Aeroflot Group’s Q1 financial results exceed historic seasonal levels

:: Aeroflot

Despite a spike in costs, external challenges and restrictions, Aeroflot Group (made of Aeroflot, Rossiya and Pobeda airlines) showed positive operational margins and overall financial results exceeding the historic levels for the January-March season, according to the group’s first quarter of 2025 consolidated financial statement in line with International Financial Reporting Standards (IFRS).

“Aeroflot has started the year 2025 with strong results for the first quarter, which is traditionally a low season,” Andrey Chikhanchin, first deputy general director for commerce and finance commented.

OPERATIONAL PERFORMANCE

The operational performance dynamics is the growth driver for the group’s financial results. In line with its targets set for the year, the group is maintaining the operational performance levels achieved through intensive growth in 2024. In the first three months of 2025 the group’s airlines carried collectively 11.6 million passengers, up 0.8 per cent on the same period of 2024. The domestic traffic grew 0.2 per cent to 8.7 million passengers, while international segment improved by 2.9 per cent reaching 3.0 million passengers. The seat load factor has remained high at 88.1 per cent. The RSK increased by 2.2 per cent, ASK – by 2.5 per cent.

The overall results were partially affected by the reduction of the number of days designated as state holidays and extended week-ends in February and March, which meant less peaks of demand for air travel, which traditionally contribute to performance and financial results. Compared to the previous leap year base, the traffic for February was reduced due to just one day less, whereas the remaining days the traffic was up to the same levels.

REVENUES

The Q1 revenues increased by 9.6 per cent year-on-year to 190.2 billion roubles boosted by traffic growth and revenue rates. Revenue from scheduled passenger service increased by 10.8 per cent to 177.3 billion roubles, whereas revenues from cargo operations improved by 11 per cent to 7.6 billion roubles.

OPERATIONAL COSTS

In Q1 the group faced a number of new challenges – both anticipated and unexpected. Operational costs rose 14.9 per cent Y-on-Y to 197.3 billion roubles due to the rise in supply chain costs and 2.5 per cent increase of capacities, as well as expansion of the flight program. Costs increased across major cost items, including passenger handling, airport fees, labor and aircraft maintenance. Fuel costs increased by 6.2 per cent compared to the same period last year reaching 69.9 billion roubles. The price of one ton of kerosene increased by 2.6 per cent, while the fuel buffer decreased by rouble strengthening which drove down the kerosene export prices.

The aircraft and passenger handling costs increased 17.7 per cent Y-on-Y to 40.3 billion roubles. The increase is caused largely by rise of airport fees, especially at those airports, which have recently completed the reconstruction.

Depreciation expenses increased by 5.0 per cent to 29.9 billion roubles due to cease of insurance settlements, which dampened the depreciation in 2024.

Labor costs rose 33.8 per cent to 28.4 billion roubles driven by the group’s initiatives to improve the staff working conditions – since last autumn, the pilots’ salaries were increased, followed by cabin crews and engineering staff in Q1.

Aircraft maintenance costs increased by 37.8 per cent to 13.2 billion roubles due to rise of component prices as well as 3.8 per cent increase in flight hours. Notably, the maintenance costs stabilized compared to Q4 2024.

The EBITDA at 49.0 billion roubles showed a decline compared to Q1 20224 due to increased airport fees, labor and maintenance costs. The same indicator adjusted for currency revaluation for operational costs was 36.6 billion roubles.

NON-OPERATIONAL REVENUES AND LOSSES

Aeroflot’s made net profits of 26.9 billion roubles in Q1 compared to 1.1 billion roubles for the same period of last year. The result includes the effect of positive currency revaluation of 27.3 billion roubles as well as other effects amounting to 3.0 billion roubles.

The adjusted net loss for Q1 was 3.4 billion roubles against the adjusted profits of 6.5 billion roubles in Q1 2024. The currency factor proved significant for consolidated financial results, albeit less than for the previously published report according to Russian accounting standards.

LEVERAGE

The amount of cash and short-term financial investments increased by 1.7 per cent compared to December 31, 2024 to 107.2 billion roubles.

Net debt on March 31 2025 amounted to 512.1 billion roubles, which is 14.4 per cent lower than on December 31. 2024.

Aeroflot Group was awarded ruAA credit rating with stable forecast by Expert RA and AKRA agencies.