on our monthly operating cash burn, to the extent that we were marginally cash generative in the second half of 2021.
At 31st December 2021, our available unrestricted liquidity balance was HK$30.3 billion. During the year we raised HK$6.7 billion from a convertible bond issue and US$650 million (equivalent to HK$5.1 billion) from a straight bond issue under our medium-term note programme. We welcomed the Hong Kong SAR Government's agreement to extend the drawdown period of the HK$7.8 billion loan facility made available as part of our 2020 recapitalisation by 12 months to June 2022. This provides us with more flexibility to manage our liquidity position.
Prospects
We have had an extremely challenging start to 2022. Following the emergence of the Omicron variant, the HKSAR Government tightened the quarantine requirements for Hong Kong-based aircrew, notably those operating cargo flights, and temporarily banned all flights from nine countries, including the UK and the US, which are major markets for us. Passengers from high-risk places were banned from transiting through Hong Kong International Airport. All this constrained our ability to operate flights as planned. As a result, we expect to operate around 2% of pre-COVID-19 passenger flight capacity, and our cargo flight capacity is likely to remain less than one-third of pre-COVID-19 levels while current restrictions remain in place. We are trying our best to maintain our passenger and cargo networks as far as possible and will try to increase our cargo capacity as much as practicable.
As Hong Kong goes through a particularly challenging phase of this pandemic, I'd like to express my empathy and concern for all the people across Hong Kong who are affected. In the early days of COVID-19, Cathay Pacific crew bravely volunteered to operate evacuation flights to bring Hong Kong people home, and during this latest phase, we are doing everything we can to support the city, bringing in vaccines, rapid antigen test kits and essential food and medical supplies, and working with the authorities to support the pandemic response.
As Hong Kong's home airline, we are resolutely committed to keeping the flow of people and cargo between Hong Kong and the rest of the world safely moving, and to protecting and enhancing the city's aviation hub status despite the challenging circumstances presented by COVID-19. We have absolute confidence in the long-term future of Hong Kong. Everything we do at Cathay Pacific is in the service of Hong Kong. Cathay Pacific has been proudly serving our home city as its de facto flag carrier through thick and thin for over 75 years.
We are excited by the possibilities provided by the launch of our new premium travel lifestyle brand and we will continue to launch new offers and enhancements that will give our customers more reasons to travel, to shop and to interact with us. Our commitments to sustainable aviation will continue as we strive to reach our net-zero target by 2050, and we will further build on our digital leadership capabilities. We continue to position ourselves to capitalise on the opportunities presented by the Greater Bay Area, and the growth potential afforded by the opening of the third runway at Hong Kong International Airport.
Though we are still facing many challenges, we have the utmost confidence in the long-term future of Cathay Pacific. We have been privileged to fly out of Hong Kong as its home airline for the past 75 years and, as those years have shown, Cathay Pacific is an enduring airline.
Finally, I would like to extend my sincere appreciation to all of our people, who have been working tirelessly to keep the airline operating under incredibly challenging conditions. In particular, I would like to thank our aircrew, who have kept Hong Kong safely connected to the world under the most difficult conditions for any airline anywhere in the world. In 2021, our crew spent more than 62,000 nights in quarantine hotels. In addition, over 1,000 of our people, many of them aircrew, but also people from our services, operations and head office teams, have spent over 11,000 nights in the Penny's Bay quarantine facility. Collectively, our crew took over 230,000 COVID-19 tests in 2021, with only 16 positive cases despite our people, who are of course all fully vaccinated, flying continuously to many of the highest-risk countries in the world. The professionalism they have shown in upholding safe operations throughout this period have been unparalleled.
For the full financial report, see
https://www.cathaypacific.com/content/dam/cx/about-us/investor-relations/announcements/en/2021_cx_annual_results_en.pdf
China Eastern Airlines (SHA: 600115)
Headquartered in Shanghai, China Eastern Air Holding Company (CEAH) is among China's three major air transportation groups. It originated from the first squadron established by former Civil Aviation Administration of Shanghai in January 1957. Through continuous structural adjustment and resource integration, CEAH has evolved into a major aviation industry group with an integrated service system focusing on core business of aviation transportation and logistics, reinforced by a wide range of additional businesses including aviation real estate, aviation finance, advertising media and duty-free, air catering, trade and logistics, general aviation, and industrial investment.
As the core undertaking of CEAH, China Eastern Airlines Co., Ltd. was the first Chinese airline to be listed on New York, Hong Kong, and Shanghai stock markets in 1997. Currently, it operates a fleet of over 600 aircrafts, with average age less than 5.5 years, being one of the youngest fleets in major airlines in the world. As a member of the SkyTeam Alliance, CEA serves over 100 million passengers globally and ranks 7th in the world. Through an air network, CEA now reaches 1,052 destinations in 177 countries. Frequent Flyer of Eastern Miles are privileged with 672 lounges worldwide within all 20 SkyTeam member airlines.
Committed to serving national welfare and people's livelihood, economic and social development, reform and opening up, CEAH constantly pursues the coordinated development of "national interest, economic benefits and social welfare". In 2011, it set out the development guideline of "transforming from a traditional air passenger carrier to a modern integrated air service provider". In 2012, inspired by the Chinese dream, CEAH put forth the China Eastern Dream, that is, to develop CEAH into a word-class airline in great harmony.
Since 2009, CEAH has been widely recognized by the society and nominated for a string of awards. After being honoured with the Five-Star Flight Safety Award by the Civil Aviation Administration of China (CAAC), CEAH was awarded the titles of "the 25 Most Innovative Company in China" and listed among Top 10 companies of Corporate Social Responsibility by Fortune (Chinese edition). It has been recognized as one of the 30 most valuable Chinese brands by WPP and was among the top in ROE among SOEs.
Looking forward, China Eastern is committed to developing itself into an outstanding enterprise that lives up to staff devotion, customers' loyalty, shareholder satisfaction and public trust, continuously bringing wonderful experiences for global customers with "accurate, delicate and precise" services.
https://us.ceair.com/newCMS/us/en/content/en_Footer/AboutUS/201903/t20190305_2992.html
China Southern Airlines (SHA: 600029)
China Southern Airlines Company Limited, with world headquarters based in Guangzhou, has its company logo seen around the globe with a brilliant red kapok delicately adoring a blue vertical tail fin.
As the largest airline in the People's Republic of China, China Southern Airlines is pleased to operate eight holding public air transportation subsidiaries including Xiamen Air, Henan Airlines, Guizhou Airlines and Zhuhai Airlines; 16 branches including Xinjiang, Northern and Beijing Branches; 23 domestic sales offices in nearly every major Chinese city including Hangzhou and Qingdao as well as 56 international sales offices located in major metropolitan destinations such as Singapore, New York City and Paris.
The airline radiates its distinctive cultural character of "Sunshine China Southern" and its mission continues to be "Connecting the World to Create a Better Life".
With "Customer, Staff, Advantage, Innovation, Return" as its core values and the "Diligent, Practical, Inclusive, Innovative" spirit, China Southern is dedicated to fulfilling its vision of "Building a World-class Airline with Global Competitiveness".
During Year 2019, China Southern safely transported more than 152 million passengers, leading all Chinese carriers for 41 consecutive years. The airline is ranked 1st in Asia and 6th globally in terms of annual passenger traffic and 8th globally in terms of cargo and mail volume (Source: IATA).
As of December 2019, China Southern had a fleet of more than 860 passenger and cargo aircraft, including the Boeing 787 Dreamliner, B777 and B737, as well as the Airbus A380 superjumbo, A330 and A320. It was one of the first airlines in the world to operate the A380 superjumbo.
Currently, China Southern operates an extensive route network of more than 1,000 routes with 3,000 daily flights to 224 destinations in 40 countries and regions around the world, offering more than 500,000 seats.
Through close cooperation with its global airline partners including American Airlines and Qatar Airways, China Southern continues to extend its route network to more destinations around the world.
In recent years, China Southern has been fully dedicated to building its comprehensive Guangzhou-Beijing "dual hubs" by launching new routes and optimizing its route network.
At the airline's home base located at Guangzhou Baiyun International Airport, China Southern has been making remarkable progress over the past decade in developing its "Canton Route" family of travel products to serve the many nations located along the "Belt and Road" as well as the sprawling Guangdong-Hong Kong-Macao Greater Bay Area.
At the close of Year 2019, China Southern served 132 destinations from Guangzhou Baiyun International Airport, including 51 international and regional destinations.
Guangzhou has become the No. 1 gateway hub from China's mainland to Australasia and Southeast Asia, forming a "4-hour air traffic circle" with major cities in China and Southeast Asia, and a "12-hour air traffic circle" with major international destinations.
As the largest hub carrier at the new Beijing Daxing International Airport (PKX), China Southern takes up more than 40% of slot resources and will undertake over 40% of anticipated future passenger traffic.
Since September 2019, China Southern has been methodically moving its flight operations to PKX and its self-built aircraft hangar, operation control centre and air catering production base - the largest of their kinds in Asia - are already in daily operation.
It is planned that by Year 2021, all China Southern flights to/from Beijing will be relocated to PKX and by Year 2025, China Southern is expected to deploy more than 200 dedicated aircraft to PKX with more than 900 daily aircraft movements.
China Southern is committed to working with all parties to build Beijing Daxing International Airport into a new world-class aviation hub as well as a convenient and efficient gateway of China.
China Southern has actively responded to and provided strong support for China's "Belt and Road Initiative" and in its key regions of South Asia, Southeast Asia, South Pacific and Central and West Asia through its decades-long well-established route network.
This decisive leadership position among all Chinese carriers in terms of the number of flights, flight frequencies and market share, makes China Southern a major force in building air connectivity between China and countries and regions along the "Belt and Road".
China Southern is singularly honoured to hold the best safety record among all Chinese carriers with outstanding safety management levels in the world.
In June 2018, China Southern was honoured with the Two-Star Flight Safety Diamond Award by the Civil Aviation Administration of China with the highest safety rating in China.
China Southern has the capability to train pilots independently with more than 10,000 professional aviators currently in service.
Its Zhuhai Xiangyi Simulator Training Centre is one of the largest training centres in Asia with the most extensive range of flight simulator models and the longest history of operation in China.
China Southern is also pleased to partner with Germany's MTU Aero Engines to operate the largest and most advanced aero engine overhaul and maintenance facility in China.
China Southern's self-developed "Flight Operation Control System" and "Engine Performance Monitoring System" were honoured with the "Second Prize for National Scientific and Technological Progress", offering the most state-of-the-art IT systems in the Chinese aviation industry.
China Southern Air Logistics, with Guangzhou and Shanghai as its hubs, operates the largest fleet of 16 freighters in China's mainland.
China Southern is committed to developing a world-class service brand combining "affinity and refinement" to deliver an exceptional and seamless travel experience to all passengers.
As of December 2019, China Southern's Sky Pearl Club frequent flyer program has more than 49 million members. In July 2020, China Southern launched a new membership tier - Sky Pearl Platinum - and fully enhanced its membership program which provides members with a full range of exclusive travel services.
China Southern's Nanland Air Catering Centre has an annual production capacity of more than 90 million in-flight meals, offering the finest gourmet Cantonese and Western cuisine for every pallet.
In Year 2011, China Southern was named by SKYTRAX as a Four-Star Airline and five years later was honoured as "The World's Favourite Airline" by SKYTRAX, topping all Chinese carriers.
Subsequently in Year 2017, China Southern was honoured as the national "Customer Satisfaction Benchmark" enterprise by China Association for Quality and was ranked 1st in aviation services of the China National Customer Recommendation Index.
In Year 2018, China Southern was named the "World's Most Improved Airline" by SKYTRAX.
China Southern faithfully fulfils its Corporate Social Responsibility as a state-owned enterprise which has been widely applauded by all sectors of the society.
As of September 1, 2020, China Southern operated 16,300 medical relief flights in China's determined and on-going battle against COVID-19.
The airline safely transported 24,000 medical staff and 27,000 tons of medical supplies and repatriated more than 20,000 Chinese citizens who were stranded abroad.
During Years 2016 and 2017, China Southern was listed among the Top 500 corporations in China by Fortune China Magazine with the highest ranking among companies in the transportation industry.
China Southern's "Ten Fen" Care Foundation was named an excellent volunteer service program and one of the "10 Best Volunteer Service Brands" among state-owned enterprises by the State-owned Assets Supervision and Administration Commission of the State Council.
In 2019, China Southern was ranked 6th in Brand Finance Magazine's 2019 list of The World's 50 Most Valuable Airline Brands.
At the "2019 Chinese Brand" event hosted by China Media Group, China Southern was listed among the Top 100 Model Brands in China. With a brand value of US$4.46 billion, China Southern was ranked 39th in China's Most Valuable Brands and rated 116th in Asia's Top 500 brands by the World Brand Lab.
Beginning in Year 2020, China Southern will be pleased to sponsor the China International Import Expo - for five consecutive years - as a Core Supporting Enterprise and the Designated Air Carrier.
https://www.csair.com/en/about/gongsijianjie/
29 April 2021
First Quarterly Report Of 2021
Summary
The 2021 first quarterly financial report of China Southern Airlines Company Limited (the "Company", together with its subsidiaries, the "Group") was prepared in accordance with the PRC Accounting Standards and was unaudited.
This announcement is published pursuant to rules 13.09 and 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
Financial Statements
Consolidated Balance Sheet As at 31 March 2021
Unit: Million Currency: RMB Unaudited
|
Items |
31 March 2021 |
31 December 2020 |
|
Current assets: |
||
|
Cash at bank and on hand |
25,420 |
25,823 |
|
Bills receivable |
11 |
12 |
|
Accounts receivable |
3,595 |
2,544 |
|
Prepayments |
501 |
732 |
|
Other receivables |
2,109 |
1,955 |
|
Including: Interest receivable |
52 |
35 |
|
Dividends receivable |
4 |
4 |
|
Inventories |
1,829 |
1,760 |
|
Other current assets |
6,356 |
6,159 |
|
Total current assets |
39,821 |
38,985 |
|
Non-current assets: |
||
|
Long-term equity investments |
5,744 |
5,673 |
|
Other equity instrument investments |
799 |
799 |
|
Other non-current financial assets |
95 |
92 |
|
Investment properties |
301 |
312 |
|
Fixed assets |
86,346 |
85,754 |
|
Construction in progress |
32,930 |
32,438 |
|
Right-of-use assets |
142,146 |
145,540 |
|
Intangible assets |
6,277 |
6,155 |
|
Long-term deferred expenses |
875 |
887 |
|
Deferred tax assets |
9,148 |
7,749 |
|
Other non-current assets |
1,567 |
1,731 |
|
Total non-current assets |
286,228 |
287,130 |
|
Total assets |
326,049 |
326,115 |
|
Current liabilities: |
||
|
Short-term borrowings |
24,465 |
25,286 |
|
Derivative financial liabilities |
3,516 |
3,148 |
|
Bills payable |
278 |
278 |
|
Accounts payable |
13,093 |
11,974 |
|
Sales in advance of carriage |
4,070 |
3,997 |
|
Contract liabilities |
1,461 |
1,513 |
|
Employee benefits payable |
2,299 |
4,328 |
|
Taxes payable |
556 |
680 |
|
Other payables |
8,507 |
8,640 |
|
Including: Interest payable |
329 |
523 |
|
Dividends payable |
31 |
31 |
|
Non-current liabilities due within one year |
25,039 |
24,838 |
|
Other current liabilities |
16,500 |
10,999 |
|
Total current liabilities |
99,784 |
95,681 |
|
Non-current liabilities: |
||
|
Long-term borrowings |
12,102 |
8,811 |
|
Bonds payable |
29,494 |
29,323 |
|
Lease liabilities |
96,124 |
100,283 |
|
Long-tem payables |
266 |
291 |
|
Provision for major overhauls |
4,259 |
4,216 |
|
Deferred income |
831 |
769 |
|
Hedging instruments |
29 |
42 |
|
Deferred tax liabilities |
63 |
80 |
|
Other non-current liabilities |
1,598 |
1,756 |
|
Total non-current liabilities |
144,766 |
145,571 |
|
Total liabilities |
244,550 |
241,252 |
|
Owners' equity (or shareholders' equity) |
||
|
Share capital (or issued capital) |
15,329 |
15,329 |
|
Capital reserve |
39,050 |
39,050 |
|
Other comprehensive income |
254 |
242 |
|
Surplus reserve |
2,579 |
2,579 |
|
Retained earnings |
8,140 |
12,146 |
|
Total equity attributable to shareholders of the Company |
65,352 |
69,346 |
|
Non-controlling interests |
16,147 |
15,517 |
|
Total owners' equity(or shareholders' equity) |
81,499 |
84,863 |
|
Total liabilities and owners' equity(or shareholders' equity) |
326,049 |
326,115 |
Balance Sheet of the Company As at 31 March 2021
Unit: Million Currency: RMB Unaudited
|
Items |
31 March 2021 |
31 December 2020 |
|
Current assets: |
||
|
Cash at bank and on hand |
17,355 |
17,634 |
|
Accounts receivable |
3,158 |
2,139 |
|
Prepayments |
457 |
713 |
|
Other receivables |
1,393 |
1,364 |
|
Including: Interest receivable |
37 |
18 |
|
Dividends receivable |
4 |
4 |
|
Inventories |
1,202 |
1,145 |
|
Non-current assets due within one year |
727 |
476 |
|
Other current assets |
5,323 |
5,106 |
|
Total current assets |
29,615 |
28,577 |
|
Non-current assets: |
||
|
Long-term receivables |
2,751 |
1,691 |
|
Long-term equity investments |
17,281 |
15,788 |
|
Other equity instrument investments |
100 |
100 |
|
Other non-current financial assets |
21 |
22 |
|
Investment properties |
415 |
437 |
|
Fixed assets |
53,883 |
54,875 |
|
Construction in progress |
23,942 |
23,570 |
|
Right-of-use assets |
124,023 |
124,839 |
|
Intangible assets |
4,403 |
4,466 |
|
Long-term deferred expenses |
104 |
110 |
|
Deferred tax assets |
8,225 |
7,017 |
|
Other non-current assets |
1,462 |
1,481 |
|
Total non-current assets |
236,610 |
234,396 |
|
Total assets |
266,225 |
262,973 |
|
Current liabilities: |
||
|
Short-term borrowings |
23,373 |
22,615 |
|
Derivative financial liabilities |
3,516 |
3,148 |
|
Bills payable |
278 |
278 |
|
Accounts payable |
9,751 |
8,773 |
|
Sales in advance of carriage |
2,987 |
3,028 |
|
Contract liabilities |
1,286 |
1,355 |
|
Employee benefits payable |
1,359 |
2,799 |
|
Taxes payable |
95 |
75 |
|
Other payables |
7,292 |
7,455 |
|
Including: Interest payable |
317 |
483 |
|
Dividends payable |
||
|
Non-current liabilities due within one year |
19,826 |
19,644 |
|
Other current liabilities |
16,500 |
10,999 |
|
Total current liabilities |
86,263 |
80,169 |
|
Non-current liabilities: |
||
|
Long-term borrowings |
11,422 |
8,122 |
|
Bonds payable |
26,995 |
26,823 |
|
Lease liabilities |
83,888 |
86,324 |
|
Provision for major overhauls |
2,744 |
2,656 |
|
Long-term payables |
266 |
291 |
|
Deferred income |
529 |
390 |
|
Hedging instruments |
29 |
42 |
|
Other non-current liabilities |
1,375 |
1,608 |
|
Total non-current liabilities |
127,248 |
126,256 |
|
Total liabilities |
213,511 |
206,425 |
|
Owners' equity (or shareholders' equity) |
||
|
Share capital (or issued capital) |
15,329 |
15,329 |
|
Capital reserve |
38,423 |
38,423 |
|
Other comprehensive income |
-23 |
-35 |
|
Surplus reserve |
2,579 |
2,579 |
|
Retained earnings |
-3,594 |
252 |
|
Total owners' equity(or shareholders' equity) |
52,714 |
56,548 |
|
Total liabilities and owners' equity(or shareholders' equity) |
266,225 |
262,973 |
Consolidated Income Statement For the three months ended 31 March 2021
Unit: Million Currency: RMB Unaudited
|
Items |
Three months ended 31 March 2021 |
Three months ended 31 March 2020 |
|
1. Total revenue |
21,253 |
21,141 |
|
Including: Operating revenue |
21,253 |
21,141 |
|
2. Total operating costs |
27,038 |
28,928 |
|
Including: Cost of sales |
23,461 |
23,940 |
|
Taxes and surcharges |
65 |
49 |
|
Selling and distribution expenses |
1,131 |
1,389 |
|
General and administrative expenses |
766 |
831 |
|
Research and development expenses |
85 |
86 |
|
Financial expenses |
1,530 |
2,633 |
|
Including: Interest expenses |
1,600 |
1,645 |
|
Interest income |
193 |
16 |
|
Add: Other income |
627 |
676 |
|
Investment income ("-" for losses) |
66 |
-598 |
|
Including: Share of profit of associates and joint ventures("-" for losses) |
66 |
-598 |
|
Gains/(losses) arising from changes in fair value ("-" for losses) |
-363 |
-24 |
|
Credit losses ("-" for losses) |
1 |
0 |
|
Impairment losses on property, plant and equipment and right-of-use assets("-" for losses) |
1 |
0 |
|
Gains/(losses) on disposal of assets("-" for losses) |
50 |
1 |
|
3. Operating profit ("-" for losses) |
-5,403 |
-7,732 |
|
Add: Non-operating income |
101 |
131 |
|
Less: Non-operating expenses |
3 |
2 |
|
4. Total profits ("-" for losses) |
-5,305 |
-7,603 |
|
Less: Income tax expenses |
-1,191 |
-1,593 |
|
5. Net profit ("-" for net losses) |
-4,114 |
-6,010 |
|
(1) By continuity |
||
|
1) Net profit from continuing operations ("-" for net losses) |
-4,114 |
-6,010 |
|
2)Net profit from discontinued operations ("-" for net losses) |
||
|
(2) By ownership |
||
|
1)Net profit attributable to shareholders of the Company("-" for net losses) |
-4,006 |
-5,262 |
|
2)Non-controlling interests ("-" for net losses) |
-108 |
-748 |
|
6. Other comprehensive income, net of tax |
12 |
-43 |
|
Other comprehensive income (net of tax) attributable to shareholders of the Company |
12 |
-43 |
|
(1) Items that will not be reclassified to profit or loss |
||
|
(2) Items that may be reclassified subsequently to profit or loss: |
12 |
-43 |
|
1)Equity-accounted investees-share of other comprehensive income (recycling) |
3 |
0 |
|
2) Cash flow hedge: net movement in the hedging reserve (effective portion in cash flow hedge) |
9 |
-43 |
|
Other comprehensive income (net of tax) attributable to non-controlling interests |
||
|
7. Total comprehensive income |
-4,102 |
-6,053 |
|
(1) Attributable to shareholders of the Company |
-3,994 |
-5,305 |
|
(2) Attributable to non-controlling interests |
-108 |
-748 |
|
8. Earnings per share: |
||
|
(1) Basic earnings per share (RMB/share)("-" for losses) |
-0.26 |
-0.43 |
|
(2) Diluted earnings per share (RMB/share)("-" for losses) |
-0.26 |
-0.43 |
Income Statement of the Company For the three months ended 31 March 2021
Unit: Million Currency: RMB Unaudited
|
Items |
Three months ended 31 March 2021 |
Three months ended 31 March 2020 |
|
1. Total revenue |
13,475 |
14,272 |
|
2.Less: Cost of sales |
16,090 |
16,544 |
|
Taxes and surcharges |
29 |
20 |
|
Selling and distribution expenses |
674 |
923 |
|
General and administrative expenses |
432 |
482 |
|
Research and development expenses |
44 |
50 |
|
Financial expenses |
1,227 |
2,099 |
|
Including: Interest expenses |
1,335 |
1,328 |
|
Interest income |
162 |
5 |
|
Add: Other income |
176 |
278 |
|
Investment income ("-" for losses) |
69 |
-596 |
|
Including: Share of profit of associates and joint ventures ("-" for losses) |
69 |
-596 |
|
Gains/(losses) arising from changes in fair value ("-" for losses) |
-367 |
-19 |
|
Gains/(losses) on disposal of assets ("-" for losses) |
5 |
57 |
|
3. Operating profit ("-" for losses) |
-5,138 |
-6,126 |
|
Add: Non-operating income |
81 |
124 |
|
Less:Non-operating expenses |
||
|
4. Total profits ("-" for losses) |
-5,057 |
-6,002 |
|
Less: Income tax expenses |
-1,211 |
-1,352 |
|
5. Net profit ("-" for net losses) |
-3,846 |
-4,650 |
|
(1) By continuity |
||
|
1) Net profit from continuing operations ("-" for net losses) |
-3,846 |
-4,650 |
|
2)Net profit from discontinued operations ("-" for net losses) |
||
|
6. Other comprehensive income, net of tax |
12 |
-43 |
|
Other comprehensive income (net of tax) attributable to shareholders of the Company |
||
|
(1) Items that will not be reclassified to profit or loss |
||
|
(2) Items that may be reclassified subsequently to profit or loss: |
12 |
-43 |
|
1)Equity-accounted investees - share of other |
3 |
0 |
|
comprehensive income (recycling) |
||
|
2) Cash flow hedge: net movement in the hedging reserve (effective portion in cash flow hedge) |
9 |
-43 |
|
7. Total comprehensive income |
-3,834 |
-4,693 |
Consolidated Cash Flow Statement For the three months ended 31 March 2021
Unit: Million Currency: RMB Unaudited
|
Items |
Three months ended 31 March 2021 |
Three months ended 31 March 2020 |
|
1. Cash flows from operating activities: |
||
|
Procrrds from sale of goods and rendering of services |
21,870 |
15,829 |
|
Refund of taxes and surcharges |
10 |
6 |
|
Proceeds from other operating activities |
620 |
697 |
|
Sub-total of operating cash inflows from operating activities |
22,500 |
16,532 |
|
Payment for goods and services |
14,593 |
16,743 |
|
Payment to and for employees |
6,934 |
7,074 |
|
Payment of taxes and surcharges |
834 |
571 |
|
Payment for other operating activities |
190 |
382 |
|
Sub-total of cash outflows from operating activities |
22,551 |
24,770 |
|
Net cash flows from operating activities |
-51 |
-8,238 |
|
2. Cash flows from investment activities: |
||
|
Net proceeds from disposal of fixed assets, intangible assets and other long-term assets |
556 |
207 |
|
Proceeds from other investing activities |
176 |
21 |
|
Sub-total of cash inflows from investing activities |
732 |
228 |
|
Payment for acquisition of fixed assets, intangible assets and other long-term assets |
4,284 |
1,293 |
|
Sub-total of cash outflows from investment activities |
4,284 |
1,293 |
|
Net cash flows from investing activities |
-3,552 |
-1,065 |
|
3. Cash flows from financing activities: |
||
|
Proceeds from investors |
925 |
0 |
|
Including: investment received from non- controlling interests |
925 |
0 |
|
Proceeds from borrowings |
21,117 |
19,388 |
|
Proceeds from issuance of bonds |
25,000 |
22,500 |
|
Proceeds from other financing activities |
18 |
|
|
Sub-total of cash inflows from financing activities |
47,060 |
41,888 |
|
Repayments of borrowings |
42,123 |
30,812 |
|
Payment for dividends, profit distributions or interest |
1,735 |
1,687 |
|
Payment for purchase of non-controlling |
0 |
232 |
|
interests of a subsidiary |
||
|
Sub-total of cash outflows from financing activities |
43,858 |
32,731 |
|
Net cash flows from financing activities |
3,202 |
9,157 |
|
4. Effect of changes in exchange rate on cash and cash equivalents |
1 |
2 |
|
5. Net increase in cash and cash equivalents |
-400 |
-144 |
|
Add: Cash and cash equivalents at the beginning of the period |
25,419 |
1,849 |
|
6. Cash and cash equivalents at the end of the period |
25,019 |
1,705 |
Cash Flow Statement of the Company For the three months ended 31 March 2021
Unit: Million Currency: RMB Unaudited
|
Items |
Three months ended 31 March 2021 |
Three months ended 31 March 2020 |
|
1. Cash flows from operating activities: |
||
|
Procrrds from sale of goods and rendering of services |
13,212 |
9,289 |
|
Refund of taxes and surcharges |
4 |
6 |
|
Proceeds from other operating activities |
338 |
385 |
|
Sub-total of operating cash inflows from operating activities |
13,554 |
9,680 |
|
Payment for goods and services |
8,749 |
12,666 |
|
Payment to and for employees |
5,476 |
5,522 |
|
Payment of taxes and surcharges |
304 |
378 |
|
Payment for other operating activities |
122 |
283 |
|
Sub-total of cash outflows from operating activities |
14,651 |
18,849 |
|
Net cash flows from operating activities |
-1,097 |
-9,169 |
|
2. Cash flows from investment activities: |
||
|
Net proceeds from disposal of fixed assets, intangible assets and other long-term assets |
98 |
796 |
|
Proceeds from other investing activities |
143 |
5 |
|
Sub-total of cash inflows from investing activities |
241 |
801 |
|
Payment for acquisition of fixed assets, intangible assets and other long-term assets |
1,766 |
646 |
|
Payment for acquisition of investments |
2,301 |
232 |
|
Sub-total of cash outflows from investment activities |
4,067 |
878 |
|
Net cash flows from investing activities |
-3,826 |
-77 |
|
3. Cash flows from financing activities: |
||
|
Proceeds from borrowings |
20,600 |
17,120 |
|
Proceeds from issuance of bonds |
25,000 |
19,000 |
|
Proceeds from other financing activities |
18 |
0 |
|
Sub-total of cash inflows from financing activities |
45,618 |
36,120 |
|
Repayments of borrowings |
39,515 |
25,753 |
|
Payment for dividends, profit distributions or interest |
1,462 |
1,432 |
|
Sub-total of cash outflows from financing activities |
40,977 |
27,185 |
|
Net cash flows from financing activities |
4,641 |
8,935 |
|
4. Effect of changes in exchange rate on cash and cash equivalents |
3 |
2 |
|
5. Net increase in cash and cash equivalents |
-279 |
-309 |
|
Add: Cash and cash equivalents at the beginning of the period |
17,556 |
859 |
|
6. Cash and cash equivalents at the end of the period |
17,277 |
550 |
For the full financial report, see:
https://www.csair.com/en/about/investor/yejibaogao/2021/resource/a79b94805c7c76ef1f1e3c55785d414b.pdf
Delta Air Lines (NYSE: DAL)
Corporate Profile
Delta Air Lines (NYSE: DAL) is the U.S. global airline leader in products, services, innovation, reliability, and customer experience. Powered by its people around the world, Delta continues to invest in its people, improving the air travel experience and generating industry-leading shareholder returns.
Headquartered in Atlanta, Delta in 2019 offered more than 5,000 daily departures and as many as 15,000 affiliated departures including the premier SkyTeam alliance, of which Delta is a founding member. Delta serves nearly 200 million people every year, taking customers across its industry-leading global network to more than 300 destinations in over 50 countries.
https://ir.delta.com/home/default.aspx
12 January 2024
Delta Air Lines Announces December Quarter and Full Year 2023 Financial Results
Delta Air Lines (NYSE: DAL) today reported financial results for the December quarter and full year 2023 and provided its outlook for the March quarter and full year 2024. Highlights of the December quarter and full year 2023, including both GAAP and adjusted metrics, are on page six and incorporated here.
"2023 was a great year for Delta with industry-leading operational and financial performance. Our people and their commitment to deliver unmatched service excellence for our customers is at the foundation of Delta's success. We are thrilled to recognize their outstanding work with $1.4 billion in profit sharing payments next month," said Ed Bastian, Delta's chief executive officer. "In 2024, demand for air travel remains strong and our customer base is in a healthy financial position with travel a top priority. We expect to grow full year earnings to $6 to $7 per share and generate free cash flow of $3 to $4 billion, further strengthening our financial foundation."
December Quarter 2023 GAAP Financial Results
- Operating revenue of $14.2 billion
- Operating income of $1.3 billion with an operating margin of 9.3 percent
- Pre-tax income of $2.3 billion with a pre-tax margin of 16.0 percent
- Earnings per share of $3.16
- Operating cash flow of $545 million
- Payments on debt and finance lease obligations of $361 million
December Quarter 2023 Adjusted Financial Results
- Operating revenue of $13.7 billion, 11 percent higher than the December quarter 2022
- Operating income of $1.3 billion with an operating margin of 9.7 percent
- Pre-tax income of $1.1 billion with a pre-tax margin of 7.8 percent
- Earnings per share of $1.28
- Operating cash flow of $499 million
Full Year 2023 GAAP Financial Results
- Operating revenue of $58.0 billion
- Operating income of $5.5 billion with an operating margin of 9.5 percent
- Pre-tax income of $5.6 billion with a pre-tax margin of 9.7 percent
- Earnings per share of $7.17
- Operating cash flow of $6.5 billion
- Payments on debt and finance lease obligations of $4.1 billion
- Total debt and finance lease obligations of $20.1 billion at year end
Full Year 2023 Adjusted Financial Results
- Operating revenue of $54.7 billion, 20 percent higher than the full year 2022
- Operating income of $6.3 billion with an operating margin of 11.6 percent
- Pre-tax income of $5.2 billion with a pre-tax margin of 9.5 percent
- Earnings per share of $6.25
- Operating cash flow of $7.2 billion
- Free cash flow of $2.0 billion • Adjusted debt to EBITDAR of 3.0x, down from 5.0x at the end of 2022 • Return on invested capital of 13.4 percent, up 5 points over 2022.
For full financial report, see: https://s2.q4cdn.com/181345880/files/doc_earnings/2023/q4/earnings-result/Delta-Air-Lines-Announces-January-Quarter-2024.pdf
Easy Jet (LON: EZJ)
EasyJet plc is a British multinational low-cost airline group headquartered at London Luton Airport, United Kingdom It operates domestic and international scheduled services on over 1,000 routes in more than 30 countries via its affiliate airlines EasyJet UK, EasyJet Switzerland, and EasyJet Europe. EasyJet plc is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. easyGroup Holdings Ltd (the investment vehicle of the airline's founder Stelios Haji-Ioannou and his family) is the largest shareholder with a 29.998% stake (as of June 2020). It employs nearly 15,000 people, based throughout Europe but mainly in the UK.
What we do
We are a low-cost European point-to-point airline.
We use our cost advantage and number one and number two network positions in strong markets to deliver low fares and operational efficiency on point-to-point routes, with our people making the difference by offering friendly service for our customers.
Our sustainable business model makes travel easy and affordable and drives growth and returns for shareholders. The success of our business depends on a number of key resources:
Capital
easyJet has a strong capital base, with market capitalisation of c.£4 billion and a net cash position of £213 million on 30 September 2016. easyJet's credit ratings are amongst the strongest in the world for an airline.
Aircraft
easyJet operates a modern Airbus fleet, using the A320 family of aircraft, and is up gauging its fleet to 186 seat cabins and the new fuel efficient A320neo aircraft. This provides customer, operating and maintenance benefits to the Group.
People
easyJet has a dedicated workforce of over 10,000 people, including 2,865 pilots and 6,516 cabin crew members as of 30 September 2016.
Technology and insight
easyJet leverages its customer relationship management capabilities, driving revenue by increasing customer loyalty and implementing its wider digital strategy. Our increasingly sophisticated use of data will enable us to continue to make travel easy and affordable in the longer term.
Stakeholders
easyJet interacts with a number of stakeholders in its operations, such as customers, suppliers, (including infrastructure owners and operators e.g., airports, air traffic control), regulators and national governments.
https://corporate.easyjet.com/about/what-we-do
24 January 2024
easyJet Trading Update for the quarter ended 31 December 2023
Summary
easyJet's financial performance in the first quarter showed year-on-year improvement at a headline level, with underlying progress stronger still. The onset of conflict in the Middle East on 7 October had short term impacts from a pause in flights to Israel and Jordan (which currently remains in place) and a temporary slowdown in flight bookings for the wider industry. Demand and bookings have recovered strongly from late November. easyJet holidays had another strong quarter, with customer numbers increasing by 48% compared to the same period last year, and a profit of £30 million, a 131% increase year-on-year.
easyJet's seasonal winter loss for the first half of FY24 is also expected to improve year-on-year despite a direct impact1 of c.£40 million (and further indirect impacts) from the conflict in the Middle East. This improvement comes as a result of disciplined capacity growth where demand is strongest, alongside productivity benefits. easyJet expects cost per seat excluding fuel to remain broadly flat in the first half of
2024, with fuel costs c.7% higher.
Although still early, bookings for summer 2024 are building well, with the turn of the year bookings period showing an increase in both volume and pricing compared to the same period last year. Demand for easyJet's primary airport network remains strong, with RPS for the second half of FY24 currently well ahead year-on-year. This positive momentum is also evident in the holidays business, where we continue to expect customer growth to exceed 35% year-on-year.
Johan Lundgren, CEO of easyJet, commenting on the results said:
"We delivered an improved performance in the quarter which is testament to the strength of demand for our brand and network. The popularity of easyJet holidays also continues to grow, with 48% more customers in the period
"We see positive booking momentum for summer 2024 with travel remaining a priority for consumers. Flight and holidays bookings took off strongly during the traditional busy turn of year sales period, as customers opted to secure their summer holidays to firm favourites like Spain and Portugal alongside destinations further afield like Greece and Turkey.
"easyJet remains focused on delivering for our customers in the coming months, while also expecting to deliver continuing performance gains
For full financial report, see: https://corporate.easyjet.com/files/doc_financials/2024/q1/FY24-Q1-RNS-vf.pdf
Emirates
About us
Emirates connects the world to, and through, our global hub in Dubai. We operate modern, efficient, and comfortable aircraft, and our culturally diverse workforce delivers award-winning services to our customers across six continents every day.
- 56 million passengers flown in 2019 - 2020.
- 157 destinations
- 270 fleet size
- 172 nationalities
- 59,519 employees (as of 31 March 2020)
https://www.emirates.com/au/english/about-us/
13 May 2022
Emirates Group Announces 2021-22 Results
Group records annual loss of AED 3.8 billion (US$ 1.0 billion) due to the ongoing COVID-19 pandemic impact, a significant improvement from last year with dnata returning to profitability.
- Group revenue of AED 66.2 billion (US$ 18.1 billion) increased by 86% with strong customer demand as worldwide travel restrictions ease
- Ends year with an improved and strong cash balance of AED 25.8 billion (US$ 7.0 billion)
Emirates reports a significantly reduced loss of AED 3.9 billion (US$ 1.1 billion) compared with AED 20.3 billion (US$ 5.5 billion) loss in the previous year
- Revenue up 91% to AED 59.2 billion (US$ 16.1 billion), as airline expanded global capacity and reinstated more passenger flights
- Airline capacity increased by 47% to 36.4 billion ATKMs, with final five A380 aircraft added to its fleet
dnata reports a profit of AED 110 million (US$ 30 million), a solid turnaround from its AED 1.8 billion (US$ 496 million) loss in the previous year
- Revenue increased by 54% to AED 8.6 billion (US$ 2.3 billion), reflecting recovery from the pandemic across all business divisions in the UAE and worldwide
- Expands global footprint with the takeover of easyJet's global onboard retail services and the opening of new cargo, airport hospitality and retail facilities
The Emirates Group today released its 2021-22 Annual Report which shows strong recovery across its businesses. dnata returns to profitability, and significant revenue improvements were reported across both Emirates and dnata as the Group rebuilt its air transport and travel-related operations which were previously cut-back or curtailed by the COVID-19 pandemic.
For the financial year ended 31 March 2022, the Emirates Group posted a loss of AED 3.8 billion (US$ 1.0 billion) compared with an AED 22.1 billion (US$ 6.0 billion) loss for last year. The Group's revenue was AED 66.2 billion (US$ 18.1 billion), an increase of 86% over last year's results. The Group's cash balance was AED 25.8 billion (US$ 7.0 billion), up 30% from last year mainly due to strong demand across its core business divisions and markets, triggered by the easing of pandemic-related restrictions.
His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group, said: "This year, we focussed on restoring our operations quickly and safely wherever pandemic-related restrictions eased across our markets. Business recovery picked up pace particularly in the second half of the year. Robust customer demand drove a huge improvement in our financial performance compared to our unprecedented losses of last year and we built up our strong cash balance.
"The health and safety of our people and customers remained a key priority as the world navigated its second full year of the pandemic. Across Emirates and dnata, we responded to dynamic market conditions with agility, and introduced innovative products and services to meet our customers' needs and provide them with the best possible experience.
"2021-22 was also a significant year as the UAE marked its 50th anniversary and hosted the world at Expo 2020 Dubai which generated increased global engagement and visitation to the UAE. The Emirates Group was proud to play our part in contributing to the Expo's success and to the UAE's jubilee events."
In 2021-22, Emirates received a further capital injection of AED 3.5 billion (US$ 954 million) from its ultimate shareholder, the Government of Dubai, and the Group tapped on various industry support programmes and availed a total relief of nearly AED 0.8 billion in 2021-22.
As Emirates and dnata ramped up operations, employees previously on furlough or made redundant were recalled and rehired, and new recruitment drives were held to replenish the Group's talent pool and boost its future capabilities. As a result, the Group's total workforce increased by 13% to 85,219 employees, representing over 160 different nationalities.
In 2021-22, the Group collectively invested AED 7.9 billion (US$ 2.2 billion) in new aircraft and facilities, and the latest technologies to position the business for recovery and future growth. It also continued to progress its environmental strategy focussed on reducing carbon emissions, consuming resources responsibly, and conserving wildlife and habitats. During the year, the Group supported community, humanitarian and philanthropic initiatives in its various markets, as well as innovation incubators, and other programmes that nurture future solutions for industry growth.
Sheikh Ahmed said: "For the Emirates Group, 2021-22 was largely about recovery, after the toughest year in our Group's history. It's not just about restoring our capacity, but also augmenting our future capabilities as we rebuild. Our aim is to build back better and stronger, so that we can deliver even better experiences to our customers and offer more support to the communities we serve.
"We expect the Group to return to profitability in 2022-23, and are working hard to hit our targets, while keeping a close watch on headwinds such as high fuel prices, inflation, new COVID-19 variants, and political and economic uncertainty.
"Our steady investments in infrastructure, technology, people, and partnerships, will continue to give us the ability and advantage in delivering industry-leading products and value to our customers. As Dubai and the UAE move ahead with its strategy for the next 50 years and beyond, the Emirates Group is well positioned to play our role in contributing to economic growth, facilitating global engagement, and making a positive impact on people and communities."
Emirates performance
Emirates' total passenger and cargo capacity increased by 47% to 36.4 billion ATKMs in 2021-22, as the airline continued to reinstate passenger services across its network in line with the lifting of pandemic-related flight and travel restrictions.
From 120 destinations at the start of the financial year, to increased operations and capacity growth across over 140 destinations by 31 March 2022, Emirates was able to respond dynamically to serve customer demand wherever opportunities arose, thanks to the resilience of its people and business model. In July, the airline launched a new route to Miami, bringing its total passenger gateways in the US to 12.
To serve the strong rebound in travel demand, Emirates deployed its flagship A380 aircraft to even more cities during the year, bringing its A380 network to 29 destinations as of 31 March 2022.
Helping travellers access even more destinations, in 2021-22, Emirates reinforced its strategic partnerships with Qantas and flydubai, and expanded its interline and codeshare partnerships across Europe, the Americas, Africa and Asia including with: Aeromar, airBaltic, Airlink, Azul, Cemair, Garuda Indonesia, Gulf Air, Maldivian, South African Airways and TAP Air Portugal. Emirates also signed agreements and launched initiatives with tourism partners in various destinations to support travel and tourism recovery.
Emirates received its final five new A380 aircraft during the financial year, all equipped with its latest cabin interiors including Premium Economy seats. It also phased out 2 older aircraft comprising of 1 Boeing 777-300ER and 1 Freighter, leaving its total fleet count at 262 at the end of March. Emirates' average fleet age remains at a youthful 8.2 years.
Emirates' order book of 197 aircraft remains unchanged at this time. The airline is firmly committed to its long-standing strategy of operating a modern and efficient fleet, which underscores its "Fly Better" brand promise, as young aircraft are better for the environment, better for operations, and better for customers.
With significantly enhanced capacity deployment across most markets, Emirates' total revenue for the financial year increased 91% to AED 59.2 billion (US$ 16.1 billion). Currency fluctuations this year impacted the airline's profitability negatively by AED 348 million (US$ 95 million).
Total operating costs increased by 30% from last financial year. Cost of ownership (depreciation and amortisation) and fuel cost were the two biggest cost components for the airline in 2021-22, followed by employee cost. Fuel accounted for 23% of operating costs compared to 14% in 2020-21. The airline's fuel bill more than doubled to AED 13.9 billion (US$ 3.8 billion) compared to the previous year, driven by a higher uplift of 66% in line with capacity expansion and a higher average fuel price which was up by 75%.
With the removal of pandemic-related flight and travel restrictions globally, the airline managed to substantially improve its financial results and reported a loss of AED 3.9 billion (US$ 1.1 billion) after last year's AED 20.3 billion (US$ 5.5 billion) loss, and a loss margin of 6.6%, significantly improved compared to 65.6% last year.
Emirates carried 19.6 million passengers (up by 199%) in 2021-22, with seat capacity up by 150%. The airline reports a Passenger Seat Factor of 58.6%, compared with last year's passenger seat factor of 44.3%; and a 10% decline in passenger yield to 35.1 fils (9.6 US cents) per Revenue Passenger Kilometre (RPKM), due to the change in route mix, fares and currency. Seat load factor and yield results cannot be compared against the previous year's performance due to the ongoing unusual pandemic situation.
Emirates continued to invest in its products and services to deliver ever better customer experiences. This year, it announced a major retrofit programme to equip 120 of its 777 and A380 aircraft with its new Premium Economy seats and the latest cabin interiors.
It also accelerated digital initiatives to provide customers with smoother and safer journeys, from the quick and secure verification of COVID-19 travel documents, to more biometrics and contactless touchpoints at its Dubai hub.
Emirates continued to lead the industry with initiatives that provide customer assurance as travel restrictions eased and more people made travel plans. It extended its generous rebooking waivers and complimentary COVID-19 medical cover for all customers; and introduced new ways for Emirates Skywards members to earn Miles while extending the expiry of miles and tier status.
In this 2nd pandemic year, Emirates SkyCargo once again put in a stellar performance and contributed to 40% of the airline's total transport revenue through its ability to respond rapidly to changing demand patterns in a distorted global marketplace.
Emirates SkyCargo maintained its edge in the global airfreight industry by focusing its customers, bringing innovative solutions to the market, and leveraging its fleet and network capabilities.
Rebuilding its network and capacity, the cargo division intelligently deployed its freighter fleet and belly-hold capacity, to meet customer needs. By 30 June 2021, it had restored services to over 90% of its pre-pandemic network.
During the year, Emirates SkyCargo continued to play an important role in getting COVID-19 vaccines and other medical supplies to communities around the world, and keeping trade lanes open for food supplies, e-commerce and other essential goods. In June 2021, it invested to scale up its pharma cool chain infrastructure in Dubai and by March 2022, Emirates SkyCargo had transported 1 billion doses of COVID-19 vaccines.
At the Dubai Airshow 2021, Emirates announced a US$ 1 billion investment to acquire 2 new Boeing 777 freighters and convert 4 existing 777-300ER aircraft into freighters.
With steady and strong air freight demand throughout the year, Emirates' cargo division reported a new record revenue of AED 21.7 billion (US$ 5.9 billion), an increase of 27% over last year.
Freight yield per Freight Tonne Kilometre (FTKM) decreased by 3% as more cargo capacity returned to the global market, but generally remained at high levels compared to the pandemic marketplace due to steady and strong demand.
Tonnage carried increased by 14% to reach 2.1 million tonnes, due to the growth in available bellyhold capacity for the entire year with the reinstatement of more passenger services. At the end of 2021-22, Emirates' SkyCargo's total freighter fleet stood at 10 Boeing 777Fs.
Emirates' hotels portfolio doubled revenue over last year to AED 602 million (US$ 164 million) as it re-opened more facilities to serve the upswing in tourism traffic and the gradual recovery of the meetings and conferences industry.
During the year, Emirates successfully restructured and extended various aircraft leases. The support from aviation lessors and financing partners during these challenging times reflect the financial community's confidence in Emirates' business model, and its mid to longer term prospects.
In addition to the AED 9.7 billion (US$ 2.6 billion) financing that was raised for aircraft and general corporate purposes in 2021-22, Emirates has already received committed offers to finance two aircraft deliveries due in 2022-23.
Emirates closed the financial year with solid cash assets of AED 20.9 billion (US$ 5.7 billion), 38% higher compared to 31 March 2021.
dnata performance
Recovery from the pandemic was felt across all dnata businesses, and in 2021-22 dnata returned to profitability with a profit of AED 110 million (US$ 30 million).
With growing flight and travel activity across the world, dnata's total revenue increased by 54% to AED 8.6 billion (US$ 2.3 billion). dnata's international business accounts for 62% of its revenue.
dnata continued to lay the foundations for future growth with investments in 2021-22 amounting to AED 370 million (US$ 101 million).
During the year, dnata invested significantly in its cargo handling capabilities. It expanded existing facilities in Sydney, Australia; opened a state-of-the-art cargo centre at London Heathrow airport; and announced a fully automated cargo centre to be built at 'dnata Cargo City' at Amsterdam Schiphol Airport. It also introduced an advanced "OneCargo" system which digitises and automates business and operational functions at its Iraq cargo operations, with plans to roll out the system across its global cargo network.
In 2021-22, dnata's operating costs increased by 14% to AED 8.4 billion (US$ 2.3 billion), in line with expanded operations in its Airport Operations, Catering and Travel divisions across the world.
dnata's cash balance improved by AED 208 million to AED 4.9 billion (US$ 1.3 billion). Net cash used in financing activities, primarily payments for loans and leases, amounted to AED 745 million (US$ 203 million), while the business utilised net cash of AED 246 million (US$ 67 million) in essential investing activities. The business saw a positive operating cash flow of AED 1.2 billion (US$ 332 million) in 2021-22, a reflection of the substantial improvements in revenues.
Revenue from dnata's Airport Operations, including ground and cargo handling increased to AED 5.7 billion (US$ 1.6 billion).
The number of aircraft turns handled by dnata globally grew by 82% to 527,501, cargo handled increased by 10% to 3.0 million tonnes, reflecting the increase in flight activity across the globe as dnata's customers re-started their operations wherever market restrictions on flights and travel were lifted.
During 2021-22, dnata expanded its global airport operations footprint into Africa. It signed a concession agreement with The Government of Zanzibar, where dnata will oversee the operations of the island's newly-built international terminal with its partners, including Emirates Leisure Retail (ELR) who will partner with MMI as master concessionaire for all food and beverage, duty free and commercial outlets at the terminal.
marhaba, dnata's airport hospitality brand, marked its 30th year of operations with the launch of its signature meet and greet services at four of Australia's major airports, a new lounge in Zurich Airport, and a re-designed experience at its flagship lounge at Dubai International.
dnata's Catering business accounted for AED 1.7 billion (US$ 455 million) of dnata's revenue, up by 60%. The inflight catering business uplifted 39.9 million meals to airline customers, more than double the number of meals from last year, as its airline customers across the world restored their flight operations.
Significant customer wins during the year include BA CityFlyer, which led to dnata Catering launching operations at London City Airport; and the global inflight retail services contract for easyJet where dnata's team of inflight retail experts will develop and manage bespoke onboard retail programmes and solutions for the airline.
It also saw significant activity in Australia. As the country re-opened its borders to international travellers, dnata worked closely with airline customers to support their resumption of flight operations. dnata Catering also continued to grow its retail food business with ready-made meals developed by Snapfresh Australia launched in Aldi and Costco stores nationwide.
Revenue from dnata's Travel Services division has significantly grown by 434% to AED 694 million (US$ 189 million). The reported total transaction value (TTV) of travel services sold increased by 912% to AED 2.3 billion (US$ 632 million), a dramatic reversal from last year. These increases reflect last year's abnormal situation where the business saw high levels of COVID-19-related booking cancellations.
During the year, dnata introduced several new products and services in the UAE, capitalising on its market expertise, Dubai's open borders for international travel, the city's hosting of Expo 2020 as well as other major conferences and sporting events.
For its corporate travel customers, dnata partnered with ExpensePoint to offer an advanced expense reporting solution; renewed a partnership with one of the world's largest VAT reclaim specialists that will bring additional saving opportunities for duty travel claims; and implemented hybrid meetings and events solutions to provide customers a sustainable alternative to hosting corporate engagements during lockdown.
In the UK, dnata's Travel Republic brand introduced a new 'Secure Trust Account' for package holiday customers that guarantees prompt refunds for customers who have to cancel their flight-inclusive package holiday, as funds are kept secure in a separate account.
dnata also launched its Gold Medal brand in the Kingdom of Saudi Arabia this year, offering its extensive portfolio of travel products to independent travel agents.
https://www.emirates.com/media-centre/emirates-group-announces-2021-22-results/
Etihad Airways
Etihad Airways is the second flag carrier of the United Arab Emirates. Its head office is in Khalifa City, Abu Dhabi, near to Abu Dhabi International Airport. Etihad commenced operations in November 2003.It is the second largest airline in the UAE after Emirates. Its parent company is the Etihad Aviation Group.
Our people
Etihad Aviation Group is a diversified global aviation and travel group comprising seven business divisions - Operations, Commercial, Maintenance, Repair & Overhaul (MRO), Human Resources & Organisational Development, Finance, Digital & Innovation and Transformation.
The success of the Etihad Aviation Group is driven by its people, and the ability to source, develop, engage, and deliver a highly focused multicultural workforce that is committed to its customers, and to each other.
Our network
Etihad Airways currently serves 84 passenger and cargo destinations in 49 countries.
Our fleet
Etihad Airways' fleet is one of the youngest in the world and, as of 31 August 2019 comprises 108 passenger and cargo aircraft.
https://www.etihadaviationgroup.com/content/dam/eag/corporate/etihadaviation/en-ae/pdfs/Fast_Facts_and_Figures/Fast_Facts_and_Figures_August_2019_En.pdf
6 March 2024
Etihad Airways announces AED 1.4 billion (USD $ 394 million) operating result for the full year 2023
- ~40 per cent more passengers, from 10 million to 14 million, year-on-year
- Passenger revenue increased by AED 4 billion (U.S.$ 1.1 billion) to AED 16.7 billion (U.S.$ 4.5 billion)
- Cost per Seat Kilometre excl. fuel decreased by 7 per cent year-on-year
- Launched 15 new destinations, added 14 aircraft including four A380s
- Hired over 2,300 new employees, primarily pilots and cabin crew
- Transferred Abu Dhabi hub operations to state-of-the-art Zayed International Airport
Etihad Airways today announced its results for the full year 2023, recording AED 1.4 billion (U.S.$ 394 million) operating result, driven by AED 4 billion (U.S.$ 1.1 billion) year-on-year growth in passenger revenue, while decreasing unit cost excl. fuel by seven per cent, marking a significant improvement in passenger business profitability.
The airline carried 14 million passengers last year, up ~40 per cent from the year before, underlining continued robust demand for travel across its growing network, with an overall load factor of 86 per cent, compared to 82 per cent in 2022. Total revenue reached AED 20.3 billion (U.S.$ 5.5 billion) in the year ended 31 December 2023, compared to AED 18.3 billion (U.S.$ 5.0 billion) in 2022.
Through 2023, the airline launched 15 new destinations, including Lisbon, Copenhagen, Kolkata and Osaka, and grew its operating fleet by 14 aircraft, to support ~30 per cent growth in Available Seat Kilometres (ASKs).
The airline also successfully strengthened its balance sheet by reducing net leverage to 2.5x net debt to EBITDA, from 5.0x in 2022, off the back of strong cash-flow generation and controlled CAPEX, supported by improving aircraft utilisation and re-activating previously parked aircraft.
Etihad's strong performance in 2023 follows a successful reorganisation of its business, sharpening its focus on the core airline offering by divesting from ancillary support services and businesses; restructuring the fleet to focus on the most efficient and advanced aircraft; streamlining and rationalising its destination network; and increasing focus on productivity and cost savings.
Etihad's passenger widebody fleet comprised 78 per cent new generation aircraft, one of the highest ratios in the industry, underscoring its dedication to operational efficiency and contributing significantly to its reduced emission targets.
His Excellency Mohammed Ali Al Shorafa, Chairman of Etihad Aviation Group, said: "A sincere thank you to our customers, as well as the Etihad family for giving flight to our ambition, and delivering the reliable, best-in-class service that is the hallmark of our operation. The team has continued to make our airline stronger and more efficient, while delivering extraordinary customer experiences.
"I am confident we will continue to build on this solid foundation as we grow our network, enhance our offering and connect even more people with Abu Dhabi as we support and promote the Emirate's tourism ambitions, delivering our vision to be the airline that everyone wants to fly."
The airline also saw an impressive rise in positive customer sentiment across 2023, buoyed by the opening of its new home, Abu Dhabi Zayed International Airport, at the end of the year.
Antonoaldo Neves, Chief Executive Officer of Etihad Airways, said: "Following our strong performance in 2023, in which we achieved AED 1.4 billion (U.S.$ 394 million) operating result and a net profit of AED 525 million (U.S.$ 143 million), our task at hand is to further strengthen our business as we continue our growth strategy and pursue further margin expansion opportunities.
"The execution capability of the Etihad team is outstanding, and it's thanks to their relentless hard work that we have been able to achieve these results. I am confident we have the best team in the world. This accomplishment underscores our commitment to sustainable, profitable growth, robust cost control and operational efficiency.
"Looking forward, we will continue to deliver on the mandate of our shareholder, which is to be a financially viable airline delivering extraordinary customer experiences."
Key 2023 highlights a glance:
- Total Revenue Growth: total revenue saw a significant increase, reaching AED 20.3 billion (U.S.$ 5.5 billion) — an 11 per cent uplift from the previous year
- Passenger revenue: passenger revenue grew AED 4 billion (U.S.$ 1.1 billion), reaching AED 16.7 billion (U.S.$ 4.5 billion)
- Cargo revenue: following the exceptional yield registered in 2022 due to Covid, Cargo revenue was AED 3.4 billion (U.S.$ 914 million) in 2023, -38 per cent on 2022, mirroring the overall cooling in global cargo rates
- Cost of operations: both Cost per Available Seat Kilometre (CASK) and CASK excl. fuel decreased by 8 per cent and 7 per cent year-on-year, respectively
- Operating result and net profit: Etihad realised an operating result of AED 1.4 billion (U.S.$ 394 million) and a net profit of AED 525 million (U.S.$ 143 million), underscoring a strong financial performance and effective operational strategy over the year
- Balance sheet: significant reduction in net leverage, reaching 2.5x (net debt to EBITDA) from 5.0x in 2022
- Passenger numbers surge: Etihad experienced remarkable growth in passenger numbers, with a total of 14 million passengers, marking a substantial ~40 per cent increase
- Passenger load factor: Etihad's passenger load factor stood at 86 per cent, up from 82 per cent in 2022, among the highest among competitors, demonstrating the airline's ability to optimise fleet usage and route planning
- Network expansion: Etihad's network expanded to 72 destinations, showcasing its commitment to increasing accessibility and connectivity for its Abu Dhabi hub and customers, while also exploring new markets and opportunities for growth.
https://www.etihad.com/en-my/news/etihad-airways-announces-aed-14-billion-usd--394-million-operating-result-for-the-full-year-20231
EVA Air (TPE: 2618)
Eva Air is a subsidiary of the privately held Evergreen Group.
Company History
2020
- AirlineRatings.com recognized EVA the 3rd of "World's Top 20 Safest Airlines".
- EVA was recognized the 9th of "World's Safest Airlines" by AERO International, a magazine in Germany.
2019
- TripAdvisor recognized EVA "Best Airline in Asia", "Best Business Class in Asia", "Best Premium Economy Class in Asia" and 3rd of "World's Best Airlines".
- EVA recognized as "The Best Business Class Onboard Amenities Kit (Georg Jensen)", "The Best Business Class Onboard Amenities Kit (Salvatore Ferragamo)", "The Best Premium Economy Class Onboard Amenities Kit (Sport b.)", "The Best Economy Class Onboard Textiles" by Onboard Hospitality, a transportation magazine of U.K. PAX International, a Canadian professional aviation magazine, awarded EVA "Asia Best Economy Class Amenity Kit (Sport b.)". The world- renowned magazine, TravelPlus, awarded EVA "The Best Premium Economy Class Amenity Bag (FURLA)".
- EVA launched direct flights between Taipei to Nagoya, Aomori, Matsuyama, and Da Nang.
- SKYTRAX announced EVA as the "5-Star Airline" for four consecutive years, 2019 "World's Best Airline Cabin Cleanliness" and "World's Best Economy Class Catering" and ranked 6th among "The World's Top Ten Best Airlines".
- EVA was awarded the "Five Star Global Airline" and "Passenger Choice Award- Best Overall In Eastern Asia" by APEX.
- AirlineRatings.com recognized EVA the 8th of "World's Top-20 Airlines" and "World's Safest Airlines" for six consecutive years.
- EVA was awarded the Taiwan Corporate Sustainability Report Platinum Award.
2018
- EVA Air won the Gold Medal for 2017 "Best Business Class Sparkling" by leading magazine Business Traveller.
- EVA started code share flights with Juneyao Air and provided flight services from Taoyuan-Pudong and Kaohsiung-Pudong.
- TripAdvisor recognized EVA "Top 10 Major Airlines in Asia Pacific", "Best Business Class", "Best Premium Economy Classes", "Travelers' Choice Major Airlines in Asia" and 5th of "World's Top-10 Best Airlines"
- EVA was the only company that had been awarded the top 5% of the corporate governance evaluation by Taiwan Stock Exchange among the TWSE/TPEx Listed Companies for the three consecutive years.
- EVA launched direct flight service between Taipei-Chiang Mai.
- SKYTRAX announced EVA as the "5-Star Airline", 2018 "The World's Best Airport Services" and ranked 5th among "The World's Top Ten Best Airlines".
- EVA had codeshare flights with Copa Airlines to provide flight services from Taoyuan-Los Angeles-Panama City, Taoyuan- San Francisco-Panama City, Taoyuan-Chicago-Panama City and Taoyuan-New York-Panama City.
- AirlineRatings.com recognized the "World's Top-10 Best International Airlines" and "Best Long-Haul Airline in Asia Pacific.
- EVA was awarded as Top 50 Taiwan Corporate Sustainability Report Awards.
2017
- EVA was awarded CAA's 2016 "Golden Flyer Award" for International and Cross-Strait Route Group.
- The Infinity Lounge in Taoyuan Airport was rewarded as 2016 "Top 10 First and Business Class Airline Lounges" by SKYTRAX.
- Business Traveler awarded EVA the Gold Medal of 2016 "Best Business Class Cellar" and "Best First Class Sparkling".
- EVA ranked the world's safest airlines on the annual index reported by Germany's AERO International Magazines for 15 consecutive years.
- TripAdvisor honored EVA "Top 10 Major Airlines in Asia Pacific" and "Best Airline- Taiwan".
- SKYTRAX announced EVA as the "5-Star Airline", 2017 "Best Airline Cabin Cleanliness ","Best Business Class Comfort Amenities" and ranked 6th among "The World's Top Ten Best Airlines".
- EVA was listed 10th of 2017 "The World's Best International Airlines" on the Travel + Leisure Magazine's.
- EVA and UNI Air launched new flights from Songshan to Tianjin, Hangzhou and Chongqing.
- The first 777 freighter B-16781 was delivered in Boeing Company in Seattle, U.S.A.
2012 - 2016
- EVA Sky Jet Center was available to provide services which makes the service function in Taipei Songshan Airport more complete.
- EVA started 777-300ER aircraft renovation. The Business Class will be placed by fully-flat beds and named as "Royal Laurel Class".
- EVA recognized as "The World's Best Airline" from CommonWealth Magazine's 2012 Golden Service Awards survey.
- EVA was awarded CAA's 2012 "Golden Flyer Award" for International and Cross-Strait Route Group.
- Became a Star Alliance member since 2013.
- EVA received "Best Business Class White" and "Best Business Class Sparkling" of Business Traveler's Cellar in the Sky Awards 2013.
- EVA acquired general aviation permission and became the first airline company that provided periodical flights and business jets services.
- EVA was recognized as 2014 Top 10 "The World's Best Long-Haul Airlines" by The Telegraph, U.K. leading media, annual reader's select.
- EVA was received "The World's Top Ten Best Airlines" and "Best Airline Cabin Cleanliness" in SKYTRAX's 2015 World Airline Awards.
- EVA signed agreements with the Boeing Company to introduce twenty-four 787 Dreamliners and two 777-300ERs.
- EVA was recognized as Top 10 "World's Safest Airlines" by AirlineRating.com.
- SKYTRAX announced EVA as "5-Star Airline".
- SKYTRAX ranked EVA the 8th of "World Best Airline", "Best Transpacific Airline", "Best Business Class Comfort Amenities" as well as the 3rd "World's Most Loved Airlines" in 2016.
2007 - 2011
- Recognized 2007 "Best Wines on the Wing" by Global Traveler, a famous travel magazine of U.S.
- EVA received 2007 The Richard Teller Crane Founder's Award from the 60th annual International Air Safety Summit (IASS) held in Seoul for "its corporate leadership in aviation safety programs and its superb safety records."In the five years since the coveted award was established, EVA was the first Asian airline and only the second airline among all recipients to receive it.
- EVA ranked 1st as the 2008 "Best Ideal Brand of International Airline" for the second year from the surveys of Taiwanese consumers, Management Magazine.
- Wanderlust, a leading travel magazine U.K., recognized EVA Silver Award of 2008 "Best Airline".
- EVA ranked 2nd "Best White" and 5th "Best Red" of 2007 Cellars in the Sky Awards, published by Business Traveller, a worldwide famous travel magazine.
- Air Cargo World, a famous cargo magazine, ranked EVA 6th of 2008 "Air Cargo Excellence Award". EVA was the second Asian airline to win the prize and surpassed most of famous airlines that were mainly in charge of cargo business.
- EVA was recognized "White Gold Medal" among the Reputation Brand investigation of Reader's Digest magazine.
- EVA and UNI Air provided cross-strait charter flights services since July 4, 2008.
- EVA ranked 1st of "Best Premium Economy Class" in the 2008 Airlines services Rating of SKYTRAX.
- Joined IATA as e-freight airline with the e-AWB service became a milestone of EVA.
- EVA recognized as "World's Best 10 Airlines" by Travel & Leisure, a leading traveling magazine of U.S.
- Selected as "Top 100 Brands" by Ministry of Economic Affairs (MOEA).
- EVA was awarded Travel Weekly's 2011 Magellan Award Gold winner for international economy class.
- Certificated Authorized Economic Operator (AEO) by Customs Administration, Ministry of Finance.
2002 - 2006
- EVA took delivery of its first A330-200 aircraft and introduced new generation of business class, Premium Laurel Class.
- EVA Europe Cargo Center was established.
- EVA made a successful record in Taiwan to assist Taiwan Semiconductor Manufacturing Company Ltd. (TSMC) transport the 8-inch wafer fab from Taipei to Shanghai.
- EVA took delivery of the first 777-300ER aircraft (B-16701) in Boeing Company in Seattle, U.S.
- EVA opened Southern China Cargo Center in Hong Kong, enabling it to acquire market information, integrate regional cargo goods and discuss regional cooperation plans with local forwarders, which make EVA move air freight shipments in and out of the region, prepare business plan, sell and discover customers more efficiently and quickly.
1997 - 2001
- The Company's stocks were listed for sale in OTC.
- The Company moved into new terminal and provided services to customers, after the opening of terminal 2 of Taoyuan International Airport.
- EVA secured approval to transfer its stocks listing from OTC and moved its shares to the Taiwan Stocks Exchange (TWSE).
1989 - 1996
- EVA was founded on March 8, 1989 by Group Chairman Y. F. Chang and registered on April 7, 1989. The Company immediately prepared for flight operation. The authorized capital was NT$ 10 billion and the paid-up capital was NT$2.5 billion.
- First Flight was launched on July 1, 1991.
https://www.evaair.com/en-global/about-eva-air/about-us/company-history/
Finnair (HEL: FIA1S)
Finnair as an investment
Finnair is a network airline that specializes in passenger and cargo traffic between Asia and Europe. Finnair also offers package tours under its Aurinkomatkat-Suntours and Finnair Holidays brands.
Finnair's vision is to shape the wonders of travel with passengers. Finnair's mission is to inspire passengers to effortlessly connect and experience the world in a more sustainable way. Helsinki's geographical location gives Finnair a competitive advantage since the fastest connections between many European destinations and Asian megacities fly over Finland.
Finnair has a stable position in the domestic market and it is poised to benefit from expected growth in Asian markets. Finnair aims to deliver value to its shareholders by focusing on its core business and businesses close to it, and by investing in its competitiveness and growth.
Finnair has a clear strategy for reaching its goals. The foundation for the strategy is seen in the high quality of its operations, Helsinki's favorable geographic position, growing focus markets, clear goals to increase revenue, modern fuel-efficient fleet as well as a strong balance sheet.
Finnair is listed on the Nasdaq Helsinki Mid Cap list.
Sustainable profitable growth
Following a period of accelerated growth, Finnair is now moving into a new phase. The company seeks to grow in line with the market, targeting sustainable and profitable growth.
Finnair's Board of Directors has defined the following targets for the 2020-2025 strategy period:
- Comparable EBIT of over 7.5% over the cycle (at constant fuel and currency)
- ROCE of over 10% over the cycle (at constant fuel and currency)
- On-time-performance of over 85%
- Improved Net Promoter Score and improved employee Net promoter score
- Carbon neutrality by the end of 2045 and a 50 per cent net carbon reduction by the end of 2025 compared to the 2019 level
Finnair aims to deliver these targets through a focused strategy that leverages the geographical advantage of Finnair's hub in connecting Europe and Asia. Due to the COVID-19-pandemic, Finnair is assessing its financial targets and the schedule for reaching them, taking into account the assumption of the company's management that the traffic is expected to recover in 2-3 years on the 2019 level. The financial targets, the timing for their implementation, or both may be amended depending on the length and impact of the COVID-19 pandemic.
Additional guidance for the 2020-2025 strategy period includes the following indicative items:
- Capacity growth, measured in Available Seat Kilometres (ASK) of 3-5% CAGR
- Optimize liquidity, yet keeping cash to sales ratio above 15%
- Gearing ratio 175% at maximum
- Assess renewal and downsizing of the hybrid bond
- Increase the share of owned aircraft vs. leased aircraft
- Keep the dividend policy unchanged
Dividend policy
The aim of Finnair's dividend policy is to pay, on average, at least one-third of the earnings per share as a dividend during an economic cycle. The aim is to take into account the company's earnings trend and outlook, financial situation and capital needs in the distribution of dividends.
https://investors.finnair.com/en/finnair-as-an-investment?_ga=2.145176692.1596177746.1590133959-941304950.1590133959
14 February 2024
Highlights
Finnair Group interim Report 1 January - 31 December 2023
Solid end to a strong year due to robust market and visible results from revenue and cost actions.
October - December 2023
- Revenue increased by 5.8% to 727.2 million euros (687.3*).
- Comparable operating result was 22.5 million euros (17.9) and operating result was 27.3 million euros (38.0).
- Earnings per share were 0.004 euros (0.005**).
- Result for the period included positive, one-off deferred tax items of 46 million euros based on previous years' tax losses.
- Cash funds were 922.0 million euros (1 524.4) and they decreased from Q3 mainly due to the 220-million-euro pension premium loan repayment and the over 200-million-euro acquisition of previously leased aircraft during the period. The equity ratio was 15.6 per cent (9.9).
- Net cash flow from operating activities was -5.7 million euros (29.9), and net cash flow from investing activities was -177.7 million euros (-54.3).*** Gross capital expenditure totalled 268.6 million euros (61.8).
- Number of passengers increased by 6.5 per cent to 2.6 million (2.5).
- Available seat kilometres (ASK) increased by 10.5 per cent to 9,047.5 million kilometres (8,185.5).
- Passenger load factor (PLF) was 73.1% (72.3).
January - December 2023
- Revenue increased by 26.8% to 2,988.5 million euros (2,356.6).
- Comparable operating result was 184.0 million euros (-163.9) and operating result was 191.4 million euros (-200.6).
- Earnings per share were 0.022 euros (-0.060**).
- Result for the period included positive, one-off deferred tax items of 145 million euros based on previous years' tax losses.
- Net cash flow from operating activities was 472.3 million euros (259.0), and net cash flow from investing activities was -464.0 million euros (-75.5).*** Gross capital expenditure totalled 484.2 million euros (199.6).
- Number of passengers increased by 20.8 per cent to 11.0 million (9.1).
- Available seat kilometres (ASK) increased by 15.5 per cent to 36,154.5 million kilometres (31,298.4). This is c. 77 per cent compared to 2019 ASKs. When wet leases are included, ASKs were c. 81 per cent compared to 2019.
- Passenger load factor (PLF) was 76.4% (67.6).
- The Board of Directors proposes to the Annual General Meeting that no dividend be distributed for 2023.
CEO Jaakko Schildt
Finnair carried 2.6 million passengers in October-December and revenue for the period totalled 727.2 million euros (687.3). Comparable operating result was 22.5 million euros (17.9), which means that our continued cost efficiency and sales activities generated good results, supported by a favourable market. Finnair's comparable operating result was positive for the sixth quarter and net profit for the fifth quarter in a row.
Despite the challenging weather conditions during the period, the on-time performance of our flights remained at a reasonable level at 75 per cent. Unlike many other airlines, we were able to operate almost all our flights despite some delays. Our regularity has been top class in global comparison, both during the period and throughout the year. This has supported customer satisfaction, and our Net Promoter Score (NPS) was 32 in the fourth quarter, which is a good level internationally.
During the period, we successfully carried out a rights issue of 570 million euros, a significant step of our strategy implementation. The proceeds from the rights issue were used to strengthen Finnair's balance sheet and financial position to better manage our financial liabilities, support the implementation of our strategy for sustainable profitable growth and ensure our ability to invest in the future. I would like to extend my warmest thanks to all old and new shareholders who participated in our rights issue.
After the rights issue, we repaid, among other things, the remaining tranche of the 400-million-euro capital loan granted by the State of Finland. After that Finnair no longer has debt instruments deemed as equity. We also repaid an additional 120-million-euro tranche on our 600-million-euro pension premium loan. Thanks to these measures, as well as our strong full-year results and cash flow, our balance sheet is healthier than before, and our financial expenses have decreased.
Our strategy implementation continued comprehensively during the period. Among other things, we started our cooperation with our oneworld partner Qantas by wet leasing two A330 aircraft for operations between Australia and Southeast Asia. This is another important step towards ensuring the efficient and profitable use of our fleet while Russian airspace remains closed.
Finnair celebrated its 100th anniversary on 1 November. Our anniversary year was filled with celebrations, but most importantly, it was a year of turnaround, as we left behind a double crisis. Our systematic strategy work carried out since autumn 2022 has borne fruit, and we have returned our business operations to the targeted profitability level on an annual level.
We will continue to implement our strategy and, in addition to profitability, take care of operational quality, reliability and, consequently, customer satisfaction. My thanks for the successful anniversary year and for achieving Finnair's turnaround goes to the entire Finnair personnel. Thank you also to our customers and all stakeholders for the journey together.
Outlook
GUIDANCE ISSUED ON 24 OCTOBER 2023:
Finnair reiterates its capacity guidance estimating that in 2023, it will operate an average capacity of 80-85 per cent, as measured in ASKs, compared to 2019. The capacity estimate also includes the agreed wet leases.
Finnair specifies its previous guidance for full-year 2023 revenue and now estimates it to be in the range of 2.9-3.1 billion euros.
The company also specifies its previous guidance for full-year 2023 comparable operating result and now estimates it to be in the range of 160-200 million euros. The company's comparable operating result estimate is based on the current fuel price and exchange rates.
Specific risks related to Finnair's operating environment have normalised as the impacts of the pandemic have faded and the markets have adapted to the closure of Russian airspace. However, risks related to the impacts of inflation and rising interest rates on demand and costs remain elevated, thus, causing uncertainty in the operating environment. Also the prevailing situation in the Middle East causes uncertainty in the operating environment.
Finnair will update its outlook and guidance in connection with the financial statements bulletin for 2023.
NEW GUIDANCE ON 14 FEBRUARY 2024:
Global air traffic is expected to continue growing in 2024. However, risks related to the impact of inflation and higher interest rates on demand and costs remain elevated, causing uncertainty in the operating environment. International conflicts and global political instability also cause uncertainty in the operating environment. These factors may affect the demand for air travel and cargo.
Finnair plans to increase its total capacity by more than 10 per cent in 2024. The capacity estimate includes the agreed wet leases. This growth will mainly focus on Asia and Europe. Finnair's revenue is expected to grow at a somewhat slower pace than capacity in 2024.
In accordance with its disclosure policy, Finnair provides full-year comparable EBIT estimate in connection with the half-year report in July.
Finnair will update its outlook and guidance in connection with the Q1 2024 interim report.
https://investors.finnair.com/en/financial-information/result-center
Hawaiian Airlines (NASDAQ: HA)
Our history
Hawaiian Airlines was incorporated on January 30, 1929 under the name Inter-Island Airways Ltd. That year, thousands gathered in Honolulu to witness the departure of Hawaii's first scheduled inter-island flights to Maui and the Big Island of Hawaii. The fleet was comprised of two eight-passenger Sikorsky S-38 amphibian planes; six years later, larger 16-passenger Sikorsky S-43s were added to accommodate increased traffic and newly authorized inter-island airmail service.
https://www.hawaiianairlines.com/about-us/history
30 January 2024
Hawaiian Holdings Reports 2023 Fourth Quarter and Full Year Financial Results
Hawaiian Holdings, Inc. (NASDAQ: HA) (the "Company"), parent company of Hawaiian Airlines, Inc. ("Hawaiian"), today reported its financial results for the fourth quarter and full year 2023.
"I am grateful to our team who accomplished an extraordinary amount, including realizing foundational investments during a challenging year," said Hawaiian Airlines President and CEO Peter Ingram . "Demand is solid across our networks, our brand remains strong in Japan as the market recovers, and we have seen steady improvement in travel to Maui. We expect the combination with Alaska will create an even more competitive combined airline, positioning the Hawaiian Airlines brand to flourish in the years ahead."
|
Fourth Quarter 2023 - Key Financial Metrics and Results |
||||||||
|
GAAP |
YoY Change |
Adjusted (a) |
YoY Change |
|||||
|
Net Loss |
($101.2M) |
($51.0M) |
($122.7M) |
($98.0M) |
||||
|
Diluted EPS |
($1.96) |
($0.98) |
($2.37) |
($1.88) |
||||
|
Pre-tax Margin |
(19.0) % |
(10.4) pts. |
(22.9) % |
(18.6) pts. |
||||
|
EBITDA |
($71.8M) |
($65.7M) |
($98.1M) |
($123.7M) |
||||
|
Operating Cost per ASM |
15.30¢ |
(0.16)¢ |
11.77¢ |
0.88¢ |
||||
|
Full Year 2023 - Key Financial Metrics and Results |
||||||||
|
GAAP |
YoY Change |
Adjusted (a) |
YoY Change |
|||||
|
Net Loss |
($260.5M) |
($20.4M) |
($313.5M) |
($103.1M) |
||||
|
Diluted EPS |
($5.05) |
($0.38) |
($6.08) |
($2.00) |
||||
|
Pre-tax Margin |
(12.1) % |
(1.0) pts. |
(14.5) % |
(4.5) pts. |
||||
|
EBITDA |
($103.6M) |
($41.8M) |
($169.0M) |
($138.0M) |
||||
|
Operating Cost per ASM |
14.90¢ |
(0.36)¢ |
11.29¢ |
0.51¢ |
||||
Statistical data, as well as a reconciliation of the reported non-GAAP financial measures, can be found in the accompanying tables.
Liquidity and Capital Resources
As of December 31, 2023 the Company had:
- Unrestricted cash, cash equivalents and short-term investments of $908.5 million
- Outstanding debt and finance lease obligations of $1.7 billion
- Liquidity of $1.1 billion , including an undrawn revolving credit facility of $235 million
Revenue Environment
Following the Maui wildfires, Hawaiian saw a steady recovery of travel from North America to Maui. Non-Maui routes and international markets ex- Japan continued to perform and demand remained solid. In international markets, strong U.S. and other point-of sale demand, coupled with an increase in Japan -originating traffic, contributed to a 20.7% point increase in International passenger load factor year-over-year. Premium products continued to demonstrate strong performance for the fourth quarter and full year 2023.
The Company's overall operating revenue for the fourth quarter 2023 was down 8.5% compared to the fourth quarter of 2022 on 3.3% higher capacity. In addition to the impact from the Maui wildfires, pandemic-related spoilage and revenue from pent-up travel demand in 2022 drove the year-over-year decline. The Company's overall operating revenue for 2023 was up 2.8% from 2022 on 8.1% higher capacity.
Other Revenue for fourth quarter 2023 was down 15.9% compared to the same period in 2022, primarily driven by a decrease in cargo revenue. Cargo activity in 2022 was higher than normal due to lingering pandemic-related effects. Full year 2023 Other Revenue was down 16.2% compared to 2022, driven by decreases in cargo revenue and contract services.
Fourth Quarter and Full Year 2023 Highlights
Routes and scheduled services
- Operated 108% of its 2022 capacity: 96%, 112%, and 172% capacity on its North America , Neighbor Island, and International routes, respectively
- Launched ticket sales for new daily nonstop service between Salt Lake City and Honolulu , which will commence on May 15, 2024
- Announced expansion of service in Sacramento with four weekly flights to Līhuʻe, Kauaʻi starting May 24, 2024 and three weekly flights to Kona on the Island of Hawaiʻi starting May 25, 2024
Awards and Recognition
- Ranked highest for economy travel customer satisfaction in Consumer Reports ' 2023 Airline Travel Buying Guide
- Named the best domestic airline in Travel + Leisure's 2023 "World's Best Awards" annual reader survey
- Rated as one of the top airlines in the U.S. by Condé Nast Traveler readers for the 2023 Readers' Choice Awards
- Awarded best new business class in 2023 by TheDesignAir for its new business class product, the Leihōkū Suites
Guest experience
- Received FAA approval of the Starlink system on the Airbus A321neo, which is currently being installed on that fleet. Hawaiian will be the first major airline to put this technology on-board, and it is expected to be the fastest, most capable inflight connectivity available worldwide, offered free to every guest
- Collaborated with Hawaiʻi lifestyle brand Noho Home to design Hawaiian's new in-flight amenity kits and soft goods with a focus on sustainability and rooted in aloha. Amenities are made with responsibly sourced materials and offered to Business Class guests on long-haul flights a la carte to minimize waste
Environmental, Social and Corporate Governance
In May 2023 , the Company published its 2023 Corporate Kuleana (Responsibility) Report, providing progress on Environmental, Social and Governance (ESG) priorities, which included a decarbonization roadmap with interim targets to lower greenhouse gas emissions focused on replacing petroleum jet fuel with sustainable aviation fuel (SAF); plans to decrease life-cycle jet fuel emissions per revenue ton mile by 45% by 2035; and efforts to replace 10% of conventional jet fuel with SAF by 2030. The report also highlights Hawaiian's employee diversity, including the highest percentage of women pilots of any major U.S. airline.
Other activities in 2023 include the following:
- Engaged over 1,500 volunteers who donated over 8,500 hours of community service work for more than 200 organizations throughout Hawaiʻi and other markets we serve
- Donated $109,500 through the Hawaiian Airlines Foundation as a grant to Kāko'o 'Ōiwi, a nonprofit organization dedicated to advancing the cultural, spiritual and traditional practices of the Native Hawaiian community. The grant funded the construction of a produce washing and packing facility to serve small, family farms in the area
- Brought the Holoholo Challenge virtual race series to Kauaʻi which raised almost $25,000 in proceeds benefiting the National Tropical Botanical Garden's McBryde Garden , a 259-acre conservation and research area that is home to the world's largest collection of native Hawaiian flora
- Provided wide-ranging support for the Maui Community , including direct gifts of $50,000 each to the Hawaiʻi Foodbank, Maui Food Bank, and Hawaiʻi Community Foundation's Maui Strong Fund, and a donor-matching HawaiianMiles campaign for the American Red Cross Hawaiʻi totaling approximately 140 million HawaiianMiles. Additionally, Hawaiian assisted with the evacuation of displaced residents and visitors and the transportation of first responders to Maui , and also supported relief efforts by carrying over 193,000 lbs. of essential cargo
The Company continues to focus on creating long-term value and positively impacting the people, environment and communities it serves. The Company will publish its fifth annual Corporate Kuleana Report in the spring of 2024.
Merger Agreement
On December 3, 2023 , Alaska Air Group, Inc. and the Company announced that they have entered into a definitive agreement under which Alaska Airlines will acquire Hawaiian for $18.00 per share in cash, for a transaction value of approximately $1.9 billion , inclusive of $0.9 billion of Hawaiian's net debt. The combined company will unlock more destinations for consumers and expand choice of critical air service options and access throughout the Pacific region, Continental United States and globally. The acquisition is conditioned on required regulatory approvals, approval by the Company's shareholders, and other customary closing conditions. It is expected to close in 12-18 months from the announcement date.
For full financial report, see: https://newsroom.hawaiianairlines.com/releases/hawaiian-holdings-reports-2023-fourth-quarter-and-full-year-financial-results
IndiGo (BSE:539448)
Interglobe Aviation Limited is publicly traded under BSE:539448 and NSE: INDIGO.
About Us
IndiGo is India's largest passenger airline with a market share of 55.5% as of October 2020. We primarily operate in India's domestic air travel market as a low-cost carrier with focus on our three pillars - offering low fares, being on-time and delivering a courteous and hassle-free experience. IndiGo has become synonymous with being on-time.
Since our inception in August 2006, we have grown from a carrier with one plane to a fleet of 284 aircraft today. A uniform fleet for each type of operation, high operational reliability and an award-winning service make us one of the most reliable airlines in the world. Indigo has a total destination count of 87 with 63 domestic destinations and 24 International. This includes two destinations: Aizawl and Agra in India which are open for sale. Fourteen codeshare destinations beyond Istanbul on Turkish Airlines are also open for sale. They include, Athens (ATH), Budapest (BUD), Brussels (BRU), Tel Aviv (TLV), Malta (MLA), Paris (CDG), Dublin (DUB), Copenhagen (CPH), Prague (PRG), Vienna (VIE), Zurich (ZRH), Amsterdam (AMS), London Gatwick (LGW) and London Heathrow (LHR).
The Preferred Airline
IndiGo is not only the most efficient low fare operator domestically but is also comparable with global low-cost airlines. We are constantly enhancing our engagement with our passengers to augment their travel experience. From multichannel direct sales (including online flight booking, call centres and airport counters), to online flight status checking, an exclusive IndiGo app for Android, we have transformed air travel in India. Today, we are India's most preferred airline. At IndiGo, low fares come with high quality.
Great Place to Work
Being courteous and hassle free starts with being a hassle-free place to work. A highly engaged and motivated workforce leads to higher levels of customer service. Our state-of-the-art 'ifly' facility is designed to deliver a real-time training experience to all our new recruits. This training facility is considered to be one the best aviation training facilities in India. With our people-friendly culture at the heart of all we do, we continuously help the company staff find work-life balance. Ten years in a row, IndiGo continues to be amongst the best organizations to work for in India and has been named Aon's Best Employer, 2017
IndiGoReach
Our Corporate Social Responsibility (CSR) initiative IndiGoReach focuses on three broad themes: Children and Education, Women Empowerment and Environment. We work towards upliftment of communities not just around us but also far-flung areas in the country. After all, India's holistic progress is rooted in the collective aspirations of its people.
Facts and Figures
- 10 consecutive years of Profitable operations
- Market share of 55.5% as of October 2020.
- Fleet of 284 aircraft including 120 new generation A320 NEOs, 112 A320 CEOs, 25 ATRs and 27 A321 NEO.
- Recognized as 'Great Place to Work for in India' for 8 years in a row (2008- 2015)
- Named as Aon's Best Employer for the year 2016 and 2017
https://www.goindigo.in/about-us.html?linkNav=about-us_footer
3 February 2023
For the quarter ending December 2022, IndiGo reported a profit of INR 20,091 million excluding foreign exchange loss. Including foreign exchange loss of INR 5,865 million, net profit for the quarter aggregated to INR 14,226 million.
Gurgaon, February 3, 2023: InterGlobe Aviation Ltd. ("IndiGo") today reported its third quarter fiscal year 2023 results
For the quarter ended December 31, 2022, compared to the same period last year:
- Capacity increased by 25.3%
- Passenger numbers increased by 25.8% to 22.3 million
- Yield improved by 21.9% to INR 5.38 and load factor improved by 5.4 points to 85.1%
- Revenue from Operations increased by 60.7% to INR 149,330 million
- Fuel prices increased by 52.4% leading to increase in fuel CASK by 41.2%
- CASK ex fuel increased by 6.0% to INR 2.76 due to increase in foreign exchange losses
- EBITDAR of INR 33,990 million (22.8% EBITDAR margin), compared to EBITDAR of INR 19,955 million (21.5% EBITDAR margin)
- Profit excluding foreign exchange of INR 20,091 million compared to INR 1,252 million.
- Net profit of INR 14,226 million, compared to net profit of INR 1,298 million
Profitability Metrics
|
Particulars (INR mn) |
Quarter ended |
Quarter ended |
||||
|
Dec'22 |
Dec'21 |
Change |
Dec'22 |
Sep'22 |
Change |
|
|
EBITDAR |
33,990 |
19,955 |
+70.3% |
33,990 |
2,292 |
+1,382.8% |
|
PBT |
14,233 |
1,337 |
+964.8% |
14,233 |
(15,833) |
+189.9% |
|
PAT |
14,226 |
1,298 |
+996.1% |
14,226 |
(15,833) |
+189.8% |
|
Profit excluding foreign exchange |
20,091 |
1,252 |
+1,504.9% |
20,091 |
(3,818) |
+626.2% |
Operational Metrics
|
Particulars |
Quarter ended |
Quarter ended |
||||
|
Dec'22 |
Dec'21 |
Change |
Dec'22 |
Sep'22 |
Change |
|
|
ASK (billion) |
28.8 |
23.0 |
+25.3% |
28.8 |
27.7 |
+4.0% |
|
RPK (billion) |
24.5 |
18.3 |
+33.8% |
24.5 |
21.9 |
+11.8% |
|
Load Factor |
85.1% |
79.7% |
+5.4 pts |
85.1% |
79.2% |
+5.9 pts |
|
Passengers (million) |
22.3 |
17.8 |
+25.8% |
22.3 |
19.7 |
+13.1% |
The Company's CEO, Mr. Pieter Elbers said,
"Third quarter performance was strong both operationally and financially in the backdrop of robust demand for air travel. The wide range of initiatives that were set in motion across the organization have started to yield results. I am proud to report the highest ever quarterly revenue of 154.1 billion rupees and robust profit of 14.2 billion rupees for the third quarter of fiscal year 2023. We are thankful to our customers and all IndiGo employees who enabled us to achieve this performance. With a modern fleet of over 300 aircraft, we continue to serve the market with further capacity growth planned across domestic and international sectors."
Revenue and Cost Comparisons
Total income for the quarter ended December 2022 was INR 154,102 million, an increase of 62.6% over the same period last year. For the quarter, our passenger ticket revenues were INR 131,624 million, an increase of 63.0% and ancillary revenues were INR 14,222 million, an increase of 24.6% compared to the same period last year.
|
Particulars (INR mn) |
Quarter ended |
Quarter ended |
||||
|
Dec '22 |
Dec '21 |
Change |
Dec '22 |
Sep '22 |
Change |
|
|
Revenue from operations |
149,330 |
92,948 |
+60.7% |
149,330 |
124,976 |
+19.5% |
|
Other income |
4,772 |
1,853 |
+157.5% |
4,772 |
3,547 |
+34.5% |
|
Total income |
154,102 |
94,801 |
+62.6% |
154,102 |
128,523 |
+19.9% |
|
RASK* (INR) |
5.26 |
4.09 |
+28.9% |
5.26 |
4.57 |
+15.1% |
|
Yield (INR/Km) |
5.38 |
4.41 |
+21.9% |
5.38 |
5.07 |
+6.0% |
Total expenses for the quarter ended December 2022 were INR 139,869 million, an increase of 49.6% over the same quarter last year.
|
Particulars (INR mn) |
Quarter ended |
Quarter ended |
||||
|
Dec '22 |
Dec '21 |
Change |
Dec '22 |
Sep '22 |
Change |
|
|
Fuel cost |
57,851 |
32,693 |
+77.0% |
57,851 |
62,579 |
-7.6% |
|
Other costs excluding fuel |
82,018 |
60,771 |
+35.0% |
82,018 |
81,777 |
+0.3% |
|
Total cost |
139,869 |
93,464 |
+49.6% |
139,869 |
144,356 |
-3.1% |
|
CASK* (INR) |
4.77 |
4.03 |
+18.4% |
4.77 |
5.15 |
-7.3% |
|
CASK ex fuel* (INR) |
2.76 |
2.60 |
+6.0% |
2.76 |
2.88 |
-4.3% |
|
CASK ex fuel ex forex* (INR) |
2.55 |
2.61 |
-1.9% |
2.55 |
2.45 |
+4.3% |
Cash and Debt
As of 31st December 2022
- IndiGo had a total cash balance of INR 219,247 million comprising INR 106,125 million of free cash and INR 113,121 million of restricted cash.
- The capitalized operating lease liability was INR 410,420 million. The total debt (including the capitalized operating lease liability) was INR 444,752 million.
Network and Fleet
- As of 31st December 2022, fleet of 302 aircraft including 23 A320 CEOs, 160 A320 NEOs, 78 A321 NEOs, 39 ATRs and 2 A321 freighter; a net increase of 22 passenger and 1 freighter aircraft during the quarter.
- IndiGo operated at a peak of 1,685 daily flights during the quarter including non-scheduled flights
- IndiGo provided scheduled services to 75 domestic destinations and 22 international destinations during the quarter.
Operational Performance
For the period October - December'22
- IndiGo had a Technical Dispatch Reliability of 99.92%
- IndiGo had an on-time performance of 89.5% at four key metros and flight cancellation rate of 0.54%.
Future Capacity Growth
- Fourth quarter of fiscal year 2023 capacity in terms of ASKs is expected to increase by around 45% as compared to the fourth quarter of fiscal year 2022
Awards and Accolades
- IndiGo was ranked 5th most punctual mega airline in the world for 2022 by the Official Aviation Guide ('OAG')"
- IndiGo was awarded with the 'World's youngest aircraft fleet 2023' in 100+ aircraft category by Ch- Aviation
- IndiGo won Seven Awards at the "Chief Learning Officer (CLO) Awards 2022" India organized by Tata Institute of Social Sciences.
- IndiGoReach (IndiGo' CSR arm) won
- The best CSR Award for Women Empowerment at the 20th FICCI Corporate Social Responsibility (CSR) Awards.
- The best CSR Award in "an Aspirational District/Difficult terrain for their work in the North- eastern region" by Tata Institute of Social Sciences, Guwahati.
- IndiGo and Genesis BCW won Gold for their campaign "Making a 6E Recovery" by Campaign India.
For full financial report, see: https://www.goindigo.in/content/dam/goindigo/investor-relations/Financial%20Results/2022-23/q3-oct-to-dec-2022/Unauditd_Financials_Results.pdf
International Airlines Group (LSE: IAG)
IAG Overview
International Airlines Group (IAG) is one of the world's largest airline groups with 598 aircraft flying to 279 destinations and carrying around 118 million passengers each year. It is a Spanish registered company with shares traded on the London Stock Exchange and Spanish Stock Exchanges.
How we're organized
IAG is the parent company of the Group, exerting vertical and horizontal influence over its portfolio of companies. IAG is supported by its Management Committee which is made up of CEOs from across the operating companies and IAG senior management. The portfolio sits on a common integrated platform driving efficiency and simplicity while allowing each operating company to achieve its individual performance targets and maintain its unique identity.
https://www.iairgroup.com/en/the-group/iag-overview
What We Do
IAG combines leading airlines in Ireland, the UK and Spain, enabling them to enhance their presence in the aviation market while retaining their individual brand's operations.
The airlines each target different customer markets and geographies, providing choice across the full spectrum of customer needs and travel occasions.
The airlines' customers benefit from a larger combined network for both passengers and cargo and greater ability to invest in new products and services through improved financial robustness.
https://www.iairgroup.com/en/the-group/what-we-do
5 November 2021
NINE MONTHS RESULTS ANNOUNCEMENT
International Consolidated Airlines Group (IAG) today (November 5, 2021) presents Group consolidated results for the nine months to September 30, 2021.
COVID-19 situation and management actions:
- Passenger capacity in quarter 3 was 43.4 per cent of 2019, up from 21.9 per cent in quarter 2, as capacity rebuilds
- Current passenger capacity plans for quarter 4 are for around 60 per cent of 2019 capacity
- Cargo carried in quarter 3 was up 37.2 per cent on 2020, reaching 73.4 per cent of 2019 levels, despite a reduction in cargo-only flights as passenger capacity increased, with 657 cargo-only flights operated in the quarter compared with 1,371 in quarter 2
- Cash operating costs for quarter 3 of €260 million per week
- Strong liquidity of €10.6 billion at the end of quarter 3, up from €8.1 billion at December 31, 2020, comprised of
- cash of €7.6 billion and committed and undrawn general and aircraft facilities of €3.0 billion:
- Both cash and underlying debt stable since quarter 2, with the €0.2 billion increase in borrowings driven by
- translation of US dollar debt
- Increased liquidity driven by positive operating cash flow in quarter 3 and successful conclusion of financing initiatives since the start of the year, together with cost actions and UK pension contribution deferral
- In July sustainability-linked EETC financing of $785 million concluded for seven British Airways' fleet
- deliveries for 2021 and 2022, with total financing remaining to be drawn of $685 million
- Additional £1.0 billion (€1.2 billion) committed five-year credit facility executed for British Airways on November 1, 2021, partially guaranteed by UK Export Finance, which remains undrawn, resulting in total pro forma liquidity at the end of October of €12.1 billion, including an increase in cash to €8.0 billion
IAG period highlights on results:
- Reported operating loss for the third quarter €452 million (2020 restated1: operating loss €1,923 million) and operating loss before exceptional items €485 million (2020 restated1: operating loss before exceptional items
- €1,305 million)
- Reported operating loss for the nine months €2,487 million (2020 restated1: operating loss €5,975 million), and operating loss before exceptional items €2,665 million (2020 restated1: operating loss before exceptional items
- €3,220 million)
- Exceptional credit before tax in the nine months of €178 million on discontinuance of fuel and foreign exchange hedge accounting and the reversal of the impairment of certain fleet assets (2020: exceptional charge before tax of €2,755 million on discontinuance of fuel and foreign exchange hedge accounting and impairment of fleet assets)
- Loss after tax and exceptional items for the nine months €2,622 million (2020 restated1: loss €5,576 million) and
- loss after tax before exceptional items: €2,775 million (2020 restated1: loss €3,185 million)
Performance summary:
|
Nine months to September 30 |
|||
|
Reported results (€ million) |
2021 |
2020 restated1 |
Higher / (lower) |
|
Passenger revenue |
3,140 |
4,828 |
(35.0) % |
|
Total revenue |
4,921 |
6,505 |
(24.4) % |
|
Operating loss |
(2,487) |
(5,975) |
(58.4) % |
|
Loss after tax |
(2,622) |
(5,576) |
(53.0) % |
|
Basic loss per share (€ cents)2 |
(52.8) |
(182.4) |
(71.0) % |
|
Cash and interest-bearing deposits3 |
7,619 |
5,917 |
28.8 % |
|
Borrowings3 |
19,975 |
15,679 |
27.4 % |
|
Alternative performance measures (€ million) |
2021 |
2020 restated1 |
Higher / (lower) |
|
Passenger revenue before exceptional items |
3,135 |
4,888 |
(35.9) % |
|
Total revenue before exceptional items |
4,916 |
6,565 |
(25.1) % |
|
Operating loss before exceptional items |
(2,665) |
(3,220) |
(17.2) % |
|
Loss after tax before exceptional items |
(2,775) |
(3,185) |
(12.9) % |
|
Adjusted loss per share (€ cents)2 |
(55.9) |
(104.2) |
(46.3) % |
|
Net debt3 |
12,356 |
9,762 |
26.6 % |
|
Available seat kilometres (ASK million) |
74,123 |
91,394 |
(18.9) % |
|
Passenger revenue per ASK (€ cents) |
4.23 |
5.35 |
(20.9) % |
|
Non-fuel costs per ASK (€ cents) |
8.61 |
8.86 |
(2.9) % |
"I would like to thank our people, who have played such a central role in all that we have achieved in the face of the most challenging time for the industry.
"There's a significant recovery underway and our teams across the Group are working hard to capture every opportunity. We continue to capitalise on surges in bookings when travel restrictions are lifted.
"All our airlines have shown improvements with the Group's operating loss more than halved compared to previous quarters. In Q3, our operating cash flow was positive for the first time since the start of the pandemic and our liquidity is higher than ever, reaching €12.1 billion on a pro forma basis at the end of October.
"The full reopening of the transatlantic travel corridor from Monday is a pivotal moment for our industry. British Airways is serving more US destinations than any transatlantic carrier and we're delighted that we can get our customers flying again.
"Longhaul traffic has been a significant driver of revenue, with bookings recovering faster than shorthaul as we head into the winter. Premium leisure is performing strongly at both Iberia and British Airways and there are early signs of a recovery in business travel.
"Iberia and Vueling continued to be the best performers within the Group in the third quarter. Iberia returned to profitability while Vueling reached breakeven at the operating level. Both seized opportunities to strengthen their positions on routes to Latin America and the Spanish domestic market.
