UTair Group cuts losses by nearly two-thirds

Russia's fourth largest airline's efforts to improve its financial and operational performance, are proving efficient (Photo by UTair)

The UTair Group, (includes passenger airline of the same name, a helicopter operator and several subsidiaries), managed to cut its net losses by 61.3% in the first half of 2016. According to international accounting standards, the group’s net loss figure for the first six months of 2016 was at 684.9 million rubles ($10.498 million), a dramatic improvement from last year’s 1.773 billion rubles ($27.176 million) for the same period.

The operating profit for the Khanty-Mansiysk, