Aeroflot’s revenue grew 30% in 2015

Aeroflot is better off as a state-run airline (Photo by Leonid Faerberg / transport-photo.com)

Aeroflot Group registered a total income of 415.17 million rubles (5.6 million dollars) in 2015, an increase of nearly 30% over the previous year’s income. The company experienced a four-fold increase of operational profits, with 2015 profits at 44.1 million rubles (almost 600 thousand dollars), according to an audited financial statement published today. Despite an increase in profitability, the group’s year-end result stands at a net loss of 6.5 million rubles.

Key financial highlights (source: Aeroflot Group)

Regular passenger flights generated the largest share of Aeroflot’s revenues—343.43 million rubles, a 35.4% YOY increase. By contrast, revenues fell sharply in the charter flights sector, decreasing 59.1% to 6.14 million rubles. The airline’s strategy of decreasing its presence in the charter segment and tourist market dynamics are to blame for the sharp decrease in charter flights, a spokesperson from the Aeroflot Group explained. Cargo revenues in 2015 grew 10.5% to 9.63 million rubles.

Revenue (source: Aeroflot Group)

Aeroflot’s deputy general director of finance, network and revenue management, Shamil Kurmashov, explained that the Aeroflot Group has taken heavy blows from the unfavorable economic situation, affecting the group’s results. “We took a number of measures to optimize our fleet and cut costs, which has enabled the group to curb the growth of operational expenses, despite the significant devaluation of the national currency,” said Kurmashov.

Aircraft maintenance and passenger service costs were most affected by the weakening ruble, the group reports. These costs increased to 75.19 million rubles, up 23.1%. Operational lease costs increased over 86%, while MRO rose 66.7%.

The operational lease expenses are nominated almost entirely in dollars, the report states. Their growth is explained by the exchange course fluctuations as well as fleet expansion by 9 new aircraft in 2015. LIBOR rate growth was another factor. In general, the operating costs, excluding fuel costs, grew 25% to 276.68 million rubles.

In addition those incurred expenses, the group’s financial results were affected by expenses associated with carrying extra passengers after Transaero’s bankruptcy in October 2015, Aeroflot noted, estimating these expenses at 17 billion rubles.

Operating costs (source: Aeroflot Group)

In 2015, the Aeroflot Group, which includes Aeroflot, Rossiya, Donavia, OrenAir, Aurora and Pobeda, carried 39.4 million passengers, up 13.4% from the previous year.

Key operating highlights (source: Aeroflot Group)