"In the short term, we are focused on getting ready to operate as much capacity as we can and ensuring IAG is set up to return to profitability in 2022. Our teams are creating opportunities and implementing initiatives to transform our business and preparing it for the future so that we emerge more competitive. This includes initiatives such as our new shorthaul operation at Gatwick, Vueling's expansion at Paris-Orly, Aer Lingus' services from Manchester to the US and the Caribbean and our new maintenance model in Barcelona.
"We also remain resolute in our climate commitments. We're transforming our business and driving change to create a truly sustainable airline industry. IAG has led the way by being the first airline group worldwide to commit to achieving net zero carbon emissions by 2050 and we welcome IATA's recent announcement that the industry will join us in meeting this goal."
Trading outlook
At current fuel prices and exchange rates, IAG expects its 2021 operating loss before exceptional items to be approximately €3.0 billion. Quarter 4 capacity, measured in ASKs, is expected to be approximately 60% of 2019, resulting in 2021 capacity of 37% of the 2019 level.
CONSOLIDATED INCOME STATEMENT
|
Nine months to September 30 |
Three months to September 30 |
||||||
|
€ million |
2021 |
20201 |
Higher/ (lower) |
2021 |
20201 |
Higher/ (lower) |
|
|
Passenger revenue |
3,140 |
4,828 |
(35.0) % |
1,999 |
715 |
nm |
|
|
Cargo revenue |
1,174 |
917 |
28.0 % |
405 |
302 |
34.1 % |
|
|
Other revenue |
607 |
760 |
(20.1) % |
305 |
200 |
52.5 % |
|
|
Total revenue |
4,921 |
6,505 |
(24.4) % |
2,709 |
1,217 |
nm |
|
|
Employee costs |
2,099 |
2,887 |
(27.3) % |
811 |
982 |
(17.4) % |
|
|
Fuel, oil costs and emissions charges |
1,049 |
3,282 |
(68.0) % |
552 |
700 |
(21.1) % |
|
|
Handling, catering and other operating costs |
788 |
1,080 |
(27.0) % |
421 |
227 |
85.5 % |
|
|
Landing fees and en-route charges |
598 |
737 |
(18.9) % |
311 |
198 |
57.1 % |
|
|
Engineering and other aircraft costs |
702 |
1,135 |
(38.1) % |
283 |
292 |
(3.1) % |
|
|
Property, IT and other costs |
540 |
597 |
(9.5) % |
187 |
169 |
10.7 % |
|
|
Selling costs |
280 |
340 |
(17.6) % |
121 |
72 |
68.1 % |
|
|
Depreciation, amortisation and impairment |
1,384 |
2,335 |
(40.7) % |
464 |
490 |
(5.3) % |
|
|
Currency differences |
(32) |
87 |
nm |
11 |
10 |
10.0 % |
|
|
Total expenditure on operations |
7,408 |
12,480 |
(40.6) % |
3,161 |
3,140 |
0.7 % |
|
|
Operating loss |
(2,487) |
(5,975) |
(58.4) % |
(452) |
(1,923) |
(76.5) % |
|
|
Finance costs |
(608) |
(503) |
20.9 % |
(245) |
(161) |
52.2 % |
|
|
Finance income |
5 |
27 |
(81.5) % |
1 |
4 |
(75.0) % |
|
|
Net financing credit relating to pensions |
2 |
11 |
(81.8) % |
1 |
2 |
(50.0) % |
|
|
Net currency retranslation (charges)/credits |
(63) |
183 |
nm |
(50) |
86 |
nm |
|
|
Other non-operating credits/(charges) |
101 |
43 |
nm |
31 |
(7) |
nm |
|
|
Total net non-operating costs |
(563) |
(239) |
nm |
(262) |
(76) |
nm |
|
|
Loss before tax |
(3,050) |
(6,214) |
(50.9) % |
(714) |
(1,999) |
(64.3) % |
|
|
Tax |
428 |
638 |
(32.9) % |
140 |
236 |
(40.7) % |
|
|
Loss after tax for the period |
(2,622) |
(5,576) |
(53.0) % |
(574) |
(1,763) |
(67.4) % |
|
ALTERNATIVE PERFORMANCE MEASURES
All figures in the tables below are before exceptional items.
|
Nine months to September 30 |
Three months to September 30 |
|||||
|
Before exceptional items |
Before exceptional items |
|||||
|
€ million |
2021 |
20201 |
Higher/ (lower)2 |
2021 |
20201 |
Higher/ (lower)2 |
|
Passenger revenue |
3,135 |
4,888 |
(35.9) % |
1,999 |
737 |
nm |
|
Cargo revenue |
1,174 |
917 |
28.0 % |
405 |
302 |
34.1 % |
|
Other revenue |
607 |
760 |
(20.1) % |
305 |
200 |
52.5 % |
|
Total revenue before exceptional items |
4,916 |
6,565 |
(25.1) % |
2,709 |
1,239 |
nm |
|
Employee costs |
2,099 |
2,618 |
(19.8) % |
811 |
713 |
13.7 % |
|
Fuel, oil costs and emissions charges |
1,202 |
1,683 |
(28.6) % |
565 |
370 |
52.7 % |
|
Handling, catering and other operating costs |
788 |
1,080 |
(27.0) % |
421 |
227 |
85.5 % |
|
Landing fees and en-route charges |
598 |
737 |
(18.9) % |
311 |
198 |
57.1 % |
|
Engineering and other aircraft costs |
709 |
1,052 |
(32.6) % |
290 |
286 |
1.4 % |
|
Property, IT and other costs |
540 |
569 |
(5.1) % |
187 |
163 |
14.7 % |
|
Selling costs |
280 |
340 |
(17.6) % |
121 |
72 |
68.1 % |
|
Depreciation, amortisation and impairment |
1,397 |
1,619 |
(13.7) % |
477 |
505 |
(5.5) % |
|
Currency differences |
(32) |
87 |
nm |
11 |
10 |
10.0 % |
|
Total expenditure on operations before exceptional items |
7,581 |
9,785 |
(22.5) % |
3,194 |
2,544 |
25.6 % |
|
Operating loss before exceptional items |
(2,665) |
(3,220) |
(17.2) % |
(485) |
(1,305) |
(62.8) % |
|
Finance costs |
(608) |
(503) |
20.9 % |
(245) |
(161) |
52.2 % |
|
Finance income |
5 |
27 |
(81.5) % |
1 |
4 |
(75.0) % |
|
Net financing credit relating to pensions |
2 |
11 |
(81.8) % |
1 |
2 |
(50.0) % |
|
Net currency retranslation (charges)/credits |
(63) |
183 |
nm |
(50) |
86 |
nm |
|
Other non-operating credits/(charges) |
101 |
43 |
nm |
31 |
(7) |
nm |
|
Total net non-operating costs |
(563) |
(239) |
nm |
(262) |
(76) |
nm |
|
Loss before tax before exceptional items |
(3,228) |
(3,459) |
(6.7) % |
(747) |
(1,381) |
(45.9) % |
|
Tax |
453 |
274 |
65.3 % |
141 |
168 |
(16.1) % |
|
Loss after tax for the period before exceptional items |
(2,775) |
(3,185) |
(12.9) % |
(606) |
(1,213) |
(50.0) % |
|
Operating figures |
2021 2 |
20201,2 |
Higher/ (lower) |
2021 2 |
20201,2 |
Higher/ (lower) |
|
Available seat kilometres (ASK million) |
74,123 |
91,394 |
(18.9) % |
40,082 |
19,769 |
nm |
|
Revenue passenger kilometres (RPK million) |
44,464 |
62,445 |
(28.8) % |
27,716 |
9,673 |
nm |
|
Seat factor (per cent) |
60.0 |
68.3 |
(8.3) pts |
69.1 |
48.9 |
20.2pts |
|
Passenger numbers (thousands) |
23,555 |
26,977 |
(12.7) % |
15,475 |
6,592 |
nm |
|
Cargo tonne kilometres (CTK million) |
2,841 |
2,471 |
15.0 % |
988 |
720 |
37.2 % |
|
Sold cargo tonnes (thousands) |
382 |
326 |
17.2 % |
134 |
94 |
42.6 % |
|
Sectors |
192,833 |
219,553 |
(12.2) % |
114,877 |
64,288 |
78.7 % |
|
Block hours (hours) |
563,716 |
678,196 |
(16.9) % |
303,622 |
185,681 |
63.5 % |
|
Average manpower equivalent3 |
50,601 |
61,639 |
(17.9) % |
50,202 |
58,905 |
(14.8) % |
|
Aircraft in service |
533 |
542 |
(1.7) % |
n/a |
n/a |
- |
|
Passenger revenue per RPK (€ cents) |
7.05 |
7.83 |
(9.9) % |
7.21 |
7.62 |
(5.3) % |
|
Passenger revenue per ASK (€ cents) |
4.23 |
5.35 |
(20.9) % |
4.99 |
3.73 |
33.8 % |
|
Cargo revenue per CTK (€ cents) |
41.32 |
37.11 |
11.4 % |
40.99 |
41.94 |
(2.3) % |
|
Fuel cost per ASK (€ cents) |
1.62 |
1.84 |
(11.9) % |
1.41 |
1.87 |
(24.7) % |
|
Non-fuel costs per ASK (€ cents) |
8.61 |
8.86 |
(2.9) % |
6.56 |
11.00 |
(40.4) % |
|
Total cost per ASK (€ cents) |
10.23 |
10.71 |
(4.5) % |
7.97 |
12.87 |
(38.1) % |
FINANCIAL REVIEW
COVID-19 Summary - Nine months to September 30, 2021
The Group's results continue to be impacted by COVID-19 and the related restrictions on travel. A detailed review of the impact of COVID-19 on the Group in 2020 was provided in the 2020 Annual Report and Accounts and this review provides an update for the first nine months of 2021.
In the first half of 2021, due to the continuing impact of the virus worldwide and the associated travel and border restrictions applying in many countries, the Group was only able to operate a limited passenger schedule, with capacity operated only 20.8 per cent of that operated in 2019. Passenger capacity for quarter 2 was 21.9 per cent of 2019, up marginally on the 19.6 per cent operated in quarter 1, with an increase in capacity during the quarter where travel restrictions allowed. Capacity was increased to 43.4 per cent of 2019 in quarter 3, linked to a partial easing of restrictions. The Group operated 3,334 additional cargo-only flights, leading to record cargo revenue for the nine months.
The Group seeks to reduce the impact of volatile commodity prices by hedging fuel purchases in advance, based on expected capacity levels. The Group also hedges foreign exchange rates. The impact of COVID-19 has led to a significant reduction in the requirement to purchase jet fuel, due to the significantly reduced flying programme. As a consequence, the Group has derivative contracts for which there was no corresponding purchase of jet fuel, leading to discontinuance of hedge accounting for these fuel derivatives, together with the related foreign exchange derivatives. In aggregate there is a net loss on these derivative contracts as, whilst the commodity fuel price has risen in recent months, the average fuel price over the period covered by these contracts was significantly below levels seen before COVID-19, when these derivative contracts were taken out. The exceptional credit in the nine months is mainly due to the reversal of prior year charges resulting from reduced losses (compared to previously forecast) on these contracts, due to rising fuel prices in 2021, net of an adjustment for the latest assessment of capacity for 2021 and foreign exchange movements.
In May 2021, the Board approved a revised fuel hedging policy, which is designed to provide flexibility to respond to both significant unexpected reductions in travel demand or capacity and/or material or sudden changes in jet fuel prices. The revised policy allows for differentiation within the Group, to match the nature of each operating company, and a greater use of call options. The revised policy will operate on a two-year rolling basis, with hedging up to 60 per cent of anticipated requirements in the first twelve months and up to 30 per cent in the following twelve months and with flexibility for low-cost airlines within the Group to adopt hedging up to 75 per cent in the first twelve months. For all Group airlines, hedging between 25 and 36 months ahead will only be undertaken in exceptional circumstances.
The Group continues to take action to preserve cash and boost liquidity. In the nine months the Group drew debt facilities agreed in 2020, namely a £2.0 billion Export Development Guarantee (EDG) term loan for British Airways from UK Export Finance and €75 million for Aer Lingus from the Ireland Strategic Investment Fund. IAG closed a dual-tranche senior unsecured bond issuance in March, raising €1.2 billion, with €500 million maturing in 2025 and €700 million maturing in 2029. In May, IAG raised €825 million by issuing a convertible bond, maturing in 2028. During the nine months the Group also signed a committed secured Revolving Credit Facility (RCF) with a syndicate of banks for $1.755 billion, available for three years, plus two consecutive one-year extension periods, at the discretion of the lenders. The facility is available to Aer Lingus, British Airways and Iberia, each of whom has a separate borrower limit within the overall facility. Any drawings under the facility would be secured against eligible unencumbered aircraft assets and take-off and landing rights at both London Heathrow and London Gatwick airports. The facility remained undrawn at the end of September. Simultaneous with entering into this new RCF, British Airways cancelled its US dollar revolving credit facility that was due to expire in June 2021 and which had $786 million undrawn and available at December 31, 2020. Approximately €400 million of aircraft financing facilities expired undrawn by the end of March. In July funding of $785 million was secured for British Airways through a sustainability-linked Enhanced Equipment Trust Certificate (EETC) financing, to be drawn down against future aircraft deliveries; at September 30, 2021 $685 million remained undrawn. Total liquidity at the end of the nine months remained strong at €10.6 billion, including cash, cash equivalents and current interest-bearing deposits of €7.6 billion and committed and undrawn general and aircraft facilities of €3.0 billion. On November 1, 2021, the Group closed a £1 billion committed credit facility for British Airways, partially guaranteed by UK Export Finance, which remains undrawn.
The Group expects that it will take until at least 2023 for passenger demand to reach the levels of 2019. As a result, the Group is actively involved in restructuring its cost base to adjust to significantly lower levels of demand, including actions to reduce fixed costs and to increase the variable proportion of the cost structure.
Basis of preparation
Based on the extensive modelling the Group has undertaken in light of the COVID-19 pandemic, including considering plausible but severe downside scenarios, the Directors have a reasonable expectation that the Group has sufficient liquidity for the going concern assessment period to June 30, 2023 and accordingly the Directors have adopted the going concern basis in preparing the consolidated results for the nine months to September 30, 2021.
However, there are a number of significant factors related to the status and impact of COVID-19 worldwide that are outside of the control of the Group. These include the emergence of new variants of the virus and potential resurgence of existing strains of the virus; the availability of vaccines worldwide, together with the speed at which they are deployed; the efficacy of those vaccines; and the restrictions imposed by national governments in respect of the freedom of movement and travel. Due to the uncertainty that these factors create, the Directors are not able to provide certainty that there could not be more severe downside scenarios than those that have been considered in the modelling, including the sensitivities the Group has considered in relation to factors such as the impact on yield, capacity operated, cost mitigations achieved and the availability of aircraft financing to offset capital expenditure. In the event that such a scenario were to occur, the Group would need to implement additional mitigation measures and would likely need to secure additional funding over and above that which is contractually committed at November 4, 2021.
The Group has been successful in raising liquidity in the nine months to September 30, 2021, having financed all aircraft deliveries in the period, secured an additional €4.4 billion of non-aircraft debt, secured a new $1.755 billion Revolving Credit Facility, committed for three years and secured a $785 million aircraft-specific facility in the form of a sustainability- linked EETC financing structure. However, the Board cannot provide certainty that the Group will be able to secure additional funding, if required, in the event that a more severe downside scenario than those it has considered were to occur and accordingly this represents a material uncertainty that could cast doubt upon the Group's ability to continue as a going concern.
Principal risks and uncertainties
The Group has continued to maintain its framework and processes to identify, assess and manage risks. The Board continues to meet frequently and review updates, including risk related, from management.
The principal risks and uncertainties affecting the Group, detailed on pages 78 to 88 of the 2020 Annual Report and Accounts, remain relevant. The ongoing impacts of the COVID-19 pandemic (considered as an "Event causing significant network disruption" risk) continue to negatively impact the external risk environment for the Group and change the risk profile of a number of the Group's other principal risks. The Group continues to carefully review its principal risks, implement necessary mitigations to adapt and assess how the severity or likelihood of occurrence of certain risks has changed, which includes consideration of emerging risks related to competitive and market risk, talent and skills retention risk and the acceleration of the digital landscape and customer trends and sentiment to travel. Where further action has been required, the Board has assessed potential mitigations and, where appropriate or feasible, the Group has implemented or confirmed plans that would address those risks.
From the risks identified in the 2020 Annual Report and Accounts, the main risks that have been impacted by the COVID- 19 pandemic and ongoing recovery are highlighted below. Business responses implemented by management and that effectively mitigate or reduce the risk are reflected in the Group's latest business plan and scenarios.
- Airports, infrastructure and critical third parties. Restrictions at hubs and airports have required capacity adjustments, including fleet adjustments and new operating procedures as markets and regions re-open. The Group has pro-actively worked with suppliers across all categories to ensure that operations are maintained and the impact to their businesses understood, with mitigations implemented where necessary. Additional focus will be placed on key suppliers following the removal of governments' support schemes. Operational bottlenecks such as immigration resource at airports and the potential for Air Traffic Control (ATC) disruption next summer remain outside of the Group's control, although management continues to liaise with the relevant providers to identify potential solutions.
- Competition, consolidation and government regulation. The scale of governmental support and aviation specific state-aid measures and the potential impact to the competitive landscape is under continuous assessment.
- Data and cyber security. The Group has maintained its planned investment in cyber security. The heightened threat of ransomware attacks on critical infrastructure and services persists and the Group continues to focus its efforts on further mitigating cyber risks through a Group wide cyber programme.
- IT systems and IT infrastructure. The Group is reliant upon the resilience of its systems for key customer and business processes and is exposed to risks that relate to poor performance, obsolescence or failure of these systems. The Group is currently engaged in a number of initiatives to modernise its IT systems, whilst also delivering an ongoing efficiency programme and upgrading its digital capability, customer propositions and core IT infrastructure and network where required. Some of these initiatives have been delayed or impacted by actions the Group is taking to respond to the operational and health requirements of the COVID-19 pandemic.
- People, culture and employee relations. The Group is focussed on staff wellbeing and people morale and motivation, particularly as our people return to their offices and the Group businesses adapt and implement hybrid working models. Welfare support schemes are in place to support the Group's staff and initiatives to build trust and engagement continue across the Group's businesses. The Group has identified the skills and capabilities that are required to manage its transformation, which include enhancing its leadership capability and delivering on the Group's diversity and inclusion plans. Employee consultations linked to restructuring proposals have been undertaken as required.
- Political and economic environment. National governments continue to impose varying and complex travel and testing requirements, which will continue to impact Group operations and dampen demand as customers choose not to fly given the uncertainty around the application and cost of these. These changes are being actively monitored and near-term capacity plans are refreshed dynamically, according to the latest status. The economic impact of the pandemic, especially with the focus on potential future variants driving further uncertainty, is expected to be significant and the Group will continue to adjust its future capacity plans accordingly, retaining flexibility to adapt as required.
- Debt funding and financial risk. Financial markets have been volatile since the spread of the pandemic, although the Group has been able to secure new funding and facilities as needed. The Group has an established process to monitor financial and counterparty risk on an ongoing basis. The Group implemented a new fuel hedging policy during May 2021, providing greater flexibility over fuel hedging.
The Board and its sub committees have been appraised of regulatory, competitor and governmental responses on an ongoing basis.
Operating and market environment
Average commodity fuel prices for the nine months to September 30, 2021 were approximately 40 per cent higher than the equivalent period in 2020, with prices rising since the start of 2021, in contrast to the significant fall in March 2020 as COVID-19 took hold. The US dollar weakened approximately eight per cent against the euro and nine per cent against the pound sterling compared with 2020.
IAG's results are impacted by exchange rates used for the translation of British Airways' and IAG Loyalty's financial results from pound sterling to the Group's reporting currency of euro. For the nine months to September 30, 2021 the net impact of translation on the operating result before exceptional items was €15 million adverse.
From a transactional perspective, the Group's financial performance is impacted by fluctuations in exchange rates, primarily from the US dollar, euro and pound sterling. The Group normally generates a surplus in most currencies in which it does business, except for the US dollar, as capital expenditure, debt repayments and fuel purchases typically create a deficit. The Group hedges a portion of its transaction exposures. The net transaction impact on the operating result before exceptional items was favourable by €188 million for the period, reducing revenues by €114 million and reducing costs by €302 million.
The net impact of translation and transaction exchange on the operating result before exceptional items for the nine months was €173 million favourable.
Capacity
In the nine months to September 30, 2021, IAG capacity, measured in available seat kilometres (ASKs), was lower by 18.9 per cent versus 2020 and by 71.0 per cent versus 2019, with the impact of the ongoing COVID-19 pandemic felt across all regions. Q3 2021 saw the highest passenger numbers and load factors since the start of the pandemic, however capacity continues to be affected by the travel restrictions put in place by national governments in response to the COVID-19 pandemic and variants of the virus.
During quarter 1, British Airways capacity was adversely impacted by the UK-wide lockdown imposed at the beginning of January and associated international travel ban. Longhaul routes operated primarily for cargo purposes with daily flights to several US cities. Shorthaul operations were severely limited by restrictions, but regular operations connected the main cities and saw steady business travel demand. Iberia's longhaul operations were focussed on Latin America and the Caribbean (LACAR) and benefitted from Visiting Friends and Relatives (VFR) travel over the Christmas and New year period and in the lead up to Easter, although the EU restrictions introduced in response to the identification of the Brazil COVID-19 variant adversely impacted passenger numbers. Vueling operations were focussed on Domestic markets, connecting the Spanish peninsula with the Canary and Balearic Islands. Aer Lingus capacity continued to be driven by cargo needs, with flights operating regularly to New York, JFK, Chicago and Boston with very low passenger load factors. LEVEL longhaul operations out of Barcelona were very limited with only regular flights to Buenos Aires in quarter 1.
During quarter 2, British Airways capacity was impacted by the UK government's travel restrictions and the re-introduction of the traffic light travel system. The restricted nature of the 'green' list severely limited the recovery in capacity expected on the lifting of lockdown restrictions. Restrictions introduced by other governments on travellers from the UK in response to the delta COVID-19 variant also contributed to the low capacity. Iberia longhaul operations continued to focus on LACAR with routes to Colombia and Ecuador benefitting from VFR traffic. Shorthaul routes benefitted from high levels of transfer traffic in the quarter. Vueling operations in the quarter benefitted from the Spanish government lifting the state of alarm on May 9, 2021 and the associated restrictions on travel. Domestic routes connecting the Spanish peninsula with the Canary and Balearic Islands performed well. Aer Lingus capacity continued to be severely limited by the stringent restrictions put in place by the Irish government, with passenger load factors averaging only 20 per cent. Operations were driven by cargo needs, with flights operating regularly to New York, Chicago and Boston. LEVEL continued regular operations to Buenos Aires and towards the end of the quarter restarted flights to San Francisco.
During quarter 3, British Airways capacity was impacted by the UK traffic light travel system and the stringent testing requirements for travel. Longhaul routes to North America and Asia Pacific continued to be driven by cargo requirements with low passenger load factors. Leisure routes performed well in the quarter with high load factors on Caribbean routes as well as European destinations on the green and amber lists. Iberia longhaul operations continued to focus on LACAR with routes continuing to benefit from VFR traffic. Restrictions put in place by the Argentinian government limited operations, but this was offset by easing of restrictions in Brazil and Chile. Shorthaul routes benefitted from summer leisure traffic across the network. Vueling's capacity increased in the quarter and Domestic and European routes benefited from summer vacation travel. Domestic capacity recovered to above 2019 levels as routes connecting the peninsula to the Canary and Balearic Islands performed well. Aer Lingus expanded operations in quarter 3 following the Irish government's decision to ease travel restrictions for non-essential travel on July 19, 2021. Domestic capacity also increased following the transfer of a number of routes from Stobart Air following its liquidation. LEVEL restarted routes to New York and Mexico in the quarter, however overall capacity was impacted by strict restrictions put in place by the Argentinian government on routes operating to Buenos Aires.
Unit measures have been rendered much less meaningful than usual by the significant reduction in capacity operated but are included in the commentary below for completeness.
Revenue
Passenger revenue for the nine months to September 30, 2021 fell 35.0 per cent from the previous year; in 2020 the impact of COVID-19 was mainly limited to the period from March onwards. Passenger unit revenue (passenger revenue per ASK) for the nine months decreased 20.6 per cent at constant currency ('ccy'), due primarily to lower passenger seat factors, together with lower passenger yields (passenger revenue per revenue passenger kilometre), associated with the impact of COVID-19.
Cargo revenue for the nine months was 28.0 per cent higher versus 2020 and up 31.7 per cent at constant currency. The strong cargo revenue performance was due to additional cargo-driven flights; during the nine months 3,334 cargo-only flights were operated. Cargo revenue for the nine months was €1,174 million, up from €917 million in the previous year and total cargo carried, measured in cargo tonne kilometres (CTKs) was 15.0 per cent higher. Yields were higher versus last year reflecting the ongoing market supply and demand imbalance. During this pandemic, cargo revenue has had to cover the entire cost of operating cargo-only flights, without passenger revenue, on aircraft configured for passengers.
Other revenue fell by 20.1 per cent and by 15.7 per cent at ccy, mainly due to the impact of COVID-19 on the Group's non- airline businesses.
Costs
Employee costs for the nine months decreased by €519 million compared with 2020, mainly linked to the restructuring programmes implemented in 2020. The Group continued to receive assistance from temporary furlough and equivalent temporary cost reduction schemes, which in the nine months amounted to €481 million, compared with €414 million in the same period in 2020.
Fuel costs, including an exceptional credit related to overhedging of €153 million in 2021 and an exceptional charge of
€1,599 million related to overhedging in 2020, reduced by 68.0 per cent. Excluding the exceptional overhedging credit in the period and the overhedging charge in 2020, fuel costs reduced by 28.6 per cent.
Supplier costs decreased by 27.7 per cent, linked to volume-related savings due to the lower capacity operated, together with a reduction in non-essential expenditure and negotiated savings as a result of COVID-19.
Depreciation, amortisation and impairment costs, including an exceptional impairment credit of €13 million in 2021 and an exceptional impairment charge in 2020 of €716 million, decreased by 40.7 per cent on the previous year, linked to the reduction in the Group's fleet triggered by COVID-19 and the related impairment charge. Excluding the exceptional impairment credit in 2021 and exceptional impairment charge in 2020, Depreciation, amortisation and impairment costs decreased by 13.7 per cent. The in-service fleet, which includes those aircraft temporarily grounded due to COVID-19, reduced from 542 aircraft at September 2020 to 533 aircraft at September 2021.
Total non-fuel costs were down 30.9 per cent on the previous year and down 29.5 per cent at ccy. Excluding the impact of exceptional charges in 2020, mainly relating to fleet and related asset impairments, and exceptional credits related to the reversal of impairments in respect of four aircraft in 2021, non-fuel costs were down 21.3 per cent and down 19.7 per cent at ccy.
Operating loss
The Group's reported operating loss for the nine months to September 30, 2021 was €2,487 million (2020 restated: operating loss of €5,975 million). The operating loss excluding exceptional credits in 2021 and exceptional charges in 2020, which are outlined in the Reconciliation of Alternative Performance Measures, was €2,665 million for the nine months to September 30, 2021, compared with a restated operating loss of €3,220 million in 2020. In 2020 the impact of COVID-19 was experienced mainly from March onwards; by contrast all nine months of 2021 were significantly negatively affected by COVID-19 and the related travel restrictions.
Net non-operating costs, taxation and loss after tax
The tax credit on the result after exceptional items for the nine months to September 30, 2021 was €428 million (2020:
€638 million), and the effective tax rate was 14 per cent (2020: 10 per cent). The substantial majority of the Group's activities are taxed where the main operations are based, UK, Spain and Ireland, with corporation tax rates during 2021 of 19 per cent, 25 per cent and 12.5 per cent respectively, these result in an expected effective tax rate of 20 per cent. The difference between the actual effective tax rate of 14 per cent and the expected effective tax rate of 20 per cent is primarily due to certain current and prior period losses in Iberia and Vueling not being recognised and the effect of the rate change in the UK.
On March 3, 2021 the UK Chancellor announced that legislation would be introduced in the Finance Bill 2021 to set the main rate of corporation tax at 25 per cent from April 2023. On May 24, 2021 the increase in the rate of corporation tax in the UK was substantially enacted, which has led to the remeasurement of deferred tax balances at September 30, 2021 and will increase the Group's future current tax charge accordingly.
On October 8, 2021 the Irish government announced that it would increase the rate of corporation tax for certain multinational businesses to 15 per cent with effect from 2023. This expected tax rate change has not been reflected in these results because it has not yet been substantively enacted.
The loss after tax and exceptional items for the nine months was €2,622 million (2020 restated: loss after tax €5,576 million), driven by the impact of COVID-19 on the Group's operating results.
Cash and leverage
The Group's cash position (including cash, cash equivalents and current interest-bearing deposits) at September 30, 2021 of €7,619 million was €1,702 million higher than December 31, 2020, driven by the additional liquidity actions taken in the nine months. Net debt at the end of the period was €12,356 million compared with €9,762 million at December 31, 2020.
Other recent developments
On October 27, 2021 Iberia submitted remedies to the European Commission as part of the Commission's ongoing review of the proposed acquisition of Air Europa by Iberia.
On November 1, 2021, the Group closed a £1.0 billion committed, five-year, credit facility for British Airways. The facility is provided by a syndicate of relationship banks and is partially guaranteed by UK Export Finance. The facility is unsecured and remains undrawn.
For the full financial report, see: https://www.iairgroup.com/~/media/Files/I/IAG/documents/iag-q3-2021-financial-results-en.pdf
Japan Airlines (TSE:9201)
Established
The predecessor of our current company, Japan Airlines Co., Ltd. was founded on August 1, 1951 with 100 million yen in capital and began scheduled air transportation on domestic routes independently from October of the following year.
Based on the Japan Airlines Act (Act No. 154 of 1953), as of October 1, 1953, the current company was established with 1 billion yen in government funding and 1 billion yen in sales, for a total of 2 billion yen in capital.
In this way, the established company inherited all of the rights and obligations of the previous company and became licensed to become the nation's only scheduled international air carrier, along with its domestic routes.
1 August 2022
JAL Group Announces Consolidated Financial Results for First Quarter Ending March 31, 2023
The JAL Group today announced the consolidated financial results for First Quarter Ending March,
Period April 1, 2022-June 30,2022.
1. JAL Group Consolidated results
Passenger demand that had decreased significantly by the COVID infection was on a recovery trend again in this first quarter due to the advancement of vaccination and adjustment to a post-COVID lifestyle. International passenger demand has been gradually recovering as worldwide border restrictions eased and business travels from Japan restarted. Domestic passenger demand has been steadily recovering especially from the Tokyo metropolitan area as the state of emergency declaration and similar preventive measures were fully lifted. For cargo business, despite the Russia-Ukraine situation, disrupted ocean shipments led to strong demand for air cargo and further price increase, which resulted in our cargo business to remain very strong. During this period, fuel prices rose and the yen depreciated significantly.
In the above business environment, the revenue for the first quarter were increased by 102.1% year on year to 268.8 billion yen, the operating expenses increased by 40.7% year on year to 303.0 billion yen, the loss/earning before financing and income tax (hereinafter referred as "EBIT") was loss of 27.5 billion yen (EBIT loss of 82.6 billion yen in the previous year). The loss attributable to owners of the parent was 19.5 billion yen (the loss attributable to owners of the parent 57.9 billion yen in the previous year). Fuel expenses for the period totaled 69.8 billion yen, increased by 162.6% from the same period last year, and actual fixed costs amounted to 120.7 billion yen.
International passenger revenue for Full-Service Carriers was 62.4billion yen (increased by 457.0% year on year), domestic passenger revenue was 88.0 billion yen (increased by 131.4% year on year), and cargo mail revenue was 65.3 billion yen (increased by 37.1% year on year).
Details of the consolidated financial results are as follows (Including LCC)
2. Summary of Consolidated Statement of Financial Position and Cash Flow
- Equity ratio is 39.2% for credit evaluation basis, Net D/E ratio is x0.2, keeping a healthy level.
- Liquidity at hand was maintained at a sufficient amount of 530.3 billion yen at the end of June, as
- well as the unused credit line of 250.0 billion yen, which has been reduced because of the improvement of cash inflow.
- As a result of a recovery trend in passenger demand, Operating cash flow is 78.7 billion yen of inflow and Free cash flow is 46.3 billion yen of inflow.
3. First Quarter and recent initiatives
【ESG strategy】
- In June, our ESG initiatives and its disclosure were highly evaluated and thus JAL was selected as a constituent of two leading investment indices, "the FTSE Blossom Japan Index" and "the FTSE Blossom Japan Sector Relative Index".
【Full-Service Carrier business domain】
-On international routes, due to the easing of entry restrictions to Japan and other
factors, gradual recovery of passenger demand to/from Japan. In addition, JAL steadily captured transit passenger demand travelling between Asia and North America.
-For domestic routes, we conducted promotional campaigns with local governments and railroad companies to stimulate Tokyo-inbound demand. Also, JAL has almost completed upgrading the main large-size fleets to A350s which enabled us to provide enough capacity to meet the recovering demand in a timely manner. Due to this, JAL were able to effectively
capture the strong demand during the long-holiday season in May.
【LCC business domain】
- Our mid- and long-haul international low-cost carrier, ZIPAIR Tokyo (ZIPAIR), has been gradually recognized by leisure customers and some flights were fully booked during the peak season. Spring Japan that had become our subsidiary since June 2021, Jetstar Japan started to fly cutting-edge, fuel-efficient A321LR aircraft from July, the three low-cost carriers will continue to provide their customers with useful services and expand their business.
【Non-aviation business domain】
- JAL launched a new partnership program with one of the largest point service providers in Japan, Rakuten Point, which provided the JAL Groups'customers with much more occasions to earn and redeem JAL mileage.
- For JALUX that became our subsidiary last fiscal year, JAL and JALUX mutually used their respective know-how and resources to conduct joint sales of flight simulator experience as
well as the development of new products.
4.Future Outlook
There is no change to our current full-year forecast of this fiscal year ending March 2023 that was disclosed on May 6, 2022. As the society shifts toward a balance of social economic activities and COVID prevention, both international and domestic passenger demand have been steadily recovering. There still exists various uncertain external environments including the Russia-Ukraine situation or price hike of raw materials including fuel. However, we will strive all together to achieve our performance target of 80 billion yen in EBIT.
5. Dividends
Although our performance and cash flow have been steadily improving, our first quarter EBIT results was a loss of 27.5 billion yen. Thus, there is need to carefully monitor further performance. Therefore, we regret that we cannot pay the interim dividends to shareholders, but we would like to ask for their understanding in this situation. For the year-end dividends for the fiscal year ending March 2023, while we must keep a close eye on the geopolitical risk or the fuel price hike risk, we will aim for achieving our profit target and dividends payment for the fiscal year ending March 2023, unless there occur significant negative events. We will update our forecast immediately when our performance becomes foreseeable.
https://press.jal.co.jp/en/release/202208/006838.html
KLM (EPA:AF)
KLM's Company Profile
KLM was established on 7 October 1919, making it the world's oldest airline still operating under its original name. Operating out of its home base in Amsterdam, the KLM Group served its global network with a fleet of 214 aircraft in 2018, employing 33,000 people. In 2017, the KLM Group generated 10 billion euros in revenue.
KLM Group
Carrying 34.1 million passengers and 621,000 tonnes of cargo, KLM and KLM Cityhopper form the heart of the KLM Group. Via a vast network of 92 European cities and 70 intercontinental destinations, KLM offers direct services to key economic centres all over the world. KLM is a partner in the SkyTeam Alliance, which offers passengers even more possibilities, jointly serving 1,063 destinations in 173 countries. The KLM Group also includes the wholly owned subsidiaries Transavia and Martinair. Transavia is the leading low-cost airline in the Netherlands, carrying almost 9 million passengers in 2018, operating out of Amsterdam, Eindhoven, and Rotterdam.
Based on the principle that our people are the key to our brand; we are convinced that we can make the difference by consistently offering our customers a memorable experience. This ambition is in our DNA. Thanks to the sincere attention we give our passengers, they feel acknowledged, contented and at ease.
Following the merge with Air France in 2004, KLM has pursued the concept of 1 Air France-KLM Group, 2 airlines, and 3 core activities (passengers, cargo, and engineering & maintenance). Together with Air France, KLM plays a pioneering role in the European air transport industry. KLM pursues profitable growth in order to achieve its own commercial objectives as well as more general economic and social objectives. KLM is actively driving sustainable growth at Amsterdam Airport Schiphol and seeks to gain access to any market that will improve the quality of its network. In addition, KLM endeavours to ensure a level playing field for all participants in the sector.
https://www.klm.com/travel/nl_en/corporate/company_profile.htm
Korean Airlines (KRX:003940)
Korean Air was established on March 1, 1969, after the Hanjin Group acquired government-owned Korean Air Lines, which had operated since June 1962. Through their majority control of Hanjin KAL Corporation, the Cho family, the owner family of Hanjin Group is still the airline's largest and controlling, shareholder; Cho Won-tae (aka Walter Cho), its current Chairman and CEO, is the third generation of the family to lead the airline.
About Us
On March 1, 1969, Korean Air started off as a small airline in Asia, with only eight planes. Since then, we have striven to develop new markets and improve customer service through continuous changes and investments.
"To be a respected leader in the world airline community." This is the vision we announced in 2004 to celebrate Korean Air's 35th anniversary. Under the slogan, "Excellence in Flight," we have been endeavouring to provide our customers with safer and more distinguished services than any other airline in the world.
In 2019, Korean Air celebrated its 50th anniversary. With the love of our customers and trust of our nation, Korean Air has soared to greater heights as a leading global airline. We will never forget that our roots lie in the support and trust shown by our customers, who have been calling us the "Wings of the People" over the past half a century.
Korean Air is taking the next step and flying towards another 100 years. We will be reborn as the "Wings of the World" and contribute to creating a better society for all.
Under the core values of "safety" and "customer satisfaction," we will continue dedicating the utmost effort to establishing Korean Air, an airline everyone wants to fly with, as a respected leader in the global aviation industry.
https://www.koreanair.com/my/en/footer/about-us/who-we-are/overview/greetings
30 January 2024
Korean Air's tentative Q4 and full year 2023 financial results (non-consolidated)
- Korean Air achieved a record-high revenue of KRW 14.5751 trillion (USD 11.3 billion) in 2023, with an operating profit of KRW 1.5869 trillion (USD 1.23 billion). The airline also achieved a record-high quarterly revenue of KRW 3.9801 trillion (USD 3.09 billion) in its fourth fiscal quarter.
- Korean Air's cargo business performed strongly during the pandemic due to global supply chain issues, ocean freight bottlenecks, and limited aircraft belly cargo capacity. However, with the recovery of the air cargo industry post pandemic, cargo operating profit decreased year-on-year.
- For the full year of 2023, Korean Air reported a higher operating profit compared to 2019. The airline's 2023 operating profit margin was 10.9%, a higher rate than the industry average. The fourth quarter's year-on-year decrease in operating profit is a result of an increase in staff wages that included incentives for achieving annual performance and safety performance targets.
- Annual passenger business revenue increased compared to 2019, driven by strong travel demand and higher premium class demand despite network capacity only recovering to 80 percent of pre-pandemic levels. In the cargo sector, while revenue decreased due to the rebound of passenger belly cargo capacity and the normalization of ocean freight, a higher level of profitability was maintained compared to 2019.
- Korean Air anticipates passenger demand and capacity to fully recover in Q1. Long-haul demand is expected to remain robust, and the airline forecasts the recovery of tourism demand during the peak winter season to boost revenue. Korean Air will maximize revenue by resuming routes and increasing capacity to popular tourist destinations in Southeast Asia and Japan.
- In Q1, rebound of air cargo demand for traditional items, such as semiconductors, automobiles and displays, remains uncertain due to the weakened global economy. The airline aims to respond flexibly to the ongoing robust demand in e-commerce that has carried over from the end of last year, and will respond to supply chain uncertainties arising from global geopolitical risks.
https://www.koreanair.com/my/en/footer/about-us/newsroom/list/240130-financial-results-2023
Lufthansa (DAX: LHA)
Business Activities
The Lufthansa Group is an aviation group with operations worldwide. With 135,353 employees, the Lufthansa Group generated revenue of EUR 36,424m in the financial year 2019. The Lufthansa Group is composed of the segments Network Airlines, Eurowings and Aviation Services. Aviation Services comprises the segments Logistics, MRO, Catering and Additional Businesses and Group Functions. The latter also include Lufthansa AirPlus, Lufthansa Aviation Training, and the IT companies. All segments occupy a leading position in their respective markets.
Organisation
Deutsche Lufthansa AG has the management and supervisory structures typical for companies in Germany. The Executive Board is responsible for managing the Company and defining its strategic direction. In doing so, the aim is to increase Company value sustainably. The Supervisory Board appoints, advises, and supervises the Executive Board. Deutsche Lufthansa AG is the parent company and the largest single operating company in the Lufthansa Group. The individual business segments are run as separate Group companies, with the exception of the Lufthansa Passenger Airlines. They have their own profit and operating responsibility and are monitored by their respective supervisory boards, in which members of Deutsche Lufthansa AG's Executive Board are also represented.
https://www.lufthansagroup.com/en/company/company-portrait.html
5 May 2022
Lufthansa Group benefits from significant increase in demand during the first quarter of 2022 and expects record summer for holiday travel.
- Demand increases significantly in the first quarter
- Lufthansa Cargo again with a record result
- Significantly positive Adjusted free cash flow driven by strong bookings
- Financial outlook confirmed despite uncertain fuel cost outlook
- Group plans to terminate stabilization measures in Switzerland in the second quarter
Carsten Spohr, CEO of Deutsche Lufthansa AG, said:
"The world is currently witnessing the importance of understanding and collaboration among people. Aviation makes an important contribution to this - it strengthens the exchange between people. We continue on our mission to connect people, cultures and economies in a sustainable way.
The restrictions on air traffic have largely been overcome. We are now mentally ticking off the crisis and once again leading the way - more focused, more efficient and more sustainable than before the pandemic. The past few weeks in particular have clearly shown how great people's desire to travel is. New bookings are increasing from week to week - among business travelers, but especially for vacation and leisure travel.
Supply chains around the world are still disrupted while demand for freight capacity remains high. This makes our strategic decision to further strengthen Lufthansa Cargo even more valuable."
First Quarter Results 2022
The Lufthansa Group recovered from the spread of the Omicron variant over the course of the first quarter of 2022. After the beginning of the year was still burdened by high infection rates especially in the Group's home markets, customer demand started to recover strongly, especially in March. In addition to high touristic demand, the business travel segment also recorded an increasing recovery.
Compared to the previous year, the Group more than doubled its revenue to 5.4 billion euros (previous year: 2.6 billion euros). Adjusted EBIT amounted to
- 591 million euros and thereby also improved noticeably compared to the prior year quarter, despite the effects of the pandemic (previous year:
- 1.0 billion euros). The Adjusted EBIT margin increased accordingly to
- 11.0 percent (previous year: -40.9 percent). Net income of -584 million euros also improved compared to the same quarter in the prior year (previous year: -1.0 billion euros).
Group airlines quadruple passenger numbers
The number of passengers on board the Group airlines more than quadrupled in the first quarter compared to the same period last year. Between January and March, the airlines of the Lufthansa Group welcomed 13 million passengers on board (previous year: 3 million).
As a result of the strong increase in demand for air travel during the first quarter, the available capacity was also significantly increased towards the end of the quarter. Between January and March 2022, passenger airline capacity averaged 57 percent of the pre-crisis level (171 percent up on the previous year).
The Adjusted EBIT of the passenger airlines amounted to -1.1 billion euros (previous year: -1.4 billion euros). The result was burdened by low seat load factors especially at the beginning of the quarter, rising fuel costs and the non-recurrence of short-time work subsidies in the prior year. However, yields were close to pre-crisis levels. On long-haul, yields even exceeded the 2019 level.
Lufthansa Cargo strength continues, Lufthansa Technik achieves clearly positive result
The positive earnings development in the logistics business segment continued in the first quarter of 2022. Cargo capacities worldwide continue to be limited by the lack of belly capacity in passenger aircraft and disruption in global supply chains, while demand remains high. This benefited Lufthansa Cargo which again achieved a record result. Adjusted EBIT rose by 57 percent in the first quarter to 495 million euros (previous year: 315 million euros).
The business of Lufthansa Technik continued to recover in the first quarter of 2022. Demand for maintenance and repair services increased as airlines worldwide prepare for further market recovery in the coming months. Lufthansa Technik achieved a positive Adjusted EBIT of 120 million euros in the first quarter of 2022 (previous year: 45 million euros). The business unit thus improved its earnings by 167 percent.
The LSG Group's result was down on the previous year with an Adjusted EBIT of -14 million euros (previous year: -8 million euros) due to the absence of government support measures in the USA. Without this effect, the result would have improved.
Strong free cash flow, liquidity continues to increase
In the course of the first quarter of 2022, the number of bookings increased sharply - especially towards the end of the quarter. Many people booked their long-awaited Easter and summer holidays during this time. Driven by the high level of incoming bookings, adjusted free cash flow was clearly positive at 780 million euros (previous year: -953 million euros). As a consequence, net debt declined to 8.3 billion euros at March 31, 2022 (Dec 31, 2021: 9.0 billion
euros).
At the end of March 2022, the company's available liquidity amounted to 9.9 billion euros. Thereby, liquidity continues to exceed the target range of 6 to 8 billion euros. This does not yet include the signing of a revolving credit facility at the beginning of April, which increases the volume of available credit lines by 1.3 billion euros. At the end of December 2021, the available liquidity of the Lufthansa Group amounted to 9.4 billion euros.
Due to the positive liquidity development, the company intends to terminate the stabilization measures in Switzerland ahead of schedule in the second quarter. At the end of the first quarter, SWISS had drawn down 210 million Swiss francs of the state-backed loan facility amounting to 1.5 billion Swiss francs in total. After the repayment of the drawn portion, the entire credit line shall be terminated in full.
Remco Steenbergen, CFO of Deutsche Lufthansa AG:
"Demand has recovered faster and stronger than expected in recent weeks. The current level of bookings gives us confidence that our financial results will further improve in the coming quarters.
We must pass through rising costs to customers. In addition, the implementation of the remaining cost reduction measures amounting to a good half billion euros will contribute to making our company as resilient as possible in the current uncertain environment."
Outlook
The desire for people to travel is great. In recent weeks, more flight tickets were bought than at any time since the beginning of the pandemic. Last week (CW17), the company sold more flight tickets in one week as in the same period in 2019. With over 120 classic holiday destinations, the airlines of the Lufthansa Group are offering more choice of tourist destinations than ever before. Destinations in the USA, South America and the Mediterranean are in particularly high demand. This summer, more people are expected to fly on holiday with the airlines of the Lufthansa Group than ever before. The volume of business travel in the Group is also expected to recover by the end of the year to around 70 percent of its pre-crisis level. Due to continued high demand in the premium segment and rising price levels, the Lufthansa Group expects an at least high-single-digit percentage rate increase of average yields in the remainder of 2022 compared to 2021. As result, yields will exceed the pre-crisis level of 2019.
The company plans to offer around 75 percent of the pre-crisis capacity in the second quarter of 2022. This should significantly improve the passenger airlines' result. In the Logistics and MRO segments the positive trends of the past three months should continue.
For the full year 2022, the Lufthansa Group is planning an annual average passenger airline capacity of around 75 percent. In the summer, around 95 percent of the pre-crisis capacity will be offered on European short-haul routes and around 85 percent on the Transatlantic.
Nevertheless, uncertainties remain for the company's further business development. In view of the extreme changes in the price of kerosene in recent weeks, the development of fuel costs in particular cannot be accurately forecasted for the year as a whole. Equally, the effects of the war in Ukraine and the significant increase in inflation on consumer behavior cannot be predicted precisely. The financial forecast for the full year remains unchanged for an improvement in Adjusted EBIT compared to the previous year.
|
LUFTHANSA GROUP |
Jan - Mar 2022 |
Jan - Mar 2021 |
Change in % |
||||||
|
Revenue and result |
|||||||||
|
Total revenue |
€m |
5,363 |
2,560 |
109 |
|||||
|
of which traffic revenue |
€m |
3,833 |
1,542 |
149 |
|||||
|
Adjusted EBIT1) |
€m |
-591 |
-1,048 |
44 |
|||||
|
Adjusted EBIT margin1) |
% |
-11.0 |
-40.9 |
29.9 pts |
|||||
|
EBIT |
€m |
-640 |
-1,135 |
44 |
|||||
|
Net profit/loss |
€m |
-584 |
-1,049 |
44 |
|||||
|
Earnings per share |
€ |
-0.49 |
-1.75 |
72 |
|||||
|
Key balance sheet and cash flow statement figures |
|||||||||
|
Total assets |
€m |
44,386 |
38,453 |
15 |
|||||
|
Cash flow from operating activities1) |
€m |
1,496 |
-775 |
||||||
|
Gross capital expenditures |
€m |
640 |
153 |
318 |
|||||
|
Net capital expenditures |
€m |
637 |
87 |
632 |
|||||
|
Adjusted free cash flow1) |
€m |
780 |
-953 |
||||||
|
Employees |
|||||||||
|
Employees as of 31 Mar |
number |
104,034 |
111,262 |
-6 |
|||||
https://investor-relations.lufthansagroup.com/en/news/financial-news/investor-relations-financial-news/date/2022/05/05/lufthansa-group-benefits-from-significant-increase-in-demand-during-the-first-quarter-of-2022-and-expects-record-summer-for-holiday-travel.html
Qantas Group (ASX: QAN)
About Qantas Group
Qantas is the world's second oldest airline. Founded in the Queensland outback in 1920, Qantas has grown to be Australia's largest domestic and international airline. Registered originally as Queensland and Northern Territory Aerial Services Limited (QANTAS), Qantas is widely regarded as the world's leading long-distance airline and one of the strongest brands in Australia.
We have built a reputation for excellence in safety, operational reliability, engineering and maintenance, and customer service. In 2004, we launched Jetstar in Australia - a low-cost carrier that has since grown to six Jetstar-branded airlines operating across Asia Pacific.
The Qantas Group's main business is the transportation of customers using two complementary airline brands - Qantas and Jetstar. Our airline brands operate regional, domestic and international services, and in the financial year ended June 2018 carried more than 55 million passengers.
The Group's broad portfolio of subsidiary businesses ranges from Qantas Freight Enterprises to Qantas Frequent Flyer and adjacent Qantas Loyalty businesses. We also operate subsidiary businesses including other airlines, and businesses in specialist markets such as Q Catering.
Overview of Operations
The Qantas Group consists of five operating segments, which work together as an integrated portfolio:
- Qantas Domestic is the largest carrier in the Australian domestic market, with over 40 per cent share measured by capacity. Qantas Domestic has a growing margin advantage over competitors, with a brand, network and product offering targeted at business and premium leisure customers who value the full-service experience. Qantas Domestic continues to invest in customer experience, with on-board Wi-Fi rollout underway, along with upgrades to the Domestic lounges at Brisbane and Melbourne. Along with Jetstar Domestic, the Group's dual brand strategy continues to deliver leading margins in the Australian domestic market.
- Qantas International is the largest carrier into and out of Australia, also targeting business and premium leisure customers who value the full-service experience. With significant transformation achieved to date, Qantas International is leveraging a reshaped cost base and network as well as premier airline partnerships for growth. Along with being a founding member of the oneworld alliance or airlines, cornerstone joint ventures have been formed with Emirates, American Airlines (subject to regulatory approval), and China Eastern. Fleet changes, with the introduction of the first 787-9's in 2018 and evaluation of ultra-long range aircraft for 2022, will enable new network opportunities and cost efficiencies. As of 1H18, Qantas International included the Qantas Freight business.
- Jetstar Group has its primary operations in Australia and New Zealand, delivering low fares and a differentiated product offering to the price-sensitive market. At the same time as Jetstar continues to expand on domestic and international routes in Australia and New Zealand, joint ventures in the fast-growing Asian markets of Singapore, Japan and Vietnam are building a pan-Asian network and brand presence
- Qantas Loyalty is comprised of Australia's leading consumer and SME coalition loyalty programs - Qantas Frequent Flyer and Qantas Business Rewards. Qantas Loyalty continues to expand and diversify its portfolio by developing new revenue streams in health insurance through Qantas Assure, in credit cards with the launch of the Qantas Premier credit card, in online retailing, prepaid cash services, data analytics, employee recognition and reward schemes, and other communities that support the core coalition loyalty programs. Qantas Loyalty provides a stable, cash growth vehicle for the Group's earnings profile.
https://investor.qantas.com/home/?page=about-the-qantas-group
22 February 2024
QANTAS GROUP PROFIT IN 1H24 SUPPORTS CONTINUED INVESTMENT IN CUSTOMERS
- Underlying Profit Before Tax: $1.25 billion (down 13 per cent).
- Statutory Profit After Tax: $869 million (down 13 per cent).
- Statutory earnings per share: 52 cents (down 4 per cent).
- Net debt: $4.0 billion.
- Additional on-market share buy-back of up to $400 million announced.
- Fares falling as capacity continues to normalise; restart costs unwinding.
- Significant improvement in customer satisfaction; more work to do.
- Capital expenditure rising in FY25 to between $3.7-3.9 billion.
- 8 additional A321XLRs on order for Qantas Domestic.
- Acceleration of Qantas International Wi-Fi from end calendar 2024.
- $500 staff travel credit for around 24,000 employees.
The Qantas Group has continued its investment in customers and new aircraft, supported by a $1.25 billion Underlying Profit Before Tax for the first half of FY24.
Earnings were 13 per cent lower than the same period of FY23 as fares and capacity continued to normalise.
Lower fares contributed to reduced revenue per available seat kilometre1 which had around a $600 million impact on profit, while freight yields fell by $146 million. However, this was mostly offset by contribution from increased flying of $485 million and unwinding of transition costs from the post-COVID restart of $179 million. Unit cost (excluding fuel) fell by 5.2 per cent year-on-year.
Total flying increased by 25 per cent on an available seat kilometre basis and the Group carried 3.3 million more passengers compared with 1H23.
Travel demand remains strong across all sectors, with leisure continuing to lead and business travel now approaching pre-COVID levels. Intent to spend on travel among Qantas Frequent Flyers over the next six months remains significantly higher than most other major spending categories2 .
INVESTING IN CUSTOMERS AND PEOPLE
The Qantas Group has today announced several major investments for customers, including revealing the interiors of its new A220 aircraft, accelerated rollout of Wi-Fi on international flights and a major upgrade to digital platforms. A double Qantas Points/Status Credits offer for Frequent Flyers has also been launched in addition to regular domestic and international fare sales.
The Group continues to invest heavily in people, including recruitment and training. New aircraft represent a significant career opportunity and are a key driver of promotions and investment in new skills.
As part of recognising the efforts of its people, around 24,000 non-executive employees will receive a $500 staff travel voucher to go towards already heavily discounted standby fares available to Group employees, family and friends.
CEO COMMENTS
Qantas Group CEO Vanessa Hudson said: "We know that millions of Australians rely on us and we've heard their feedback loud and clear.
"There's a lot of work happening to lift our service levels and the early signs are really positive. Our customer satisfaction scores have bounced back strongly since December and we have more service and product improvements in the pipeline.
"Having the financial strength to keep investing is key, and that makes the strong performance that all business units had in the first half so important.
"We understand the need for affordable air travel and fares have fallen more than 10 per cent since peaking in late 2022. At the same time, we've seen a cost benefit from fewer cancellations and delays, and scale benefits as more international flying returns.
"Our people have been instrumental in the initial recovery we're seeing and I thank them sincerely. The journey we're on will take time, but the spirit they are bringing is fantastic and it's made us optimistic about what we can achieve together.
"I want to thank our customers and our partners for their support as we keep working to make the Qantas Group an organisation that everyone is proud of. We need to deliver a service that is consistently better in order to succeed long term, and that's what we're focussed on," added Ms Hudson.
GROUP DOMESTIC
Qantas Domestic increased its flying by 5 per cent in 1H243 in response to the ongoing recovery in business travel while premium leisure and resource sector demand remained strong. Market share was maintained and customer satisfaction increased materially from December onwards.
More flying saw revenue increase by around 3 per cent, however falling fares were a factor in Underlying EBIT for Qantas Domestic declining by 18 per cent to $641 million compared with 1H23, which is still significantly above FY19 levels.
Some industry overheads, such as airport and security charges, grew above the rate of inflation and there were also higher costs associated with greater investment in customer experience. Transition costs from the post-COVID restart continue to unwind and improved operational performance drove additional efficiency.
Jetstar Domestic's performance improved significantly. Less operational disruption (including resolving supply chain issues) and an increase in flying by 15 per cent saw its Underlying EBIT increase by 35 per cent to $175 million.
GROUP INTERNATIONAL AND FREIGHT
Qantas International increased its capacity by 39 per cent in 1H244 as an additional A380 returned to flying and one new Boeing 787 entered service. All pre-COVID routes have now restarted and new ones were announced, including Perth-Paris. Unit cost declined as economies of scale improved through increased flying.
Jetstar's international flying increased by 38 per cent compared with 1H23, which included new routes such as Melbourne-Fiji and Brisbane-Tokyo, plus a recovery in airlines based in Japan and Singapore. This extra capacity combined with strong leisure demand and a material improvement in operational reliability to drive an increase in Underlying EBIT to $150 million, even as fares moderated.
Domestic freight performance was largely stable, underpinned by the strength of e-commerce and modernisation of the Qantas Freight fleet. By contrast, international freight performance declined significantly as macroeconomic factors weighed on demand and capacity grew on key routes; overall, freight revenue was down by around $200 million but yields remained circa 150 per cent above pre-COVID levels.
Changes in the freight market were the main driver of a 31 per cent drop in Underlying EBIT by the Qantas International (including Freight) division.
QANTAS LOYALTY
Qantas Loyalty expanded significantly during the half, adding more members to reach 15.8 million and adding several major program partners. Value of bookings via Qantas Hotels and Holidays increased by around 30 per cent compared with 1H23; TripADeal bookings grew by more than 60 per cent.
The number of Qantas-branded home and motor insurance policies increased by a factor of 2.5 times compared with 1H23 and financial services continued to grow, with more than 100,000 credit card acquisitions during the half and a 4 per cent increase in the value of purchases on cards earning Qantas Points.
Underlying EBIT grew by 23 per cent compared with 1H23 to reach $270 million. The strong performance in calendar 2023 meant Loyalty achieved its earnings target of $500 million per annum six months ahead of schedule.
The Group is still working to finalise improvements to the Frequent Flyer program that will represent a significant investment for members, with the aim of announcing them by April
FLEET AND SUSTAINABILITY UPDATE
The Group took delivery of eight new and mid-life aircraft during 1H24 as its fleet renewal program ramps up. A further 14 aircraft are expected to arrive during 2H24. Below are key updates on the Group's overall fleet plan; please refer to Investor Presentation for more detail.
- 8 additional A321XLRs have been allocated to Qantas Domestic from the Group's existing Airbus order. This takes the total number of this type allocated to Qantas Domestic to 28 as part of the gradual replacement of its 737 fleet.
- Four additional mid-life A319s have been purchased for Network Aviation and will be based in WA to help meet demand from the resources sector. These additional aircraft are expected to arrive progressively during calendar 2024, taking this fleet to nine.
- Manufacturing delays have impacted the delivery dates for the first A321XLR for Qantas Domestic by three months to early-2025 and the A350 for Qantas International (and Project Sunrise) by approximately six months to mid-2026.
The A321LRs delivered to Jetstar are achieving a 20 per cent improvement in fuel burn per seat, contributing to a 12 per cent unit cost improvement compared with the older A320s they replace. This is helping towards the Group's interim emission reduction target of 25 per cent5 by 2030.
FINANCIAL FRAMEWORK AND SHAREHOLDER RETURNS
The Group ended the half with $9.2 billion of liquidity, including $1.5 billion in cash, $1.4 billion in undrawn facilities and $6.3 billion in unencumbered assets.
Net debt rose to $4.0 billion at the end of December 2023 as new aircraft were delivered, the rebuild of forward revenue normalised, $452 million of buy-backs were undertaken and bonuses were paid to around 20,000 employees. Net debt is now at the bottom of the target range ($4.0 - 5.0 billion) and it is expected to move to the middle of that range as the Group aims for the most efficient use of its capital.
The Board has approved a return to shareholders of up to $400 million in the form of an on-market share buyback. This is in addition to the outstanding balance of $48 million from the buy-back announced last year
Qantas will commence this buy-back once it finalises the details and financial impact of planned improvements to its Frequent Flyer program and discloses these to the market. The program changes are expected to deliver a substantial improvement in value to members, supporting the long-term growth of Qantas Loyalty as it targets $800 million-$1 billion Underlying EBIT by FY30.
OUTLOOK
The Group is seeing strong travel demand across the portfolio. Unit revenue is expected to remain stable for domestic and continue to normalise for international as market capacity returns. Key assumptions and expectations for the remainder of FY24 are summarised below; please see the full Investor Presentation for more detail
- FY24 fuel cost expected to be $5.4 billion at current fuel prices, inclusive of hedging.
- FY24 net capital expenditure is expected to be $3.0-3.2 billion.
- FY24 depreciation and amortisation expected to be $1.8 billion.
- Targeting transformation initiatives (mix of efficiency and revenue benefits) of approximately $400 million in FY24 to offset the impact of CPI.
- Net debt expected to be at or below the middle of the target range by the end of FY24.
https://investor.qantas.com/FormBuilder/_Resource/_module/doLLG5ufYkCyEPjF1tpgyw/file/2024HY/1H24-Media-Release.pdf
Qatar Airways
About Qatar Airways
Qatar Airways is proud to be one of the youngest global airlines to serve all six continents, and thanks to our customers' response to our offerings, we are also the world's fastest-growing airline. We connect more than 160 destinations on the map every day, with a fleet of the latest-generation aircraft, and an unrivalled level of service from our home and hub, the Five-star airport, Hamad International Airport in Doha, the State of Qatar.
Travel today involves a mix of short, medium, and long-haul segments, with more people travelling than ever before. With the breadth of network coverage today, virtually no destination is unreachable. This is why the commitment to service is paramount; as our guests are travelling farther and more frequently than ever before, the experience on board is an important part of the journey itself.
Since our launch in 1997, Qatar Airways has earned many awards and accolades, becoming one of an elite group of airlines worldwide to have earned a 5-star rating by Skytrax. Voted Airline of the Year by Skytrax in 2011, 2012, 2015, 2017 and most recently in 2019, Qatar Airways has won the confidence of the travelling public. We have accomplished these goals by focusing on the details - how we run the business, and how you experience our airline.
https://www.qatarairways.com/en-au/about-qatar-airways.html
Qatar Airways Annual Report 2020
Qatar Airways Group Q.C.S.C.
CONSOLIDATED FINANCIAL STATEMENTS
|
CONSOLIDATED INCOME STATEMENT For the year ended 31 March 2020 |
||||
|
Notes |
2020 QR'000 |
2019 QR'000 (Restated) (Note 36) |
||
|
Revenue |
3 |
50,957,443 |
47,927,109 |
|
|
Other operating income |
4 |
164,050 |
136,387 |
|
|
Operating expenses |
5 |
(52,250,854) |
(52,154,328) |
|
|
OPERATING LOSS |
(1,129,361) |
(4,090,832) |
||
|
Other income |
6 |
2,349,115 |
2,284,787 |
|
|
(Loss)/gain on disposal of property, plant and equipment |
(68,754) |
2,340,803 |
||
|
Share of loss from investment in joint ventures and an associate |
13 |
(1,387,058) |
(215,457) |
|
|
General and administrative expenses |
7 |
(4,666,801) |
(3,916,610) |
|
|
Finance costs |
8 |
(1,838,903) |
(489,257) |
|
|
Loss on foreign currency exchange |
(190,181) |
(425,080) |
||
|
Impairment loss on property, plant and equipment |
10 |
(25,462) |
(152,302) |
|
|
LOSS BEFORE TAX |
(6,957,405) |
(4,663,948) |
||
|
Income tax expense |
9 |
(50,347) |
(87,534) |
|
|
LOSS FOR THE YEAR |
(7,007,752) |
(4,751,482) |
||
|
Attributable to: Equity holders of the parent |
(7,008,713) |
(4,752,374) |
||
|
Non-controlling interests |
961 |
892 |
||
|
(7,007,752) |
(4,751,482) |
|||
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 March 2020 |
Note |
2020 QR'000 |
2019 QR'000 (Restated) |
|
|
(Note 36) |
||||
|
Loss for the year |
(7,007,752) |
(4,751,482) |
||
|
Other comprehensive loss: |
||||
|
Items to be reclassified to consolidated income statement in subsequent periods: |
||||
|
Net loss on fair valuation of debt securities at FVOCI |
21 |
(331) |
(73) |
|
|
Net movement on cash flow hedges |
21 |
(514,472) |
- |
|
|
Exchange difference on translation of foreign operations |
(16,685) |
(31,637) |
||
|
(531,488) |
(31,710) |
|||
|
Items not to be reclassified to consolidated income statement in |
||||
|
subsequent periods |
||||
|
Net loss on fair valuation of equity securities at FVOCI |
21 |
(11,917,753) |
(3,212,293) |
|
|
Total other comprehensive loss for the year |
(12,449,241) |
(3,244,003) |
||
|
TOTAL COMPREHENSIVE LOSS FOR THE YEAR |
(19,456,993) |
(7,995,485) |
||
|
Attributable to: |
||||
|
Equity holders of the parent |
(19,457,954) |
(7,996,377) |
||
|
Non-controlling interests |
961 |
892 |
||
|
(19,456,993) |
(7,995,485) |
|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION At 31 March 2020 |
Notes |
31 March 2020 QR'000 |
31 March 2019 QR'000 (Restated) |
1 April 2018 QR'000 (Restated) |
||
|
(Note 36) |
(Note 36) |
|||||
|
ASSETS |
||||||
|
Non-current assets |
||||||
|
Property, plant and equipment |
10 |
70,001,580 |
61,268,533 |
62,348,649 |
||
|
Right-of-use assets |
11 |
34,343,088 |
- |
- |
||
|
Intangibles |
12 |
385,822 |
381,845 |
386,276 |
||
|
Investment in joint ventures and an associate |
13 |
135,837 |
331,774 |
284,826 |
||
|
Investment securities |
14 |
8,951,281 |
18,541,805 |
19,603,713 |
||
|
Loan to an associate |
31 |
- |
139,787 |
129,038 |
||
|
Loan to an affiliate |
31 |
46,711 |
- |
- |
||
|
Deferred tax asset |
4,334 |
4,217 |
1,205 |
|||
|
113,868,653 |
80,667,961 |
82,753,707 |
||||
|
Current assets |
||||||
|
Inventories |
15 |
1,538,280 |
1,536,540 |
1,223,846 |
||
|
Accounts receivable and prepayments |
16 |
4,736,295 |
5,377,309 |
5,025,251 |
||
|
Derivative financial instruments |
32 |
72,415 |
- |
- |
||
|
Short-term deposits |
17 |
88,668 |
575,993 |
837,560 |
||
|
Cash and bank balances |
17 |
7,178,097 |
7,314,408 |
12,474,890 |
||
|
13,613,755 |
14,804,250 |
19,561,547 |
||||
|
TOTAL ASSETS |
127,482,408 |
95,472,211 |
102,315,254 |
|||
|
EQUITY AND LIABILITIES |
||||||
|
Equity |
||||||
|
Share capital |
18 |
45,528,276 |
45,528,276 |
45,528,276 |
||
|
Capital reserve |
19 |
1,643,816 |
1,643,816 |
1,643,816 |
||
|
Legal reserve |
20 |
17,330,381 |
17,219,227 |
17,045,677 |
||
|
Fair value reserve |
21 |
(12,706,672) |
(274,116) |
2,939,321 |
||
|
Furniture, fixtures and equipment reserve |
22 |
16,387 |
13,205 |
11,346 |
||
|
Accumulated losses |
(23,304,964) |
(14,481,217) |
(9,946,100) |
|||
|
Foreign currency translation reserve |
(70,057) |
(53,372) |
(21,735) |
|||
|
Equity attributable to equity holder of the |
||||||
|
parent |
28,437,167 |
49,595,819 |
57,200,601 |
|||
|
Non-controlling interests |
2,209 |
1,248 |
356 |
|||
|
Total equity |
28,439,376 |
49,597,067 |
57,200,957 |
|||
|
Liabilities |
||||||
|
Non-current liabilities |
||||||
|
Employees' end of service benefits |
24 |
1,550,615 |
1,376,673 |
1,207,457 |
||
|
Unredeemed frequent flyer liabilities |
26 |
467,839 |
462,191 |
608,870 |
||
|
Derivative financial instruments |
32 |
87,660 |
- |
- |
||
|
Deferred tax liability |
92,133 |
92,849 |
94,721 |
|||
|
Lease liabilities |
11 |
29,600,758 |
- |
- |
||
|
Interest-bearing loans |
23 |
17,339,183 |
18,337,648 |
9,924,955 |
||
|
Provision for maintenance |
27 |
9,251,428 |
5,722,648 |
5,014,677 |
||
|
Retentions payables |
25 |
78,939 |
32,466 |
6,108 |
||
|
58,468,555 |
26,024,475 |
16,856,788 |
||||
|
Continued… |
|
Qatar Airways Group Q.C.S.C. |
||
|
CONSOLIDATED STATEMENT OF CASH FLOWS |
||
|
For the year ended 31 March 2020 |
||
|
2020 |
2019 |
|
|
Notes |
QR'000 |
QR'000 |
|
(Restated) |
||
|
OPERATING ACTIVITIES |
||
|
Loss before tax |
(6,957,405) |
(4,663,948) |
|
Adjustments for: |
||
|
Depreciation on property, plant and equipment 10(a) |
4,597,629 |
5,024,157 |
|
Amortization on right-of-use assets 11 |
5,419,612 |
- |
|
Finance costs 8 |
1,838,903 |
489,257 |
|
Provision for employees' end of service benefits 24 |
298,737 |
277,042 |
|
Net impairment loss on financial assets 7 and 33 |
148,313 |
41,681 |
|
Provision for obsolete and slow-moving inventories 15 |
42,583 |
27,231 |
|
Reversal of provision for obsolete and slow-moving inventories 15 |
(44,331) |
(127) |
|
Impairment loss on property, plant and equipment 10 |
25,462 |
152,302 |
|
Share of loss from investment in joint ventures and an associate 13 |
1,387,058 |
215,457 |
|
Interest and dividend income 6 |
(1,379,858) |
(901,171) |
|
Loss / (Gain) on disposal of property, plant and equipment |
68,754 |
(2,340,803) |
|
Loss on disposal of FVOCI investments |
4,603 |
- |
|
Operating profit (loss) before working capital changes Working capital changes: |
5,450,060 |
(1,678,922) |
|
Accounts payable and accruals, sales in advance of carriage and |
||
|
provision for maintenance |
(242,080) |
271,662 |
|
Inventories |
8 |
(339,798) |
|
Accounts receivable and prepayments |
544,081 |
(583,932) |
|
Cash generated from / (used in) operations |
5,752,069 |
(2,330,990) |
|
Finance costs paid |
(1,512,892) |
(249,388) |
|
Employees' end of service benefits paid 24 |
(125,192) |
(107,494) |
|
Interest and dividend received |
1,389,156 |
903,101 |
|
Dividend received from investment in joint ventures |
51,583 |
52,290 |
|
Net cash flows from / (used in) operating activities |
5,554,724 |
(1,732,481) |
|
INVESTING ACTIVITIES |
||
|
Proceeds from disposal of property, plant and equipment |
3,375,163 |
10,539,118 |
|
Proceeds from disposal of investment securities |
178,720 |
8,264 |
|
Movement in short-term deposits |
488,011 |
263,886 |
|
Net movement in loan to an associate |
(285,969) |
(325,583) |
|
Loan to an affiliate |
(53,571) |
- |
|
Purchase of investment securities |
(2,508,374) |
(2,158,783) |
|
Additions to property, plant and equipment 10 |
(16,811,387) |
(12,359,907) |
|
Net cash flows used in investing activities |
(15,617,407) |
(4,033,005) |
|
FINANCING ACTIVITIES |
||
|
Proceeds from interest-bearing loans |
31,478,120 |
3,291,916 |
|
Repayment of interest-bearing loans |
(17,528,641) |
(2,686,912) |
|
Payment of principal portion of lease liabilities |
(4,720,037) |
- |
|
Net cash flows from financing activities |
9,229,442 |
605,004 |
|
NET DECREASE IN CASH AND CASH EQUIVALENTS |
(833,241) |
(5,160,482) |
|
Cash and cash equivalents at 1 April |
7,314,408 |
12,474,890 |
|
CASH AND CASH EQUIVALENTS AT 31 MARCH 17 |
6,481,167 |
7,314,408 |
For the full financial report, see:
https://www.qatarairways.com/content/dam/documents/annual-reports/2020/QR_Group_Financials_EN.pdf
Ryanair (LON: RYA)
About Us
Ryanair Holdings plc, Europe's largest airline group, is the parent company of Buzz, Lauda, Malta Air & Ryanair. Carrying 149m guests p.a. (pre Covid-19) on more than 2,100 daily flights from 74 bases, the Group connects over 240 destinations in 40 countries on a fleet of 470 aircraft, with a further 210 Boeing 737s on order, which will enable the Ryanair Group to lower fares and grow traffic to 200m p.a. over the next 5 or 6 years. Ryanair has a team of over 16,000 highly skilled aviation professionals delivering Europe's No.1 on-time performance, and an industry leading 35-year safety record. Ryanair is Europe's cleanest greenest airline group and customers switching to fly Ryanair can reduce their CO₂ emissions by up to 50% compared to the other Big 4 EU major airlines.
https://corporate.ryanair.com/ryanair-facts-and-figures/
25 July 2022
RYANAIR REPORTS Q1 PAT OF €170M AS TRAFFIC RECOVERS STRONGLY POST-COVID BUT AT LOWER FARES
Ryanair Holdings today (25 July) reported a Q1 PAT of €170m (pre-exceptional), compared to a prior year Q1 loss of €273m, but well below the €243m PAT reported in Q1 FY20 (pre-Covid).
|
30 Jun. 2021 |
30 Jun. 2022 |
Change |
|
|
Customers |
8.1m |
45.5m |
+461% |
|
Load Factor |
73% |
92% |
+19pts |
|
Revenue |
€0.37bn |
€2.60bn |
+602% |
|
Op. Costs |
€0.68bn |
€2.38bn* |
+253% |
|
Net (Loss)/ PAT |
(€273m) |
€170m* |
n/m |
|
EPS (euro cent) |
(24.16) |
16.53 |
n/m |
During this quarter;
- Q1 traffic recovered strongly to 45.5m from 8.1m (+9% ahead of pre-Covid).
- Easter bookings & fares badly damaged by the Russian invasion of Ukraine in Feb.
- Sustainalytics1 ranked Ryanair the No.1 EU airline & No.2 World airline for ESG.
- 73 B737-8200 "Gamechangers" delivered ahead of peak S.22.
- S.22 capacity on sale at 115% of S.19 (pre-Covid) levels.
- FY24 fuel hedging increased to 30% (FY23: 80%).
- Net debt reduced to €0.4bn at 30 Jun. (31 Mar.: €1.45bn).
- Majority of A320 leases now extended by up to 4 years to 2028.
Ryanair's Michael O'Leary, said:
ENVIRONMENT:
"Ryanair puts sustainability at the heart of our growth. This summer we are operating 73 new B737 "Gamechanger" aircraft, delivering 4% more seats yet burning 16% less fuel and cutting noise emissions by up to 40%. Passengers flying across Europe who switch to Ryanair (from high-fare legacy airlines) can reduce their environmental footprint by up to 50% per flight, proving that with Ryanair, growth can be coupled with more sustainability, leading to a better future for all our guests and their families.
We continue to work hard to accelerate the production of sustainable aviation fuel (SAF). We are investing in our partnership with Trinity College Dublin's Sustainable Aviation Research Centre, and in April we announced a partnership with Neste to power up to one third of all our flights from Schiphol Airport (AMS) with a 40% SAF blend. Ryanair hopes to power 12.5% of our flights using SAF and cut our CO₂ per pax/km by 10% to 60 grams by 2030. We are working with A4E, and the EU, to accelerate reform of the Single European Sky to improve ATC efficiency and reduce flight delays, which will substantially reduce fuel consumption, CO₂ emissions and flight delays.
In April, Sustainalytics ranked Ryanair the No.1 airline in Europe (No.2 globally) for ESG performance. Building on this achievement, in June we submitted Ryanair's commitment letter to SBTi2 and will work with them over the next 2 years to verify our ambitious targets. Today, we launch our updated (2022) "Aviation with Purpose" sustainability report highlighting ambitious environmental and social targets over the coming years and mapping out Ryanair's path to net carbon zero by 2050.
SOCIAL:
Our growth plans to 2026 will see Ryanair create over 6,000 well paid jobs for highly skilled aviation professionals across Europe. Over the next 3 years, we plan to expand our state-of-the-art training centres, investing over €100m in 2 more, high skills, training facilities (one on the Iberian Peninsula, and one in CEE). This summer we take delivery of the first of 8 new CAE full flight simulators (value over $80m). We continue to invest heavily in our engineering and maintenance teams and recently announced a new maintenance hangar facility in Malta, in addition to newly opened hangars in Kaunas (Lithuania) and Shannon (Ireland). These in- house facilities enable us to create cadet and apprenticeship opportunities for school leavers, bringing through the next generation of highly skilled aviators and aircraft maintenance professionals.
Following the beginning of the post-Covid recovery in air travel this Spring, we moved quickly with our Trade Unions to negotiate accelerated pay restoration agreements, so that we can restore previously agreed pay cuts with all our people as soon as our business returns to pre-Covid levels. To date, accelerated pay restoration agreements have been agreed with Unions representing over 80% of our pilots and approx. 70% of our cabin crews across Europe. We hope to conclude agreements with the small remaining balance in the near future. We and our Trade Union partners, are committed to completing the restoration of these agreed pay cuts, which enabled Ryanair and our Union partners to minimise job losses during the Covid-19 pandemic, at a time when our competitor airlines cut thousands of high skilled jobs.
In Q1, our Customer Panel held their latest meeting at Ryanair's Lab in Madrid. Building on their feedback, Labs will introduce further service improvements over the coming months, including auto check-in and airport express to facilitate faster journeys through airports. While CSAT scores dipped this quarter, due to the impact of ongoing ATC delays on punctuality and lengthy airport security wait times, we still recorded a strong 83% rating (with crew friendliness coming in at over 90%).
GOVERNANCE:
To facilitate orderly NED succession, Julie O'Neill will not seek re-election at the upcoming AGM and has decided to retire from the Board in Sept. Our Chairman, Stan McCarthy, Board colleagues and management thank Julie for 9 years of stellar service to Ryanair. Róisín Brennan will take over as Chair of Remco when Julie departs in September.
OP. PERFORMANCE & GROWTH:
Our decision to work with our unions and agree pay cuts to minimise job losses (and keep crews current) throughout the 2 years of Covid was vindicated in recent months, as many European airlines, airports, and handling companies struggled to restore jobs that were cut during the pandemic. Ryanair seems unusual among the major EU airlines in Summer 22, insofar as we are fully crewed, despite operating at 115% of our pre-Covid capacity. Our business, our schedules and our customers are being disrupted by unprecedented ATC and airport handling delays, but we remain confident that we can operate almost 100% of our scheduled flights, while minimising delays and disruptions for our guests and their families.
Over the past 2-years, numerous airlines went bankrupt and many legacy carriers (incl. Alitalia, TAP, SAS and LOT) only survived by significantly reducing their fleets and passenger capacity, while receiving multi-billion-euro State Aid packages. These structural capacity reductions have created enormous growth opportunities for Ryanair to deploy our new, fuel efficient, B737 Gamechangers and our market share has increased significantly across major markets in Europe. With Boeing scheduled to deliver over 50 more Gamechangers ahead of S.23, we continue to recruit and train substantial numbers of pilots, cabin crew and engineers. Approx. 50% of S.23 capacity is now on sale and we recently announced a new base in Belfast Intl. (S.23), a 4th based aircraft in Venice (W.22) and the commencement of flights from Bologna-Forli (W.22). Thanks to our 210 B737 order book, and available fleet capacity, the Ryanair Group expects to grow from 149m (pre-Covid) passengers to over 225m p.a. by FY26
Q1 FY23 BUSINESS REVIEW:
Revenue & Costs
Q1 scheduled revenues increased 720% to €1.58bn. While traffic recovered strongly from 8.1m to 45.5m passengers (at a 92% load factor), Russia's invasion of Ukraine in Feb. damaged Easter bookings and fares. As such, ave. fares were down 4% on the same quarter pre-Covid. Ancillary revenue continues to perform strongly, as traffic builds, delivering over €22.50 per passenger. Total revenues increased by 600% to €2.6bn.
While sectors increased by almost 330% and traffic rose 460%, operating costs rose just 250% to €2.38bn (incl. a significant 560% increase in fuel to €1bn), driven by lower variable costs such as airport & handling, ownership & maintenance and improved fuel burn as 73 Gamechangers entered the fleet ahead of peak S.22 (offset by the higher cost of jet fuel and route charges). Lower costs, coupled with higher load factors, saw (ex-fuel) unit cost per passenger drop to €30.
hedging has increased to 30% at approx. $92bbl. Carbon credits are over 90% hedged for FY23 at €55 (well below the current spot price of c.€90). This hedge position helps insulate Ryanair against the spiralling cost of fuel, and provides Ryanair with a significant competitive advantage, particularly into W.22.
Following a recent review of B737NG op. lease opportunities and Boeing's failure to agree competitive pricing on a new aircraft order, the Group decided instead, to extend most of our Lauda A320 leases. This process, which is close to completion, will see these leases extended by up to 4 years (until 2028), locking in material rent savings, enhance operational efficiency and facilitate growth opportunities over the coming years.
Balance Sheet & Liquidity
Ryanair's balance sheet is one of the strongest in the industry with a BBB (stable) credit rating (S&P and Fitch). Net debt at 30 June fell to €0.4bn (€1.45bn at 31 Mar.), and over 90% of the Group's fleet of B737s are unencumbered. Despite peak capex this year and next, we still expect to improve the balance sheet to a broadly zero net debt position over the next 2 years. The strength of our balance sheet ensures that the Group is well positioned to exploit the many growth opportunities that exist in a post-Covid Europe.
OUTLOOK:
While we remain hopeful that the high rate of vaccinations in Europe will allow the airline and tourism industry to fully recover and finally put Covid behind us, we cannot ignore the risk of new Covid variants in Autumn 2022. Our experience with Omicron last Nov., and the Ukraine invasion in Feb., shows how fragile the air travel market remains, and the strength of any recovery will be hugely dependent upon there being no adverse or unexpected developments over the remainder of FY23.
While there are clear signs of pent-up demand, bookings remain closer-in than was the norm (pre-Covid) at this time of year. We have limited visibility into the second half of Q2 and almost zero visibility into H2, when we are typically loss making. At this time, Q2 ave. fares are tracking ahead of peak S.19 (pre-Covid) levels by a low double-digit percentage. Ryanair plans to grow FY23 traffic to 165m (+11% on pre-Covid traffic) and will pursue its load active, yield passive strategy to achieve this growth. Despite being one of the best hedged airlines in Europe, high oil prices will lead to increased costs on our 20% unhedged fuel for the remainder of FY23. Given our later booking profile, the lack of visibility, volatile oil prices, potential Covid, geopolitical and supply chain risks, it is too soon to provide meaningful FY23 PAT guidance at this time. We hope to be in a better position to do so at the half year results in Nov. but, as our experience with Omicron last Nov. and Ukraine in Feb. shows, any guidance is subject to a very rapid change from unexpected events which are well beyond our control during what remains a very strong but still fragile recovery."
https://investor.ryanair.com/wp-content/uploads/2022/07/Q1-FY23-Results.pdf
Singapore Airlines (SGX:C6L)
Singapore Airlines (SIA or SQ) is the flag carrier airline of Singapore, with its hub at Singapore Changi Airport.
About Singapore Airlines
First formed in 1972, Singapore's flag carrier airline is best known for its multiple travel accolades and impeccable service standards, embodied in its kebaya (traditional nonya dress)-clad flight attendants (famously known as the Singapore Girl).
Stellar service is just one of a host of reasons that makes Singapore Airlines a world-class travel brand. The airline is also famous for luxurious flight experiences across cabin classes, with state-of-the-art entertainment options, spacious cabins, and a commitment to making flying a personal experience. The airlines' international culinary panel—which comprises eight chefs from all around the globe—are constantly whipping up new dishes to delight the taste buds of passengers onboard.
Singapore Airlines' globally acclaimed standards have won the organisation multiple awards, ranging from a place on Time Magazine's list of 50 Genius Companies 2018 to World's Best Airline at Skytrax's World Airline Awards 2018.
Together with its budget carrier arm, Scoot, Singapore Airlines operates a fleet of more than 180 aircrafts, with a combined passenger network that spans more than 135 destinations.
https://www.visitsingapore.com/en_my/travel-guide-tips/travelling-to-singapore/singapore-airlines/#:~:text=First%20formed%20in%201972%2C%20Singapore's,known%20as%20the%20Singapore%20Girl ).
21 February 2023
SIA GROUP POSTS RECORD QUARTERLY AND NINE-MONTH PROFITS ON STRONG DEMAND
- Highest ever quarterly operating profit, nine-month operating and net profits
- Record passenger load factors for the SIA Group on robust demand across network
- Strong momentum in forward passenger sales for the fourth quarter
- Weaker global demand and increased capacity weigh on the air freight segment
SIA GROUP FINANCIAL PERFORMANCE
Third Quarter FY2022/23 - Profit and Loss
The Singapore Airlines (SIA) Group financial performance for the third quarter FY2022/23 is summarised as follows:
|
Group Financial Results |
3rd Quarter FY2022/23 ($ million) |
2nd Quarter FY2022/23 ($ million) |
Better/ (Worse) (%) |
9 Months FY2022/23 ($ million) |
9 Months FY2021/22 ($ million) |
Better/ (Worse) (%) |
|
Total Revenue |
4,846 |
4,488 |
8.0 |
13,263 |
5,143 |
157.9 |
|
Total Expenditure |
4,091 |
3,810 |
(7.4) |
11,274 |
5,686 |
(98.3) |
|
Net Fuel Cost |
1,333 |
1,423 |
6.3 |
4,029 |
1,443 |
(179.2) |
|
Fuel Cost (before hedging) |
1,529 |
1,638 |
6.7 |
4,642 |
1,551 |
(199.3) |
|
Fuel Hedging Gain |
(196) |
(215) |
(8.8) |
(613) |
(108) |
467.6 |
|
Fair Value Gain on Fuel Derivatives |
- |
- |
- |
- |
(78) |
(100.0) |
|
Non-fuel Expenditure |
2,758 |
2,387 |
(15.5) |
7,245 |
4,321 |
(67.7) |
|
Operating Profit/(Loss) |
755 |
678 |
11.4 |
1,989 |
(543) |
n.m. |
|
Net Profit/(Loss) |
628 |
557 |
12.7 |
1,555 |
(752) |
n.m. |
The robust demand for air travel continued into the third quarter of FY2022/23, building on the momentum that began after Singapore relaxed its border restrictions in April 2022. The Group passenger capacity reached 80% of pre-Covid-191 levels in December 2022, higher than the average of 51%2 for the Asia-Pacific region. SIA and Scoot carried 7.4 million passengers in the third quarter, up 17% from the second quarter. The Group carried 18.8 million passengers during the nine months ended 31 December 2022, up nine-fold from a year before. Passenger load factors for the Group improved 0.8 percentage points to 87.4%, the highest for any quarter, on the back of record load factors for both SIA (87.3%) and Scoot (87.8%).
The cargo segment's performance moderated compared to the previous quarter due to softening demand, as well as an increase in bellyhold capacity as more passenger aircraft returned to service globally. While yields were weaker quarter-on- quarter, they remained elevated - almost double - compared to pre-Covid-191 levels.
As a result, Group revenue for the three months to 31 December rose $358 million (+8.0%) quarter-on-quarter to $4,846 million. This is a record quarterly revenue for the Group. Passenger flown revenue increased by $463 million (+14.0%) to $3,767 million as traffic grew 12.2% for the quarter, outpacing the 11.1% expansion in capacity. Revenue per available seat-kilometre (RASK) was 10.6 cents, the highest quarterly RASK in the Group's history. Cargo flown revenue fell $141 million (-14.1%) to $862 million, with the lower yields (-14.6%) partially mitigated by a slight uptick in loads (+0.6%).
Expenditure grew by $281 million (+7.4%) quarter-on-quarter to $4,091 million. This comprised a $371 million rise in non-fuel expenditure (+15.5%) that was partly offset by a $90 million decrease (-6.3%) in net fuel cost. The increase in non-fuel expenditure was higher than the increase in capacity, mainly driven by higher foreign exchange losses (+$194 million) recorded at the end of the current quarter with the US dollar weakening 6.1% against the Singapore dollar3. Net fuel cost fell to $1,333 million, mainly due to a 13% drop in fuel prices (-$226 million). This was partly offset by higher volumes uplifted (+$103 million) and lower fuel hedging gain (+$19 million).
The Group posted an operating profit of $755 million for the third quarter, up $77 million (+11.4%) from the previous quarter. Operating profit for SIA was $48 million (-7.0%) lower quarter-on-quarter at $636 million. This was largely due to higher non-fuel expenditure (-$340 million), mainly driven by a foreign exchange loss in the current quarter versus foreign exchange gain in the previous quarter (-$229 million), and partly mitigated by higher operating revenue (+$182 million) as well as lower net fuel cost (+$110 million). Scoot achieved a record quarterly operating profit of $135 million, up $123 million or more than 11-fold from the previous quarter. The low-cost carrier's operating revenue surged to a record $592 million (+$145 million), significantly outpacing the increase in operating expenditure (-$22 million).
The strong performance by both SIA and Scoot is a testament to the success of the Group's portfolio strategy, which enables it to effectively capture growth in different traffic segments by deploying the right vehicles to the right markets.
The Group posted a net profit of $628 million, $71 million higher (+12.7%) from the previous quarter. This was due to the better operating performance (+$77 million), net interest income in the current quarter versus net finance charges in the previous quarter (+$71 million), and partially offset by a higher tax expense (-$90 million).
April to December 2022 - Profit and Loss
Revenues rose $8,120 million (+157.9%) year-on-year to $13,263 million, the highest nine-month revenue for the SIA Group. Passenger flown revenue increased $8,160 million (+514.5%) as traffic grew seven-fold, outpacing the 108.9% expansion in capacity. RASK reached 10.1 cents (+197.1%), a record nine-month figure for the Group. Cargo flown revenue reduced $265 million (-8.2%) due to decline in cargo loads (-10.6%) while mitigated by higher yields (+2.7%).
Expenditure grew by $5,588 million (+98.3%) year-on-year to $11,274 million. This consisted of a $2,586 million jump (+179.2%) in net fuel cost, a $2,924 million increase (+67.7%) in non-fuel expenditure, and the absence of the $78 million gain that the Group recorded last year for fair value changes on fuel derivatives. Net fuel cost rose to $4,029 million, mainly from a 70% increase in fuel prices (+$1,866 million) and higher volumes uplifted (+$1,097 million), and partially offset by higher fuel hedging gains (-$505 million). The increase in non-fuel expenditure was lower than the increase in passenger capacity.
The Group recorded an operating profit of $1,989 million for the nine months to December 2022, versus a $543 million loss a year before (+$2,532 million). Net profits rose to a record $1,555 million, reversing the $752 million loss in the previous year (+$2,307 million). This was due to the better operating performance (+$2,532 million) and lower net finance charges (+$194 million), partially offset by a tax expense versus a tax credit a year before (-$438 million).
Balance Sheet
As of 31 December 2022, the Group shareholders' equity was $19.4 billion, a reduction of $3.0 billion from 31 March 2022 following the redemption in December 2022 of the Mandatory Convertible Bonds that were issued in June 2020. Total debt balances increased by $0.4 billion to $16.1 billion, mainly due to the increase in lease liabilities as a result of sale-and-leaseback activities. Consequently, the Group's debt- equity ratio rose from 0.70 times to 0.83 times.
Cash and bank balances saw an increase of $1.6 billion to $15.4 billion, primarily due to net cash generated from operations including proceeds from forward sales. In addition to the cash on hand, the Group retains access to $2.2 billion of committed lines of credit, all of which remain undrawn.
FLEET DEVELOPMENT
During the third quarter, two Boeing 737-8 narrowbody aircraft4 joined SIA's operating fleet after their post-delivery cabin retrofit.
As of 31 December 2022, SIA's operating fleet comprised 133 passenger aircraft5 and seven freighters, while Scoot had 55 passenger aircraft6 in its operating fleet. With an average age of six years and six months, the Group operates one of the youngest and most fuel-efficient fleets in the airline industry7. This allows the Group to continue offering world-class products and services to customers, while pursuing operating efficiencies and significantly reducing its carbon emissions.
SIA is expected to take delivery of one Airbus A350-900 and one Boeing 787-10 in the fourth quarter, with the aircraft joining the operating fleet in the next financial year.
Scoot plans to add nine new Embraer E190-E2 aircraft to its fleet, complementing its larger Airbus A320 Family and Boeing 787 aircraft. These 112-seat planes will enable Scoot to increase its network connectivity by serving thinner routes to non-metro destinations. The first aircraft is scheduled for delivery in 2024, and the remaining eight are to be progressively introduced by the end of 2025. This investment underscores the SIA Group's confidence in the growing demand for air travel in the region, and supports its wider fleet and network expansion strategy at the portfolio level.
NETWORK DEVELOPMENT
During the third quarter, SIA and Scoot stepped up services to meet the strong travel demand during the year-end holiday season. With the relaxation of travel restrictions to selected key markets, the Group reinstated services to destinations in China and Indonesia, and added frequencies to Hong Kong, Seoul, Taipei, and points in Japan. Scoot resumed operations to Hokkaido (Sapporo), offering scheduled services via Taipei as well as direct seasonal services until February 2023. As of 31 December 2022, the Group's passenger network8 covered 111 destinations in 36 countries and territories. SIA served 76 destinations and Scoot served 57 destinations. The cargo network8 comprised 116 destinations in 38 countries and territories.
The SIA Group is resuming services to China as this key market opens up to international travel. Currently, SIA and Scoot serve a total of 149 destinations in China compared to 25 points pre-pandemic.
During the current quarter, Scoot expanded its Indonesia network with the launch of flights to Balikpapan. For the Northern Summer operating season (26 March 2023 to 28 October 2023), Scoot will expand its services to China with flight resumptions to Haikou, Nanning, Ningbo, Shenyang, and Xi'an, and step up frequencies to Athens, Langkawi, Manado, Perth, Taipei-Tokyo (Narita), and Taipei-Hokkaido (Sapporo). SIA will mount supplementary flights to Barcelona, Frankfurt, and Rome during the 2023 summer peak. Services to Busan will resume in August 2023. Scoot's services to Gold Coast and SIA's services to Vancouver will be suspended with effect from July 2023 and October 2023 respectively, as the Group adjusts its capacity in response to demand.
Group capacity is projected to reach an average of around 77% of pre- Covid-191 levels in the fourth quarter of FY2022/23.
PREPARING FOR THE FUTURE
SIA and Tata Sons (Tata) reached an agreement in November 2022 to merge Air India and Vistara, with SIA investing a further $360 million in Air India as part of the transaction. This transaction is subject to regulatory approvals. When completed, it will reinforce SIA's partnership with Tata and give it a 25.1% stake in the enlarged Air India group. The merged entity will be four to five times larger in scale compared to Vistara, with a strong presence in all key airline segments in India. The proposed merger will bolster SIA's presence in India, strengthen its multi-hub strategy, and allow it to continue participating directly in this large and fast-growing aviation market.
Deeper collaboration with like-minded airlines is an integral part of the SIA Group's partnerships strategy. This enables SIA and its partners to drive more traffic to their hubs, offer more options to customers, and increase the Group's global footprint.
In November 2022, Virgin Australia resumed the sale of codeshare flights to 42 destinations in 23 countries and territories across SIA's network, enabling more seamless travel for customers between Australia, Asia, Africa, and Europe. In December 2022, Thai Airways International (THAI) and SIA signed a Memorandum of Understanding to deepen their commercial collaboration. In the initial phase, THAI and SIA will codeshare on their respective flights between Singapore and Bangkok. THAI will also put its code on SIA's flights to destinations in South Africa and the Americas in 2023, subject to regulatory approval. Earlier this month, Vietnam Airlines and SIA signed a Memorandum of Understanding to strengthen the commercial cooperation between the two airlines, including exploring codeshare arrangements between Singapore and Vietnam and potentially other destinations in the SIA network.
OUTLOOK
The demand for air travel is expected to be robust in the fourth quarter, supported by the recovery in East Asia as travel restrictions ease across China, Hong Kong, Japan, and Taiwan. Forward sales remain strong across all markets for both leisure and business travel, as well as all cabin classes. The Group will continue to monitor the demand for air travel, and adjust its capacity accordingly.
Demand for air freight is expected to face headwinds, in addition to the seasonally weaker fourth quarter. This is due to macroeconomic concerns, and a slowdown in new orders as importers trim inventory levels. The increase in bellyhold cargo capacity will also increase the pressure on cargo yields.
The airline industry continues to face geopolitical challenges, slowing economic growth, high cost inflation, and elevated fuel prices. Competition is likely to intensify as airlines inject more capacity on international routes. The SIA Group's robust financial position, its commitment to offer customers best-in-class products and services, as well as its enhanced agility and resilience emerging from the Covid-19 pandemic, will allow it to retain its leadership position in the industry.
For the full financial report, see: https://www.singaporeair.com/saar5/pdf/Investor-Relations/Financial-Results/SGXNET/bu-q3fy2223.pdf
Southwest Airlines (NYSE: LUV)
Company Overview
In its 50th year of service, Dallas-based Southwest Airlines Co. (NYSE: LUV) continues to differentiate itself from other air carriers with exemplary Customer Service delivered by nearly 58,000 Employees to a Customer base that topped 130 million passengers in 2019. Southwest has the nation's most robust point-to-point, non-stop route network, with a strong presence in top leisure and business markets. In peak travel seasons during 2019, Southwest operated more than 4,000 weekday departures among a network of 101 destinations in the United States and 10 additional countries. In 2020, the carrier added service to Hilo, Hawaii; Cozumel, Mexico; Miami; and Palm Springs, Calif. Southwest will begin service to two new seasonal destinations in Colorado, Steamboat Springs, and Montrose (Telluride and Crested Butte) on Dec. 19, 2020. In 2021, Southwest will begin service to both Chicago (O'Hare) and Sarasota/Bradenton on Feb. 14; both Savannah/Hilton Head and Colorado Springs on March 11; Houston (Bush) on April 12; and Jackson, Miss. on June 6.
The carrier has announced an intention to add service in the second quarter of 2021 in Fresno and Santa Barbara. Southwest is leveraging additional airports in or near cities where its Customer base is large, along with adding easier access to popular leisure-oriented destinations from across its domestic-focused network. Southwest coined Transference® to describe its purposed philosophy of treating Customers honestly and fairly, and low fares actually staying low. Southwest is the only major U.S. airline to offer bags fly free® to everyone (first and second checked pieces of luggage, size and weight limits apply, some carriers offer free checked bags on select routes or in qualified circumstances), and there are no change fees, though fare differences might apply.
Southwest has a long history of returning value to its Shareholders. Since 2010, Southwest has returned more than $12.9 billion to Shareholders through share repurchases and dividends, through March 31, 2020. In first quarter 2020, Southwest returned $639 million to Shareholders through the repurchase of $451 million in common stock and the payment of $188 million in dividends.
Dividends and share repurchase programs are currently suspended due to the negative financial effects from the COVID-19 pandemic. From its first flights on June 18, 1971, Southwest Airlines launched an era of unprecedented affordability in air travel described by the U.S. Department of Transportation as "The Southwest Effect," a lowering of fares and increase in passenger traffic wherever the carrier serves. With 47 consecutive years of profitability through 2019, Southwest is one of the most honoured airlines in the world, known for a triple bottom line approach that contributes to the carrier's performance and productivity, the importance of its People and the communities they serve, and an overall commitment to efficiency and the planet.
http://www.southwestairlinesinvestorrelations.com/our-company/company-overview
25 January 2024
Southwest Airlines Reports Fourth Quarter and Full Year 2023 Results
Southwest Airlines Co. (NYSE: LUV) (the "Company") today reported its fourth quarter and full year 2023 financial results:
- Fourth quarter net loss of $219 million, or $0.37 loss per diluted share
- Fourth quarter net income, excluding special items1, of $233 million, or $0.37 per diluted share
- Full year net income of $498 million, or $0.81 per diluted share
- Full year net income, excluding special items1, of $986 million, or $1.57 per diluted share
- Record fourth quarter and full year operating revenues of $6.8 billion and $26.1 billion, respectivelyLiquidity2 of $12.5 billion, well in excess of debt outstanding of $8.0 billion
Bob Jordan, President and Chief Executive Officer, stated, "2023 was a year of significant progress. We finished the year a much stronger Company thanks to the efforts of our incredible People. We completed a comprehensive winter action plan, restored our network, reached full utilization of our fleet, delivered significant new capabilities for our Customers, and had our best fourth quarter completion factor in more than a decade. And, importantly, we have maintained the strength of our investment grade balance sheet, despite the extraordinary challenges over the past few years. Our quarterly performance was at the better end of our expectations and included fourth quarter and full year records for operating revenues and passengers. We ratified five labor agreements in 2023, and with the successful ratification of an industry-leading contract for our Pilots, we have now ratified a total of nine agreements in just over a year, providing competitive market compensation packages to our outstanding People.
