Russia’s Utair suffers 1.9 billion rouble loss so far in 2018

Utair Utair has 65 western-built jets in its fleet (Utair)

Utair, Russia’s fifth largest passenger airline, posted net losses of 1.914 billion roubles (US$29 million) in the first nine months of the year, according to the airline’s Russian Accounting Standards financial report. The negative result contrasts with the 1.591 billion roubles profit posted for the same period in 2017, but the second quarter of this year saw the airline dive heavily into the red, with a deficit of 3.815 billion roubles.

In the three-quarter period Utair, which is majority owned by Russian oil and gas giant Surgutneftegaz, generated 45.4 billion roubles (US$700 million) of revenue, up five per cent year-on-year. The airline attributes this increase to a five per cent growth in passenger traffic (11 per cent up on international routes, and a four per cent improvement in the domestic segment), totalling 5.8 million passengers. At the same time, the seat load factor climbed 4.6 percentage points to 80.1 per cent.

Although the gross losses the airline faced in the first half of this year have been reduced by three billion roubles, the small gross profit of 23 million roubles resulted from improved operational efficiencies, the airline says.

In the period, the airline’s long-term obligations climbed to almost 86 billion roubles from 84.4 billion roubles at the end of last year. The short-term commitments rose to 10.4 billion roubles from ten billion.

At the end of 2017, Utair, one of Russia’s top-five carriers by passenger traffic, enjoyed a net profit of 101.1 million roubles, which was almost 11 times less than for the previous year. Revenues declined by 3.2 per cent to 55 billion roubles.

In August, Utair’s president Pavel Permyakov warned about the airline’s imminent losses in 2018, which he forecast at up to several hundred million roubles and attributed largely to spiking fuel costs, the weakening national currency and increased pilots wages. However, he assured, the result has been foreseen by the operator’s financial model and “is within acceptable limits.”

Russian airline is planning to start deliveries of its order of 30 Boeing 737MAX-8 aircraft in April 2019.

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