"I am very proud of our many accomplishments in 2023, but we have not yet delivered on our financial targets. As we work urgently to restore our profit margins to historical levels, we believe our 2024 plan provides a line of sight to improve our profitability year-over-year, earn our cost of capital this year, and provide significant progress towards our long-term goal to well exceed our cost of capital. Despite inflationary unit cost pressures from new labor agreements and a planned increase in aircraft maintenance, we plan to counter some of those cost pressures through strategic initiatives and already actioned network adjustments, creating operating margin3 expansion, excluding special items, in 2024. We also expect to make notable progress regaining efficiencies, with planned headcount at the end of 2024 flat to down year-over-year as we slow hiring to levels below attrition. We currently expect to grow our full year 2024 available seat miles roughly 6 percent, year-over-year, all of which is carryover from 2023 network restoration related growth. So, there is no net-new additional capacity in 2024. With the restoration of our network behind us, we plan to meter growth and continue to make adjustments, including capacity adjustments if needed, as we work vigorously to hit our financial targets.
"Our 2024 plan leverages a set of initiatives which, most importantly, includes better aligning the route network to new demand patterns. While it is early in the first quarter, these initiatives are delivering value and we expect them to contribute roughly $1.5 billion in incremental year-over-year pre-tax profits. As a result, we expect double-digit year-over-year operating revenue growth and year-over-year operating margin3 expansion. We expect our current initiatives to continue to deliver beyond 2024, and we are actively working on new initiatives. We will be relentless in executing against our plans to drive financial results while enhancing our great Hospitality and delivering a reliable and more efficient operation."
Revenue Results and Outlook:
- Fourth quarter 2023 operating revenues were a fourth quarter record $6.8 billion, a 10.5 percent increase, year-over-year
- Full year 2023 operating revenues were a record $26.1 billion, a 9.6 percent increase, year-over-year
- Fourth quarter 2023 RASM decreased 8.9 percent, year-over-year—better than the Company's previous guidance range due to higher-than-expected close-in bookings and continued yield strength
The Company had record fourth quarter and full year 2023 revenue performance due to healthy leisure demand and continued yield strength, especially during the holiday time periods, coupled with record fourth quarter ancillary revenue, loyalty program revenue, and passengers carried. Close-in bookings, including managed business bookings, performed at the better end of expectations in November and December, driving fourth quarter unit revenues to outperform the Company's previous guidance range.
The Company expects first quarter 2024 RASM to increase in the range of 2.5 percent to 4.5 percent, year-over-year. This increase includes an approximate five point tailwind due to the negative revenue impact incurred in first quarter 2023 associated with the December 2022 operational disruption. Sequentially, the performance represents a healthy improvement driven primarily by network optimization, market share contributions from the Company's Global Distribution System ("GDS") initiative, growth in the Rapid Rewards® loyalty program, and continued strength in overall demand. The network optimization is materially complete with the March 2024 schedule, at which point the Company expects a return to profitability.
After finalizing its 2024 plan, the Company now expects the combination of its network optimization efforts, the continued maturation of its development markets, and the incremental benefit of new and existing strategic initiatives to support 2024 operating margin3 expansion, excluding special items, driven by double-digit operating revenue growth, year-over-year, and lower market jet fuel prices, year-over-year. The Company also believes its 2024 plan provides a line of sight to earn its weighted average cost of capital ("WACC") this year, and provides significant progress towards its long-term goal to consistently achieve after-tax return on invested capital ("ROIC")6 well above the Company's WACC.
Fuel Costs and Outlook:
- Fourth quarter 2023 economic fuel costs were $3.00 per gallon1—at the lower end of the Company's previous expectations—and included $0.05 per gallon in premium expense and $0.12 per gallon in favorable cash settlements from fuel derivative contracts
- Full year 2023 economic fuel costs were $2.89 per gallon1—in line with previous guidance—and included $0.06 per gallon in premium expense and $0.12 per gallon in favorable cash settlements from fuel derivative contracts
- Fourth quarter 2023 fuel efficiency improved 4.0 percent, year-over-year, primarily due to more Boeing 737-8 ("-8") aircraft, the Company's most fuel-efficient aircraft, as a percentage of its fleet
- As of January 17, 2024, the fair market value of the Company's fuel derivative contracts settling in 2024 through the end of 2026 was an asset of $252 million
The Company's multi-year fuel hedging program continues to provide insurance against spikes in energy prices. The Company's current fuel derivative contracts contain a combination of instruments based on West Texas Intermediate and Brent crude oil. The economic fuel price per gallon sensitivities4 provided in the table below assume the relationship between Brent crude oil and refined products based on market prices as of January 17, 2024.
Non-Fuel Costs and Outlook:
- Fourth quarter 2023 operating expenses increased 9.5 percent, year-over-year, to $7.2 billion
- Fourth quarter 2023 operating expenses, excluding fuel and oil expense, special items, and profitsharing1, decreased 0.7 percent, year-over-year
- Fourth quarter 2023 CASM-X decreased 18.1 percent, year-over-year, and full year 2023 CASM-X decreased 1.2 percent, year-over-year—both in line with previous expectations
- Accrued $118 million of profitsharing expense for 2023 for the benefit of Employees
The Company's fourth quarter 2023 CASM-X decreased 18.1 percent, year-over-year, primarily due to the elevated operating expenses and lower capacity levels in fourth quarter 2022 as a result of the December 2022 operational disruption. This unit cost decrease was partially offset by year-over-year general inflationary cost pressures, including higher labor rates for all Employee workgroups, as well as the timing of planned maintenance expenses.
The Company's fourth quarter 2023 results included an approximate $426 million operating expense driven by an increase in the ratification bonus for Pilots as part of the new contract with the Southwest Airlines Pilots' Association ("SWAPA"). The $426 million change in estimate relates to prior periods and was, therefore, treated as a special item in the Company's fourth quarter 2023 Non-GAAP financial results. Of the $426 million change in estimate, $54 million relates to first quarter 2023, $24 million relates to second quarter 2023, $30 million relates to third quarter 2023, and the remaining $318 million relates to periods prior to 2023. As a result, only the $318 million relating to periods prior to 2023 was treated as a special item in the Company's full year 2023 Non-GAAP financial results. The change in estimate recorded in fourth quarter 2023 represents the Company's best current estimate with regards to the final ratification bonus that is due to be paid to each eligible Pilot, as determined as of the agreement ratification date of January 22, 2024. The process to determine the exact amount due to each Pilot, which must also be reconciled with and approved by SWAPA, is complex as it takes into account items that are inherently difficult to estimate. Therefore, the amount is subject to change.
Full year 2023 net interest income, which is included in Other expenses (income), increased $431 million, year-over-year, primarily due to a $366 million increase in interest income driven by higher interest rates, coupled with an $81 million decrease in interest expense driven by various debt repurchases and repayments throughout 2022.
The Company's 2023 effective tax rate was 26.3 percent, approximately three points higher than the Company's expectations primarily due to the tax impact of the settlement reached with the Department of Transportation ("DOT") regarding the December 2022 operational disruption. The Company currently estimates its 2024 effective tax rate to be in the range of 23 percent to 24 percent.
The Company currently expects its first quarter 2024 CASM-X to increase in the range of 6 percent to 7 percent, year-over-year. Approximately three to four points of the increase are driven by higher 2024 market wage rate accruals for Employee workgroups with open agreements and for overall 2024 labor cost increases, including the wage rate increases and agreed-upon work rule changes associated with the recently ratified Pilot contract. The majority of the remaining increase is driven by year-over-year pressure from maintenance expenses.
Furthermore, the Company currently expects similar cost pressures throughout the year, driving 2024 CASM-X to increase in the range of 6 percent to 7 percent, year-over-year. Specifically, the Company expects approximately four to five points of the increase to be driven by higher year-over-year labor costs, and approximately two points of the increase to be driven by higher year-over-year maintenance expenses. Progressing through the year, the Company's focus will be on regaining efficiencies to help counter inflationary cost pressures. To this end, the Company plans to end the year with headcount in the range of flat to down on a year-over-year basis.
Capacity, Fleet, and Capital Spending:
The Company's fourth quarter 2023 capacity increased 21.4 percent, and full year 2023 capacity increased 14.7 percent, both year-over-year. The Company's flight schedule is currently published for sale through October 2, 2024. In light of the Company's efforts to finalize its 2024 plans and moderate capacity growth, the Company now expects first quarter 2024 capacity to increase approximately 10 percent; second quarter 2024 capacity to increase in the range of 8 percent to 10 percent; third quarter 2024 capacity to increase in the range of 3 percent to 5 percent; and full year 2024 capacity to increase approximately 6 percent, all year-over-year. Planned ASM growth in the second half of the year is driven by an expected increase in average aircraft trip stage length with both seats and trips flown expected to be down, year-over-year, in the third and fourth quarters of 2024. The Company continues to plan for capacity growth beyond 2024 in the low- to mid-single-digits, year-over-year. However, the Company will continue to evaluate plans based on progress made against its long-term financial goals.
The Company received 17 -8 aircraft during fourth quarter 2023, including one more -8 aircraft delivery than previously planned, for a total of 86 -8 aircraft deliveries in 2023, compared with previous guidance of 85 -8 aircraft. The Company ended 2023 with 817 aircraft, which reflected 39 -700 aircraft retirements, compared with its previous guidance of 41 retirements, due to shifting two -700 retirements into 2024.
The Company is currently planning for approximately 79 MAX aircraft deliveries in 2024, which differs from its contractual order book displayed in the table below due to Boeing's continued supply chain challenges and the current status of the -7 certification. The Company plans to retire approximately 49 aircraft, including 45 -700s and four -800s, ending 2024 with roughly 847 aircraft in its fleet. The Company's current capacity plans do not assume placing the -7 in service this year and is subject to Boeing's production capability.
The Company's full year 2023 capital expenditures were $3.5 billion, in line with the Company's previous guidance. The Company estimates its 2024 capital spending to be in the range of $3.5 billion to $4.0 billion, which includes approximately $2.2 billion in aircraft capital spending and $1.6 billion in non-aircraft capital spending. Including both capital spending and operating expense budgets, the Company currently expects to spend approximately $1.7 billion in 2024 on technology investments, upgrades, and system maintenance. The Company currently estimates its average annual capital spending to be approximately $4 billion through 2027 and will continue to evaluate this level of capital spending based on the Company's performance compared with its long-term financial goals.
Since the previous financial results release on October 26, 2023, the Company exercised eight -7 options for delivery in 2025. Additionally, the Company accelerated one 2024 -8 firm order into 2023, converted and shifted three 2025 -7 firm orders to three 2024 -8 firm orders, and shifted an additional three 2025 -8 firm orders into 2024, resulting in 85 2024 contractual MAX aircraft deliveries (27 -7s and 58 -8s). The following tables provide further information regarding the Company's contractual order book and compare its contractual order book as of January 25, 2024, with its previous order book as of October 26, 2023.
For full financial report, see: https://www.southwestairlinesinvestorrelations.com/news-and-events/news-releases/2024/01-25-2024-114521040
Turkish Airlines ( IST: THYAO)
Turkish Airlines is the national flag carrier airline of Turkey
Our Success Story
Starting on May 20, 1933 with five planes and fewer than 30 employees, our journey continues today as the airline flying to the most countries in the world - celebrating our 87th year.
Our 87-year success story is marked by the strength we have gained through challenges and difficult times.
Back in 1933, the Turkish Airlines adventure began; an endeavour to unite people, cultures, continents, countries, and cities whilst providing new, inspiring travel experiences for all. On the 20th of May 1933, we took to the skies as State Airlines Administration. Leading the way, Turkey's first aviator and chief executive, Fesan Evrensev, set out with a mere 30 employees and 5 aircraft.
In 1947, proudly flying the Turkish national flag, we conducted our first overseas flight, from Istanbul to Athens. Making headway in 1951, our fleet increased to 33 aircraft and we began to fly to new destinations: Nicosia, Beirut, and Cairo.
In 1955, taking the name of Turkish Airlines, we signed a document listing our extraordinary achievements. Furthermore, our name gained its ranks alongside the members of IATA, International Air Transport Association.
The construction of Istanbul Yeşilköy Airport wrapped up in 1953 and opened to international air traffic. In 1985, it became Atatürk Airport, a global meeting point; a hub to thousands of memorable moments.
In 1958, 5 Viscount 794 aircraft joined our fleet; After switching from piston engines to jet-powered aircraft, a new era dawned in our aviation history.
In 1959, Mesut Manioğlu designed our signature emblem, the wild goose, a fitting image as geese are known to fly up to an altitude of 9,000.
In 1961, pilot captains Zihni Barın and Nurettin made another first in Turkish Airlines history by crossing the Atlantic Ocean on a F-27 aircraft on a 30-hour flight from the USA to Istanbul.
Due to the devoted efforts and the dedication of our workers, our capital increased from 200 million in 1972 to 400 million, an astounding 100% increase.
In 1973, the first McDonnell Douglas DC-10 European aircraft was added to our fleet. A journey that began 40 years ago with 24 personnel experienced an employee network growth of 4,437.
The firm belief in broadening our horizons ensured achievements that gave way to a thriving progression of our success story in the 80's. Since 1983, a fruitful 50 years, we have been bridging continents across the globe, delivering 2,5 million passengers. From Europe, the Middle East, and the Far East, we finally launched flights to America, with more than 5,000 employees on 4 continents serving our world-leading brand.
In 1998, the Turkish Airlines website was launched. In 2001, we put our call centre into service. Purchasing tickets became a lot easier in 2003 with the application of e-tickets and check-in. Turkish Airlines corporate website launched with a new interface on turkishairlines.com.
Customers can now view our website in English, German, Japanese, French, Italian, Spanish, Portuguese, Korean, China and Russian amongst other languages.
It currently takes less than a minute for customers to book tickets on our user-friendly mobile application that is visited by millions daily.
Customer satisfaction is our top priority and we put the utmost care into ensuring that your journey runs as smoothly as possible.
In 2000, we brought you Miles&Smiles, providing exclusive privileges. In 2008, Turkish Airlines joined the global airline confederation, Star Alliance. Upgrades to our catering services aiming to maximize your travel experience. Our collaboration with Turkish Do&Co provides passengers with delicious meals above the clouds specially made by the flying chefs.
Our in-flight entertainment system is jam-packed with the latest movies, music, games and more providing our passengers with a pleasant, fun-filled journey. Additionally, passengers stay connected to the world with the in-flight Wi-Fi service we offer.
Keeping up to date with technology is an essential component of our innovation aims and in maintaining that we have the youngest and most modern fleet in Europe. Our fleet had flourished thanks to our high-tech, fuel-efficient, and environmentally conscious aircraft purchases that provide a high level of comfort.
Due to our unrivalled flight network, young and modern fleet, comfortable seats, and delicious treats, we have earned the title of the Best Airline in Europe. With great passion and ambition, we fly to almost all countries around the world. We thrive on the unique discoveries we deliver to our passengers. Turkish Airlines has engraved its name with exciting world-renowned sponsorships and advertisements.
Our growing passion over the years has earned us the title of the airline that flies to most countries in the world. Today we conduct flights to 120 countries from our new home, Istanbul Airport, with a young fleet of 363 aircraft. We proudly carry the Turkish flag across the globe, opening doors to the wider world for our passengers.
https://www.turkishairlines.com/en-my/press-room/about-us/our-story/
3 May 2021
Q1 Results
TÜRK HAVA YOLLARI ANONİM ORTAKLIĞI AND ITS SUBSIDIARIES
Condensed Consolidated Interim Balance Sheet as at 31 March 2021
(All amounts are expressed in Million Turkish Lira (TL) unless otherwise stated.)
|
Not Reviewed |
Audited |
|
|
ASSETS |
31 March 2021 |
31 December 2020 |
|
Current Assets |
||
|
Cash and Cash Equivalents |
14.679 |
13.293 |
|
Financial Investments |
130 |
131 |
|
Trade Receivables |
||
|
-Related Parties |
226 |
129 |
|
-Third Parties |
5.764 |
4.543 |
|
Other Receivables |
||
|
-Related Parties |
53 |
45 |
|
-Third Parties |
8.214 |
8.037 |
|
Derivative Financial Instruments |
359 |
14 |
|
Inventories |
2.344 |
2.236 |
|
Prepaid Expenses |
1.305 |
1.034 |
|
Current Income Tax Assets |
300 |
280 |
|
Other Current Assets |
776 |
917 |
|
TOTAL CURRENT ASSETS |
34.150 |
30.659 |
|
Non-Current Assets |
||
|
Financial Investments |
438 |
548 |
|
Other Receivables |
||
|
-Third Parties |
9.529 |
8.809 |
|
Investments Accounted by Using Equity Method |
1.820 |
1.881 |
|
Property and Equipment |
35.181 |
30.431 |
|
Right of Use Assets |
122.572 |
108.465 |
|
Intangible Assets |
||
|
- Other Intangible Assets |
745 |
653 |
|
- Goodwill |
103 |
91 |
|
Prepaid Expenses |
6.733 |
5.862 |
|
Deferred Tax Assets |
4 |
3 |
|
TOTAL NON-CURRENT ASSETS |
177.125 |
156.743 |
|
TOTAL ASSETS |
211.275 |
187.402 |
TÜRK HAVA YOLLARI ANONİM ORTAKLIĞI AND ITS SUBSIDIARIES
Condensed Consolidated Interim Balance Sheet as at 31 March 2021
(All amounts are expressed in Million Turkish Lira (TL) unless otherwise stated.)
Not Reviewed Audited
LIABILITIES 31 March 2021 31 December 2020
Current Liabilities
Short Term Borrowings
-Related Parties
-Bank Borrowings 101 101
-Third Parties
-Bank Borrowings 12.016 11.108
Short-Term Portion of Long-Term Borrowings
-Related Parties
-Bank Borrowings 3.680 3.216
-Third Parties
|
-Bank Borrowings |
5.019 |
5.491 |
|
-Lease Liabilities |
13.978 |
12.684 |
|
Other Financial Liabilities |
24 |
126 |
|
Trade Payables |
||
|
-Related Parties |
898 |
1.036 |
|
-Third Parties |
5.480 |
5.286 |
|
Payables Related to Employee Benefits |
833 |
658 |
|
Other Payables |
||
|
-Third Parties |
565 |
645 |
|
Derivative Financial Instruments |
399 |
470 |
|
Deferred Income |
6.479 |
4.511 |
|
Short-Term Provisions |
||
|
-Provisions for Employee Benefits |
149 |
118 |
|
-Other Provisions |
75 |
75 |
|
Other Current Liabilities |
2.163 |
1.854 |
|
TOTAL CURRENT LIABILITIES |
51.859 |
47.379 |
|
Non- Current Liabilities Long-Term Borrowings |
-Related Parties
-Bank Borrowings 13.320 10.288
-Third Parties
|
-Bank Borrowings |
9.472 |
9.389 |
|
-Lease Liabilities |
75.668 |
70.317 |
|
Other Payables |
||
|
-Third Parties |
223 |
162 |
|
Deferred Income |
1.010 |
799 |
|
Long-Term Provisions |
||
|
-Provisions for Employee Benefits |
1.034 |
984 |
|
-Other Provisions |
436 |
359 |
|
Deferred Tax Liability |
10.400 |
8.214 |
|
TOTAL NON-CURRENT LIABILITIES |
111.563 |
100.512 |
|
Equity |
||
|
Share Capital |
1.380 |
1.380 |
|
Inflation Adjustment on Share Capital Items That Will Not Be Reclassified to |
1.124 |
1.124 |
|
Profit or Loss |
||
|
-Actuarial (Losses) on Retirement Pay Obligation |
(358) |
(352) |
|
Items That Are or May Be Reclassified to |
||
|
Profit or Loss |
||
|
-Foreign Currency Translation Differences |
35.199 |
29.483 |
|
-Fair Value Gains on Hedging Instruments |
||
|
Entered into for Cash Flow Hedges |
(1.070) |
(3.301) |
|
-Gains/(Losses) on Remeasuring FVOCI |
(25) |
12 |
|
Restricted Profit Reserves |
238 |
211 |
|
Previous Years Profit |
10.918 |
16.533 |
|
Net Profit/(Loss) for the Year |
438 |
(5.588) |
|
Equity of the Parent |
47.844 |
39.502 |
|
Non-Controlling Interests |
9 |
9 |
|
TOTAL EQUITY |
47.853 |
39.511 |
|
TOTAL LIABILITIES AND EQUITY |
211.275 |
187.402 |
TÜRK HAVA YOLLARI ANONİM ORTAKLIĞI AND ITS SUBSIDIARIES
Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income for the Three-Month Period Ended 31 March 2021
(All amounts are expressed in Million Turkish Lira (TL) unless otherwise stated.)
|
Not Reviewed |
Not Reviewed |
||
|
PROFIT OR LOSS |
1 January- 31 March 2021 |
1 January- 31 March 2020 |
|
|
Revenue |
13.252 |
15.330 |
|
|
Cost of Sales (-) |
(11.977) |
(15.010) |
|
|
GROSS PROFIT |
1.275 |
320 |
|
|
General Administrative Expenses (-) |
(489) |
(431) |
|
|
Marketing Expenses (-) |
(1.306) |
(1.745) |
|
|
Other Operating Income |
423 |
253 |
|
|
Other Operating Expenses (-) |
(196) |
(402) |
|
|
OPERATING PROFIT BEFORE INVESTMENT ACTIVITIES |
(293) |
(2.005) |
|
|
Income from Investment Activities |
372 |
241 |
|
|
Expenses from Investment Activities |
(33) |
- |
|
|
Share of Investments' Profit Accounted by Using The Equity Method |
(131) |
(104) |
|
|
OPERATING PROFIT |
(85) |
(1.868) |
|
|
Financial Income |
1.081 |
120 |
|
|
Financial Expenses (-) |
(767) |
(859) |
|
|
PROFIT BEFORE TAX |
229 |
(2.607) |
|
|
Tax Expense |
209 |
584 |
|
|
Current Tax Expense |
- |
(4) |
|
|
Deferred Tax Expense |
209 |
588 |
|
|
NET PROFIT FOR THE YEAR |
438 |
(2.023) |
|
|
Non-controlling interest |
- |
1 |
|
|
Equity holders of the parent |
438 |
4.535 |
|
|
OTHER COMPREHENSIVE INCOME |
|||
|
Items That May Be Reclassified Subsequently To Profit or Loss |
7.910 |
2.592 |
|
|
Currency Translation Adjustment |
5.716 |
3.685 |
|
|
Losses on Remeasuring FVOCI |
(48) |
(88) |
|
|
Related Tax of Remeasuring FVOCI |
11 |
18 |
|
|
Fair Value Gains/(Losses) on Hedging Instruments Entered into for Cash Flow Hedges |
2.770 |
(1.305) |
|
|
Fair Value Gains/(Losses) Hedging Instruments of Investment Accounted by Using the Equity Method Entered into for Cash Flow Hedges |
20 |
(110) |
|
|
Related Tax of Other Comprehensive (Expense)/Income |
(559) |
392 |
|
|
Items That Will Not Be Reclassified Subsequently To Profit or Loss |
(6) |
(27) |
|
|
Actuarial Losses on Retirement Pay Obligation |
(8) |
(34) |
|
|
Related Tax of Other Comprehensive Income |
2 |
7 |
|
|
OTHER COMPREHENSIVE INCOME FOR THE YEAR |
7.904 |
2.565 |
|
|
TOTAL COMPREHENSIVE (EXPENSE)/INCOME FOR THE YEAR |
8.342 |
542 |
|
|
Basic Gain/(Loss) Per Share (Kr) |
0,32 |
(1,47) |
|
|
Diluted Gain/(Loss) Per Share (Kr) |
0,32 |
(1,47) |
For the full report, see:
https://investor.turkishairlines.com/documents/financial-results/thyao-ing-mart-2021.pdf
United Airlines (NASDAQ: UAL)
United Airlines Holdings, Inc. (formerly known as United Continental Holdings, Inc., UAL Corporation, Allegis Corporation and founded originally as UAL, Inc.) is a publicly traded airline holding company headquartered in the Willis Tower in Chicago. UAH owns and operates United Airlines, Inc.
Company Overview
United's shared purpose is "Connecting People. Uniting the World." We are more focused than ever on our commitment to customers through a series of innovations and improvements designed to help build a great experience: Every customer. Every flight. Every day. Together, United and United Express operate approximately 4,900 flights a day to 362 airports across six continents. In 2019, United and United Express operated more than 1.7 million flights carrying more than 162 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C. United operates 791 mainline aircraft and the airline's United Express carriers operate 581 regional aircraft. United is a founding member of Star Alliance, which provides service to 195 countries via 26 member airlines. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
https://ir.united.com/company-information/company-overview
23 January 2024
United Airlines Announces Full-Year and Fourth-Quarter 2023 Financial Results
Fourth-Quarter Financial Results
- Capacity up 14.7% compared to fourth-quarter 2022.
- Total operating revenue of $13.6 billion, up 9.9% compared to fourth-quarter 2022.
- TRASM4 down 4.2% compared to fourth-quarter 2022.
- CASM4 down 0.1%, and CASM-ex1,4 up 4.9%, compared to fourth-quarter 2022.
- Pre-tax income of $0.8 billion, with a pre-tax margin of 5.7%; adjusted pre-tax income1 of $0.8 billion, with an adjusted pre-tax margin1 of 6.2%.
- Net income of $0.6 billion; adjusted net income1 of $0.7 billion.
- Diluted earnings per share of $1.81; adjusted diluted earnings per share1 of $2.00.
- Average fuel price per gallon of $3.13.
Full-Year Financial Results
- Net income of $2.6 billion; adjusted net income1 of $3.3 billion.
- Pre-tax income of $3.4 billion, with a pre-tax margin of 6.3%; adjusted pre-tax income1 of $4.3 billion, with an adjusted pre-tax margin1 of 8.0%.
- Diluted earnings per share of $7.89; adjusted diluted earnings per share1 of $10.05.
- Ending available liquidity3 of $16.1 billion.
- Total debt and finance lease obligations of $29.3 billion at year end.
- Adjusted net debt1 to adjusted EBITDAR1 of 2.9x, consistent with the guidance provided at the start of the year.
Key Highlights
- Announced orders for 110 more aircraft for delivery beginning in 2028 - another significant milestone in the company's United Next growth strategy.
- Took delivery and flew the first revenue flight of the airline's first A321neo. The new aircraft is achieving the highest customer survey results in the entire fleet.
- United pilots represented by the Air Line Pilots Association, International (ALPA) ratified a new four-year contract. In addition, employees represented by International Association of Machinists & Aerospace Workers (IAM) and United ratified a new 2-year contract in May.
- Accrued $681 million for the year for employee profit sharing.
- Opened five new United Club℠ locations across three hubs, including the airline's largest - a 35,000 sq. ft. club in its Denver hub.
- Announced significant updates to Houston and Denver hubs and opened a new Terminal A at Newark.
- Celebrated the graduation of United Aviate Academy's inaugural class of pilots, an important step toward training the next generation of talented, qualified, and motivated aviators.
- Launched the United Airlines Ventures Sustainable Flight Fund℠, a first-of-its-kind investment vehicle designed to leverage support from cross-industry businesses to support start-ups focused on decarbonizing air travel through sustainable aviation fuel (SAF) research, technology and production associated with SAF, convening nearly $200 million in investment power to support the production of SAF since the launch.
- Opened an expanded and newly renovated global Inflight Training Center in Houston, Texas - the $32 million expansion project more than doubles the available training space.
Customer Experience
- The United mobile app was named the Best Airline App by Business Traveler USA at their Business Traveler Awards North America in the fourth quarter, making it the world's most downloaded airline app.
- Became the first airline to launch Live Activities for iPhone, giving customers real-time access to their boarding pass, gate and seat number, and countdown clock to departure time, hosting 65 million sessions in 2023.
- In the fourth quarter, United announced the largest overhaul since 2016 of United Polaris® - the airline's international business class - debuting new in-airport and onboard amenities from Therabody® and Saks Fifth Avenue that are designed to give customers "the best sleep in the sky."
- United launched WILMA in the fourth quarter, a new boarding process that enables a smoother and faster boarding process.
- Best fourth quarter CSAT in the company's history.2
- United was recognized in Forbes' first-ever best customer service list in the fourth quarter, which honored top brands for excelling in high-quality service.
- Throughout the year, saved 713,000 customer connections through Connection Saver, ensuring more customers made their flights.
- Became the first U.S. airline to add braille to aircraft interiors.
- Customers who were extremely likely to recommend United to family and friends increased by 4% year over year.
- Two thirds of United's travelers in 2023 used the mobile app to manage their day-of travel, from re-booking options, bag tracking information and hotel vouchers when eligible.
Operations
- During the last two weeks of December, United operated its busiest travel period in history, flying 8.2 million customers - an average of 483,000 each day.
- In the fourth quarter, the airline achieved its best-ever on-time performance2 for express and consolidated flying, and second-best quarter for mainline flying.
- The fourth quarter set the record for the lowest quarterly misconnect rate.2
- United carried the largest number of passengers ever in a year at 165 million, and achieved the highest seat factor ever for the year at 86.4%.
Network
- In the fourth quarter, United announced the largest international winter schedule expansion in the airline's history, with the addition of 50 daily flights and new routes between Denver and the Caribbean including San Juan and Montego Bay.
- United announced its largest-ever international summer 2024 schedule in the fourth quarter, including the first and only non-stop flight between Newark and Faro, Portugal and new flights to Reykjavik, Iceland; Brussels; Rome and Málaga, Spain and the introduction of service to nine of the airline's most popular seasonal routes up to two months early.
- Re-introduced daily service to China, resuming service to Beijing from San Francisco and increasing service to Shanghai to daily flights in the fourth quarter.
- Operated the largest-ever fourth quarter schedule by available seat miles from Denver in company history, serving more daily flights to more destinations from Denver than any other airline.
- Became the world's largest airline by available seat miles for the full year of 2023.
- Flew the largest domestic schedule in company history (by available seat miles, excluding Canada) for the full fiscal year with over 3,500 daily domestic flights.
- Flew the largest international schedule among U.S. carriers by available seat miles for the full fiscal year, 30% larger than the next largest carrier.
- Launched three new international destinations including Málaga, Spain; Dubai, United Arab Emirates and the only nonstop service from the U.S. to New Zealand's South Island with flights to Christchurch, New Zealand. Launched new international routes to existing destinations, including Barcelona, Spain; Rome; Shannon, Ireland; Auckland, New Zealand; Brisbane, Australia; San Juan, Puerto Rico; Montego Bay, Jamaica; Hong Kong; Tokyo and the first nonstop service between the continental U.S. and the Philippines by a U.S. airline with flights to Manila, Philippines. Additionally resumed service to Osaka, Japan; Managua, Nicaragua; Stockholm, Sweden and Beijing for the first time since the pandemic and added additional frequencies on routes to London; Edinburgh, United Kingdom; Paris; Naples, Italy; Delhi, India; Shanghai and Taipei.
- For the full fiscal year, United had the greatest increase in-seat capacity year over year compared to the four other largest U.S. carriers, and had the second largest increase in volume of scheduled departures year over year.
Communities
- United hosted Fantasy Flight events across 12 stations in the fourth quarter, where 770 employees volunteered to provide a unique event for children across the world, including Hawaiian residents impacted by wildfires, those terminally ill, or those suffering from serious medical conditions.
- United, alongside MileagePlus® members, donated more than 106 million miles to non-profit charities across the globe in 2023 via the Miles on a Mission℠ program.
- Welcomed nine new corporate participants to its Eco-Skies Alliance program, set up to contribute to the purchase of SAF. To date the program has invested in the future production of more than five billion gallons of SAF.
- United collaborated with Sesame Workshop to announce Oscar the Grouch as its first Chief Trash Officer as he and the airline celebrate his love of rubbish. The campaign is designed to promote the expected benefit of using SAF more broadly.
- In 2023, United received SAF-blended fuel deliveries at Amsterdam, Los Angeles, London Heathrow and San Francisco airports, representing two new airports where United has used a SAF blend.
- In 2023, approximately 5,600 employees volunteered over 59,000 hours at nonprofits organizations in communities around the world.
- During the year, United transported nearly 313 million pounds of cargo, including approximately 9.6 million pounds of medical shipments and 264,000 pounds of military shipments.
https://www.united.com/en/aw/newsroom/announcements/cision-125313
Virgin Atlantic
Virgin Atlantic, a trading name of Virgin Atlantic Airways Limited and Virgin Atlantic International Limited, is a British airline with its head office in Crawley, England.
About Us
Virgin Atlantic first took to the skies in 1984, instantly shaking things up and attracting plenty of attention. Richard Branson's enthusiasm and cheeky personality reflected the airline's promise: we don't do ordinary.
Since then, Virgin Atlantic have become the UK's second largest carrier, helping customers to fly and connect all around the world, with non-stop transatlantic routes including New York, Los Angeles, Hong Kong, Delhi, and Johannesburg. Plus, thanks to the joint venture with Delta, Air France, and KLM, over 350 cities across North America, Europe and the UK have now become accessible.
Today Virgin Atlantic's purpose is to embrace the human spirit and let it fly. This stems from our deeply rooted values - optimistic, inclusive, and adventurous. Abiding by these daily ensures we remain a 'Business for Good', helping to develop as innovators and providing customers with unique experiences.
Turning an ordinary like into an extraordinary love is one mission, with the other being 'Change is in the Air' - a new sustainability program, which sees Virgin Atlantic working with a number of charity partners and encouraging customers to offset their carbon.
https://www.virgin.com/virgin-companies/virgin-atlantic
26 March 2021
Virgin Atlantic Annual Report 2021
Chairperson's statement
2020 was Virgin Atlantic's 36th year of continuous operation and the most difficult in the company's history. Covid-19 ruined lives and devastated economies globally. Aviation has been one of the worst affected industries, and within aviation, the long- haul sector, of which VAA is part, has been the most damaged.
For more than 12 months now, we have been locked in a daily fight for survival. That we have come so far is due to the great qualities of leadership shown by our senior leadership team, led by Shai Weiss, to the unstinting and brave contributions of all our staff, and to the great support of our partners in business, who joined us in a successful and comprehensive solvent recapitalisation scheme in September last year. We are now planning on the basis of a phased exit to the pandemic in the second half of the year and a return to profitable operation in 2022.
There is much to celebrate in this prospect, but this celebration has to be tempered by our sorrow and great regret for the human cost of our fight for survival. Enormously hard decisions have had to be taken to reduce operations and therefore make permanent headcount reductions, in order to survive. We are a significantly diminished team as a result. Our thoughts are with those affected, and our great thanks are due to them for their loyal service.
At the end of February 2021, the UK Government published its roadmap to a progressive reopening of the economy and removal of social restrictions. This roadmap underpins our own plan to restart passenger services at scale in time for the second half of the year. However, much remains to be done in terms of planning to enable travel to resume fully. There are decisions to be taken about the requirements for Covid testing, passporting and certification.
Virgin Atlantic is completely focused on delivering a safe, secure and healthy environment for our staff and customers, and we have been working hard to assist Government in formulating practical and effective measures to deliver this. We will know more in April and May, after the Government's task force reports.
The 2020 financial year was a story of vastly reduced flying, prodigious losses, financial restructuring to preserve liquidity, and operational restructuring to reduce our establishment in order to meet the new market environment.
Passenger numbers and revenue fell by 80%. We carried 1.2 million passengers compared to nearly 6 million in the previous year. Passenger revenue was £446m compared to over £2bn in 2019. The only bright spot was the performance of our cargo operation which grew revenue by nearly 50% to £319m, a remarkable achievement in the circumstances.
Our response to the crisis involved consolidating flight operations at Heathrow and Manchester, reducing our fleet and streamlining all areas of the company, which sadly also included a 41% reduction in our workforce by the end of 2020.
The sudden and prolonged restrictions imposed on travel in March 2020 created enormous logistical difficulties for all passenger carriers, as literally millions of ticketed passengers sought to re-arrange or cancel flights in a short period of time, a contingency for which no operational plan existed.
We ourselves refunded 220,000 bookings with more than £600m between January and December. As was the case for all operators, we were not able to process the requests to the timescales normally in force, which we much regret.
However, we did catch up in the shortest time achievable, due to extraordinary efforts by the customer teams, and our procedures have been amended, to hopefully avoid a repetition of last year's problems.
The first half of 2021 is all about the continuing fight for survival, as most long-haul routes remain closed. We continue to husband resources and to preserve cash. Following the roadmap announcement on 22 February, we look forward to a second half year of resumed operations at scale. There is even the prospect, if the roadmap timetable is adhered to, of more substantial flight operations re-starting at the end of May.
The forecast that all UK adults aged over 18 will have been vaccinated by the end of July certainly underpins our optimism about reopening. Subject of course to that fundamental assumption, there are real grounds for optimism at
Virgin Atlantic.
We have shown great agility in re-shaping the airline's operations and transforming the cost base. In 2022, we will make further progress towards our ambition to be the most loved travel company, while being sustainably profitable.
On behalf of the whole Board and of our shareholders, I can safely say that the one truly bright aspect of an otherwise dreadful year in 2020 was the performance and commitment of our people. Whether in work or on furlough, all pulled together to support each other and the national effort to respond to Covid-19.
We worked with the Foreign and Commonwealth Office to repatriate UK citizens. We partnered with the Department of Health and the NHS to transport crucial medical supplies to the UK, including 7,000 tonnes of PPE, test kits and other medical supplies.
Whilst on furlough, more than 350 cabin crew volunteered to work at NHS Nightingale and other hospitals, the ambulance services and as NHS Volunteer Responders. Now, in the vaccination phase, our frontline staff with medical training are supporting the vaccine roll-out.
We also owe great thanks to all our partners in business, our suppliers and our financiers. The support they have given our efforts to get through the crisis has been outstanding. At Virgin Atlantic, a core objective is to be "best in partnering"; I believe that the deep trust evidenced by the support of all concerned in our restructuring last September is a testament to the value of our approach to business over the years.
2020 was a very difficult year for very many company boards, and ours was no exception. I thank all my Board colleagues for their great contribution. I also welcome Klaus Heinemann as independent Board Observer, on behalf of our creditors. Klaus has a wealth of aviation experience, having previously served as CEO of Aercap and as Chair of Finnair. During the year, Tom Mackay, our CFO, and Ian de Sousa, our Company Secretary of more than 20 years, stepped down. We give them our great thanks and very best wishes for the future.
In conclusion, on behalf of the Board and shareholders, I give our most profound thanks and appreciation to every employee of Virgin Atlantic. This has been the hardest year for very many of us and our families, and the spirit and dedication you have displayed is remarkable. Survival depended on it.
Through this dark period, the contribution of the leadership team and the inspiration they have given to us all has been amazing. Shai Weiss our CEO has epitomised the Virgin ethos. He has led by example and by sheer force of character and generosity of spirit, and Shai's efforts have been matched by his colleagues in leadership. We cannot thank you all enough. Let's all look forward to better times together, Covid-19 permitting.
CEO Review of 2020
The Covid-19 pandemic presents the biggest crisis since the Second World War, affecting public health, economies and communities globally. Aviation was one of the first industries to be affected and will be one of the last to fully recover. Despite facing the most challenging year in our 36-year history I am proud and humbled to have led Virgin Atlantic's response to the crisis.
Since February, we have been guided by the single mission of ensuring Virgin Atlantic's survival, so that we can continue to serve our people, customers and communities for decades to come. It was only achieved through a laser focus on reducing our costs, preserving cash and protecting as
many jobs as possible.
Undoubtedly the airline has undergone a transformation that no one could have predicted at the beginning of the year and it has come at a huge cost to many of our people, with nearly 1 in 2 jobs lost. But as demand for travel returns, which it will, it's our greatest hope that we will be able to welcome many of our amazing former colleagues back.
As we started 2020, we were on course to return to profitability, a year ahead of plan. This followed a foundational year in 2019, the first year of Velocity; a three-year plan to remove the impediments that prevented customers from flying with us and translating preference for our brand and service into purchase. Returning to profitable growth through an expanded network, improving corporate relevance and continuing to delight our customers with the best in class end to end journey experience, whilst keeping our cost discipline.
Our expanded joint venture with Delta and Air France KLM launched in January 2020, creating a $13bn transatlantic partnership of choice for millions of people and businesses. But as events began to unfold, on 1 February, when we took the decision to suspend our flights between London Heathrow and Shanghai, few could have predicted the scale of the global crisis that we would witness.
It is worth highlighting some of the key events in 2020 which have had a lasting impact on our Company.
The first business casualty of the crisis was our investment in Flybe, which entered administration on 5 March, despite the efforts of all involved to turn Europe's largest regional airline around. The impact of Covid-19 on Flybe's trading meant it was unable to secure a viable basis for its continuing operation. As a 30% shareholder in the Connect Airways consortium that acquired Flybe in January 2019, this was a devastating outcome. But with the impact of Covid-19 intensifying on airlines around the world, it was right to focus efforts on ensuring Virgin Atlantic was in the best possible position to weather the storm.
On 16 March the US closed its borders to the UK, already having closed them to Schengen countries. A year later and these restrictions remain. On the same day, the UK Government advised those who could work from home to do so. With the health, safety and security of our people and customers our number one priority, a large proportion of Virgin Atlantic's workforce has operated remotely since 17 March. With our place of work a plane and our unit of time a flight, many of our front- line teams continued to travel into work including our pilots, crew, engineers and those in operational or safety critical roles.
On the 23 March, the UK entered its first national lockdown, and, on the same day, we launched our first cargo only flight, bringing PPE from Shanghai, to support our NHS on the frontline. From 21 April, for a period of 90 days, Virgin Atlantic passenger flights were grounded, and our cargo operations became the primary revenue driver of the airline. The determination and resilience of our teams making this happen provided a much-needed lifeline.
Our vision remains to be the most loved travel company and a sustainability leader in our industry but the path to achieve it has changed. On 5 May we announced plans to reshape and resize Virgin Atlantic, including a planned reduction of 3,150 jobs across all functions.
We optimised the network and simplified the fleet through the early retirement of three Airbus A340s and seven Boeing 747s. We consolidated flying at London Heathrow and Manchester, with the ambition to rebuild at Gatwick as demand returns.
We announced plans for the Company to operate under a single brand, with Virgin Holidays becoming Virgin Atlantic Holidays, meaning that for the first time ever, all our revenue generating activities - airline, holidays and cargo - will be consolidated under single leadership to drive a 10x growth mindset when recovery begins.
Our actions in 2020 delivered more than £300m of cost reductions and reduces our fleet capex by £880m over the next five years, culminating in the completion of a privately funded, solvent recapitalisation of the airline on 4 September. Through a court sanctioned Restructuring Plan under the new Part 26A of the Companies Act 2006 and with the unanimous support of our shareholders and creditors, we delivered a refinancing package worth £1.2bn.
This included shareholder support of c.£600m over the life of the business plan to 2025, £170m of secured financing from Davidson Kempner Capital Management LP and more than £450m of support and deferrals from creditors. Again, this came with a devastating impact on our people as we announced a further reduction of 1,150 jobs.
During Q3 we saw a recovery in passenger flying, with industry leading measures in place for our people and customers through our innovative Fly Safe, Fly Well programme. Despite the amazing advancements in vaccine development, following a rise in Covid-19 cases in the UK, restrictive tiers were introduced in mid-October, followed by a second national lockdown from 5 November.
These were further tightened on 20 December, including a ban on non-essential travel. With tiered restrictions in force for much of the UK in Q4, our teams responded quickly, removing passenger flying and replacing it with cash contributing cargo operations.
2020 ended with the realization that recovery would take longer and that Virgin Atlantic, like the rest of the nation, would face further challenges through a tough winter. In December, at the same time many of us faced increased restrictions on our day to day lives, the UK approved the Pfizer/BioNTech and Oxford/ AstraZeneca vaccines. This reignited hope of a turning point in the fight against Covid-19 as we entered 2021.
Performance in 2020. A year like no other
We witnessed dramatic year on year declines in key performance metrics, with revenue and passenger numbers 80% below 2019. ASKs were 73% down on 2019 - driven by the reduction in passenger flying, smaller average fleet gauge and substantial cargo only flying. As a result, sectors did not fall as materially, reducing from 23.5k to 10.6k (or 45% of 2019 levels).
Agility in passenger operations. Our passenger flying programme in 2020 was subject to constant change in line with ever changing global travel restrictions. Throughout 2020 we pivoted passenger flying to serve VFR (visiting friends and relatives) and leisure markets, particularly the Caribbean, India and Nigeria.
In December, we launched three new services to Pakistan: London Heathrow to Lahore and Islamabad and Manchester to Islamabad. In November, we announced a new service from London Heathrow to St Vincent, launching in Summer 2021, making Virgin Atlantic the first European carrier to offer direct flights to St Vincent. With a strong heritage in premium leisure, we are well positioned to capitalize on leisure demand as travel at scale returns.
Record year for cargo. Against a volatile outlook for international travel, our cargo team has delivered a record performance. Utilizing our passenger configured Boeing 787s and Airbus A350s, they operated nearly 4,000 cargos only sectors, carried more than 7,000 tonnes of PPE and delivered £319m in revenues, a 49% increase on 2019 performance.
Although overall tonnage declined 32% from 227m in 2019 to 156m tonnes in 2020, contribution increased 148% to £261m due to improved yield. With our Pharma Secure product launched in Q4 and our state-of-the-art purpose-built cargo facility at London Heathrow, we expect growth to continue into 2021 and eventually support global distribution of vaccines.
Virgin Atlantic Holidays performance mirrored the airline. With UK restrictions on non-essential retail in place for much of 2020, the Virgin Holidays retail estate has remained largely closed since March. In May 2020, 7 of the Vroom stores closed permanently. Having started the year with 55 stores, we ended the year with 50 (36 Next concessions and 14 Vrooms). Revenue declined 85% to £96m (down from £627m), with customer numbers at 58,500, falling 85% on 2019. At a Group level, Virgin Holidays contributed £18.3m of flight revenue and £8.7m of hotel and ancillary margin.
Our customers. For our customers who did not take to the skies in 2020 due to cancellations caused by Covid-19, it was a challenging period and one where we did not live up to our brand promise. The huge volume of refund requests at the height of the pandemic, combined with constraints on our teams and systems during that period, lengthened our processing times. In 2020, our customer service teams dealt with more than 220,000 requests across our Airline and Holiday businesses and refunded over £600m.
Accordingly, our customer satisfaction scores as measured by Net Promoter Score (NPS) reflected the measures we put in place, increasing five points on 2019 from 46 to 51. 1 In December, we were awarded 2021 APEX 5* Global airline rating for the fourth year in a row, making us the only British airline to achieved this milestone. Maintaining this rating during the most challenging year in our history is testament to the efforts of our teams on the ground and in the air, to delight our customers every single day. We are especially honoured to have been awarded the Diamond status by APEX Health & Safety powered by SimpliFlying for our comprehensive set of multi-layered measures offering the highest standards of health protection.
Survival, love, profitability
As global economies emerge from Covid-19, Virgin Atlantic has a vital role to play in the UK's economic recovery and a future Global Britain. Supporting vaccine distribution, global supply chains and safely flying our customers to the places they love to travel as soon as they are ready to take to the skies. The only way for Virgin Atlantic to survive 2020, was to resize and reshape so that we can emerge as a sustainably profitable airline from 2022. We went further than most. In 2021, achieving our vision to become the most loved travel company, is anchored on three critical missions: survival, love, profitability.
Survival. Throughout this crisis we have been an industry first mover. The actions taken in 2020 to reduce costs, preserve cash and operate cash positive flying have given us a runway into the summer. With the earliest date for the resumption of international travel at scale now 17 May, we have taken further steps to bolster our cash position. On 15 March 2021 we agreed further financial support from our shareholders and creditors, to the tune of £160m and we remain confident in Virgin Atlantic's survival.
Love. In 2021, we must get back to our best for our people and customers. Rebuilding trust and confidence in our brand and reassuring our customers to fly safe, fly well.
Profitability. The impact of Covid-19 on global aviation will be felt for many years to come, with demand unlikely to return to 2019 levels before 2023. Yet, for Virgin Atlantic, the outlook is transformative. A 10x mindset to revenue growth underpins our commercial plan to regrow revenues to 2019 levels by 2023.
Powered by technology transformation, digital first retailing and a right to win in a leisure led recovery. By 2022 we expect to fly more sectors than in 2019 with efficiencies across our fleet, network and non-fuel costs delivering more than £200m of recurring fixed cost improvement.
In February 2021 Virgin Red launched a true lifestyle loyalty programme in the UK which, alongside the strength of our transatlantic joint venture with Delta and Air-France KLM, expands our network reach and improves corporate relevance.
Becoming most loved
Our vision to become the most loved travel company comes with great responsibility and goes beyond providing best in class service to our customers. As an airline we bring huge social and economic benefits to the economies and societies we serve. The need to go further, to serve our people, the planet on which we all live and the communities in which we operate, is unabated by the pandemic.
Our people remain our secret sauce and the thing that sets us apart. For our crew and pilots, we have put in place an innovative holding pool structure for 1,780 colleagues. This means that as demand returns and we scale up our flying programme, we are able to welcome back as many of our people as possible. The desire to see them back with us keeps us going.
In 2019, we launched our Passport to Change programme working with local schools in our community to promote studies in Science, Technology, Engineering and Maths (STEM). In 2020, following events related to the WE Charity in Canada, we mutually agreed to terminate our partnership.
In 2021, we will be relaunching our Passport to Change programme. With over 100 active volunteers at Virgin Atlantic and many more who have registered their interest, we know our people are passionate about improving the opportunities for all our communities.
In 2020, we continued on our path to become a sustainability leader, becoming a signatory of Sustainable Aviation's commitment to Net Zero by 2050. In July we also became a member of the Jet Zero Council, a dynamic partnership between the UK Government and industry focused on developing UK capabilities to deliver net zero emission commercial flying through the acceleration of sustainable aviation fuel and supporting zero emission aircraft R&D.
Over the last 14 years, we have transitioned to a cleaner, greener, twin-engined fleet; reducing our CO2/RTK by 18% between 2007-2019. In 2020 we retired the last of our four- engine aircraft and our current, simplified fleet is forecast to be 10% more fuel and carbon efficient per km flown when compared to our fleet profile in 2019. In 2021, we will renew our focus and energy on industry thought leadership and innovation to achieve meaningful change in the years ahead.
A big red thank you
2020 has been a year like no other and devastating for so many. Without a doubt, it has been the toughest year in Virgin Atlantic's 36-year history. Yet, for all its hardship, 2020 has produced some exceptional moments to be proud of. In many ways we have made the impossible, possible. I have been inspired by amazing people of Virgin Atlantic. By their heroic efforts, extraordinary commitment to our survival, our customers and each other. A special thank you to my leadership team, our partners and shareholders for their unwavering belief, determination, and camaraderie.
Our purpose has never been more relevant - everyone can take on the world. We are facing up to the challenge, and as a team we will continue do whatever it takes to ensure our airline keeps proudly flying.
CFO Review of 2020
Our financial results for 2020 are a stark reflection of the immense challenges that the airline industry has faced from the COVID-19 pandemic. IATA predicts the airline industry to lose $118bn in 2020 with global passenger demand down by 66%. Demand across the transatlantic, which made up 70% of Virgin Atlantic's capacity in 2019, is estimated to have been down by 77%.1
The year had started on plan with January and February in line with targets. From March onwards the pandemic had a dramatic impact on passenger operations. The closure of US borders combined with the UK entering its first lockdown in March led to the temporary cessation of passenger flying from 21 April to 20 July. Q2 ASKs fell to 0.2bn, a drop of 99% on the prior year. Despite passenger flying recommencing in July, ASKs for the second half of 2020 dopped by 87% vs 2019 as demand for international travel remained highly constrained due to travel and border restrictions. Full year passenger revenue fell to £446m, 80% lower than the prior year and passenger numbers fell to 1.2m, 80% lower than the prior year.
Despite the challenging passenger demand environment our Cargo business thrived and played a vital role in bringing critical medical supplies to the UK. Cargo revenue grew to £319m, up 49% on the prior year. Total revenue fell 70% on the prior year to £868m.
The scale of revenue reduction and speed at which it occurred forced an immediate shift in priority during February to preserving liquidity. Throughout the year this was achieved through: (1) Disciplined capacity management ensuring only flights contributing positively to cash were flown, (2) Reducing fixed costs and capital expenditure through taking bold and decisive actions to reshape and resize Virgin Atlantic, and (3) Reducing cash burn and raising new capital through the privately funded, solvent recapitalisation of Virgin Atlantic. Together these actions helped reduce overall costs, before exceptional items, by £1,473m to £1,382m and raise £370m of new financing, drawn in September. The 80% reduction in passengers drove an unprecedented increase in customer refunds with more than £600m of refunds processed during the year.
Overall, this resulted in an operating loss before exceptional items of £514m, £586m worse than 2019, and a statutory loss before tax of £858m, £794m worse than 2019.
At 31 December 2020, the Group's financing consisted of total cash balances of £191m (including unrestricted cash of £115m) compared to £449m at the end of 2019. After the year end and during Q1 2021 further financing has been secured leading to c.£200m of additional cash support for the business throughout 2021. This comprises proceeds from a sale & leaseback in January of two Boeing 787s and further support from our largest creditors, underpinned by £97m of further shareholder support.
Resizing and reshaping Virgin Atlantic
Significant action was taken throughout 2020 to reduce the cost base and position Virgin Atlantic to become sustainably profitable once passenger demand recovers. Actions reduced operating costs by more than £300m and include over £200m of recurring fixed cost savings. The key actions taken comprised:
- Consolidated network: Consolidation of flying at London Heathrow and Manchester while retaining the flexibility to restart Gatwick operations as passenger demand returns. As well as reducing costs this will improve Heathrow slot and aircraft utilisation, improving future profitability.
- Simplified fleet: As part of a rationalisation of the fleet we retired all our 4-engined aircraft and brought forward the retirement of an A330-200. This reduced our fleet from 45 to 37 aircraft, through the retirement of 7 Boeing 747-400s and 3 Airbus A340-600s and the arrival of 3 more fuel efficient A350-1000s. Looking forward we will operate one of the youngest and most fuel-efficient long-haul fleets in the sky.
- Reduced headcount: Over the course of the year, we reduced our total headcount by 41% to 5,907 at year end, while retaining a holding pool structure for nearly 1,800 pilots and crew in preparation for the resumption of significant flying activity anticipated in mid-2021. Headcount reductions were felt across the company with non-customer facing and management headcount reduced by 30%.
- One brand focus: The planned unification of Virgin Holidays under one master brand as Virgin Atlantic Holidays will deliver an aligned brand to customers and enabled efficiencies across marketing and operations; and
- Crew productivity: We negotiated ground-breaking agreements with our pilot and crew unions providing the foundation for enhanced operational stability and productivity.
Privately funded, solvent recapitalisation
The completion of the privately funded, solvent recapitalisation of the airline on 4 September delivered a refinancing package worth £1.2bn with a further £880m reduction to fleet capital expenditure. The key elements comprised:
- Shareholder support of c.£600m over 2020-25, including a £200m investment from Virgin Group and c.£400m of deferred shareholder payments;
- £170m of secured financing from Davidson Kempner Capital Management LP, a global institutional investment management firm; and
- More than £450m of additional deferrals from our largest creditors alongside the support of our credit card acquirers (Merchant Service Providers).
Refunding our customers
The customer refund situation in the early summer was unprecedented, with our customer teams receiving over 10,000 queries per day, and refund requests reaching 10 times the level experienced at any time before the pandemic. Our response was to massively increase the team to over 240 people in 8 countries, as well as offer a market-leading flexibility and incentives programme, which saw over 40% of airline customers choosing to rebook on to future flights. We processed more than £600m in cash refunds relating to over 220,000 claims.
Financial results & Key metrics
£m Revenue
EBITDA1 EBIT1 PBTEI2
EBIT margin (%)1
Loss for the year
2019
2,927
340
74
(22)
3
(55)
Total sectors Cargo only sectors ASK (km bn) Passengers (000) Load factor (%)
PRASK (p)
23,551
0
48.83
5,877
81.1
4.27
10,601
3,897
13.04
1,192
61.1
3.18
868
(260)
(511)
(659)
(59)
(864)
2020
Passenger revenue
Passenger revenue declined 80% to £446m from £2.2bn in the prior year, driven by passenger numbers falling 80%. The revenue decline followed the temporary cessation of passenger services on 21 April. Passenger services restarted 90 days later on 20 July, and July to October saw gradual month on month growth in passenger flying. The UK lockdown in November and tightening of travel restrictions during December saw passenger flying reduce again. Despite the reduction in passenger demand three new routes were successfully launched in December from London and Manchester to Pakistan.
Passenger reductions were seen across the network with UK-US routes down 83% and UK - Non-US routes down 72%. UK- Caribbean routes saw strong demand in the autumn between the periods of UK lockdown however passengers were down 70% for the full year.
Cargo revenue
Our Cargo operations were the standout performer of the year, with revenues up 49% to £319m. The revenue performance reflected a significant shortage in capacity within the global air-cargo market. As the no.2 cargo operator from London Heathrow, we were able to service a broad range of customers with scheduled cargo-only flights on key existing routes such as Shanghai, Hong Kong and our US destinations.
We also added new routes including short haul destinations in Norway and Belgium. Our pharmaceutical capabilities were enhanced with the launch of Pharma Secure, a new product designed specifically to cater for the growth in vaccine distribution.
Unit price metrics rose on average by 130%, and freight charter flights made up 20% of our cargo operations. Although overall traffic declined 25% on the prior year due to a significant decline in belly capacity on passenger flights, traffic per sector increased significantly to 14 tonnes.
Virgin Holidays
Virgin Holidays revenue fell 85% to £96m reflecting the restrictions on non-essential travel present for much of 2020. With Holiday departures declining 80%, holiday distribution, marketing and selling costs were similarly reduced, and the operations were streamlined as part of the single brand unification programme, with Virgin Holidays due to become Virgin Atlantic Holidays. The retail store network was also reduced by 5 stores as part of the restructuring and totalled 50 stores at year end.
Fuel costs
Physical fuel costs of £185m were down £502m, reflecting the significant reduction in sectors flown and the retirement of our 4-engined aircraft. Throughout 2020 the operation focused on flying fuel-efficient Airbus A350 and Boeing 787 fleets to minimise fuel costs and maximise cash contribution on cargo and passenger flights.
A charge of £105m relating to the closing of out-of-the-money fuel price protection hedges, put in place in 2019 to cover expected levels of 2020 flying, was partially offset by foreign exchange and unrealised fair value movements; the net £81m charge (2019: £37m credit) was recognised in exceptional items in the income statement, consistent with our usual accounting policies.
Aircraft costs
Aircraft and engineering costs together totalled £258m, £91m lower than the prior year. Aircraft costs fell £15m to £158m due to the reduction in the size of our fleet. Engineering and maintenance costs of £100m were significantly lower than the prior year, reflecting both reduced flying hours and the retirement of the oldest aircraft in our fleet.
Other non-fuel costs
Non-fuel, non-aircraft costs of £835m, were 54% lower than the prior year. Within this, employee remuneration of £277m was £145m lower than the prior year, reflecting the in-year savings from our restructuring programme which saw headcount at 31 December of 5,907 compared to 10,016 at the beginning of the year. It also reflects employee participation in the UK Government's Coronavirus Job Retention Scheme (CJRS) of £70m. The reduction in other operating and overhead costs of £149m vs £176m in 2019 reflect the in-year actions on our fixed costs such as indirect staff costs and volume-based reductions in operating costs.
Finance costs
Net finance costs of £148m were £52m higher than in 2019. This was mainly driven by a £27m increase in finance lease interest and £12m increase in interest payable on external debt.
Result for the year
The statutory loss after tax for the year was £864m, £809m less than 2019. EBITDA loss for the year was £260m, £600m lower than the prior year, and EBIT loss for the year was £511m, £585m below 2019.
The reported Group loss before tax, equity-accounted investees, exceptional items and fair value movements totalled
£659m, compared to a £22m loss in 2019, together with an exceptional charge of £189m (2019: £32m charge). These are made up of £78m of Covid-related exceptional costs and £111m of other exceptional costs. These include £7.8m relating to the write down of loans made early in the year to Flybe including an offset for post-administration recoveries.
Balance sheet, cash flow and financing
|
£m |
2020 |
2019 |
|
Cash from operating activities |
(713) |
217 |
|
Cash used in investing activities |
(23) |
(558) |
|
Cash from financing activities |
472 |
317 |
|
Cash decrease |
(272) |
(25) |
|
Effects of exchange rate differences |
15 |
(15) |
|
Unrestricted cash |
115 |
353 |
|
Total cash |
191 |
449 |
|
Debt |
(2,479) |
(2,215) |
|
Net debt |
(2,287) |
(1,766) |
|
Net (liabilities) |
(576) |
(190) |
Adjusted balance sheet metrics
|
£m |
2020 |
2019 |
|
Reported net (liabilities) |
(576) |
(190) |
|
Slot portfolio valuation (fair value, less cost) |
423 |
350 |
|
Adjusted net (liabilities)/assets |
(153) |
160 |
|
Reported free cash |
115 |
353 |
|
Unremitted cash |
13 |
70 |
|
Adjusted free cash |
128 |
423 |
Cash at the end of the year totaled £191m vs £449m in 2019, including £77m (2019: £97m) of restricted cash, but excluded £14m of unremitted cash which is recognized within our receivable's balances. The decrease reflected the significant cash outflow resulting from refunds and operating activities of £716m, partially offset by new borrowings of £591m. Cash from operating activities was an outflow of £713m and was driven by the £260m EBITDA loss and refunds.
Net cash used in investing activities of £23m reflects the success of the strong cash control measures put in place early in the year, together with the proceeds of the disposal of our Crawley- based facility, The Base. Within the fleet, we acquired an additional A350, while a further 2 A350s joined the fleet
under leasing contracts.
Cash inflow from actions taken in the year totaled £456m relating principally to new borrowings of £591m from the recapitalization programme described earlier, offset by £100m of repayments, principally relating to aircraft leases.
Movements within the balance sheet principally reflect the various actions undertaken as part of our solvent recapitalization.
Shareholder payment deferrals over the period 2020 to 2025 were recognized through a £376m preference share issuance and are reflected in the capitalization of intangible assets relating to contracts. The increase in long term payables is also a result of revised repayment terms on contracts with both shareholders and with lessors.
Long-term borrowings rose as a result of the recapitalization and deferral of items previously classified as short-term borrowings, including the conversion of the existing RCF to a term loan. Deferred revenue fell, reflecting lower flying activity and reduced future bookings due to the continued uncertainty over Covid restrictions on international travel later in the year. A portion of our long-term borrowings are secured against our UK slot portfolio which had a year-end market value in excess of £500m.
Outlook
With the recently announced path to exit UK lockdown restrictions, there is a roadmap to recovery and to the recommencement of international passenger flying at scale. Factors such as the emergence of new variants of the Covid-19 virus and the risk of a third wave of infections continue to create significant uncertainties and Virgin Atlantic is not able to provide certainty that there will not be a more severe downside recovery scenario.
In the event that such a scenario was to occur, Virgin Atlantic would need to take further actions and would likely need to secure additional funding beyond what has been achieved to date, however certainty that it will be able to achieve further funding cannot be provided. Please see note 3 'Basis of preparation' for more information.
While material uncertainties remain as to the timing and shape of recovery, the actions taken in 2020 to reshape and resize Virgin Atlantic have positioned the airline to capitalize on the recovery when it takes hold. The discipline and focus on cost and liquidity management will continue, to help ensure Virgin Atlantic's survival and return to profitability.
Key performance indicators
The directors have outlined below the key performance indicators that they rely on to manage the business. These key metrics focus on volume, efficiency and cost performance within our business operations. The financial indicators are stated at constant currency.
Virgin Atlantic
|
2018 2019 |
2020 |
YoY |
|
Passenger numbers (m) 5.5 5.9 |
1.2 |
-80% |
A key volume measure used to assess volume growth and relative market share. Calculated as the total number of passengers who flew on Virgin Atlantic Aircraft.
|
2018 2019 |
2020 |
YoY |
|
ASK (km m) 47,747 48,832 |
13,043 |
-73% |
An industry standard measure of passenger carrying capacity. Calculated as the number of available seats in each flown sector multiplied by the sector distance in km.
|
2018 2019 |
2020 |
YoY |
|
PRASK (p) 4.12 4.27 |
3.18 |
-26% |
An industry measure of operational efficiency that encompasses both passenger yield and load factor performance. Calculated as the total passenger revenue divided by total ASKs.
|
2018 2019 |
2020 |
YoY |
|
Fuel CASK (p) 1.45 1.44 |
2.22 |
+54% |
A key fuel metric, Fuel CASK (p) measures our unit fuel spend and assesses our aircraft fuel efficiency and fuel hedging effectiveness. Calculated as the total fuel spend divided by total ASKs.
|
2018 2019 |
2020 |
YoY |
|
Non-fuel CASK (p) 3.49 3.39 |
7.72 |
+128% |
Our key volume-adjusted operational cost metric that indicates our cost control performance excluding fuel. Calculated as the total operational costs and overheads (ex-financing costs) divided by total ASKs.
Virgin Holidays
|
2018 2019 |
2020 |
YoY |
|
Total customers ('000) 397 390 |
59 |
-85% |
A key measure of volume and activity which drives holiday revenues. Calculated as the total number of customers served in the year, across all holiday types.
|
2018 2019 |
2020 |
YoY |
|
Contribution (£m) 5.8 5.5 |
(39.2) |
n/a |
This represents the operating margin achieved by the Holiday business from its travel and package holiday operations.
Calculated as the profit before tax and exceptional items (PBTEI) contribution.
Virgin Atlantic Cargo
|
2018 2019 |
2020 |
YoY |
|
Tonnage (m) 244 227 |
156 |
-31% |
Utilisation of bellyhold cargo capacity helps drive overall profitability of the airline. Calculated as the revenue generating chargeable weight carried on VA Cargo's network measured in kg
|
2018 2019 |
2020 |
YoY |
|
Yield (£/kg) 0.92 0.94 |
2.05 |
+118% |
Used to measure revenue performance (£) per kilogram carried on VA Cargo's network. It's a measure of pricing execution that has a direct impact on the overall profitability of the business.
Our business models
Virgin Atlantic Limited comprises three principal lines of business: Virgin Atlantic Airlines, Virgin Atlantic Cargo and Virgin Holidays.
Virgin Atlantic Airlines uses a mixed fleet of Airbus and Boeing aircraft to carry passengers to destinations across North America, the Caribbean, Africa, the Middle East and Asia from its main bases in London and Manchester, with award winning clubhouses at 7 airports.
Virgin Atlantic Cargo trades and retails the belly hold capacity of Virgin Atlantic's cargo-friendly fleet, connecting manufacturers, growers, retailers and consumers across the globe. It has the ability to transport specialist and time-critical cargo ranging from the most temperature-sensitive pharmaceuticals and fresh produce to a beloved family pet.
Virgin Holidays offers predominantly package holidays to destinations worldwide for customers principally in the UK. It has significant market positions in holidays to major US destinations including Florida and to the Eastern Caribbean. The business offers holidays through online, call centres and retail stores across the UK. Over 90% of Virgin Holidays customers also fly on Virgin Atlantic planes.
For the full report, see:
https://corporate.virginatlantic.com/content/dam/corporate/Virgin%20Atlantic%20Annual%20Report%202020_final%20v1.pdf
Virgin Australia
Virgin Australia, the trading name of Virgin Australia Airlines Pty Ltd, is an Australian-based airline. On 21 April 2020, Virgin Australia Holdings went into voluntary administration, due to the impacts of the COVID-19 pandemic and financial troubles in the years leading up to the pandemic. On 26 June 2020, it was announced that Bain Capital had entered into a sale and implementation deed with administrator Deloitte to acquire Virgin Australia. Creditors agreed to this proposal on 4 September 2020, with the reorganisation and change of ownership completed on 17 November 2020.
Company Overview
In 2000, the Virgin brand entered the Australian aviation market for the first time, bringing real competition in the leisure sector of the market. Launching the new brand Virgin Australia in May 2011, and the Game Change program announced by CEO John Borghetti, was a key part of repositioning ourselves in the market to be Australia's airline of choice.
Now Virgin Australia have a new vision: to revolutionise air travel again, this time across all market segments. We will do this by providing a seamless experience across all international and domestic markets, while retaining the same excellent service.
https://www.virginaustralia.com/uk/en/about-us/
ACQ_REF: IS/43135/20240429/XXX/0/47
ACQ_AUTHOR: Associate/Emillia Edwin
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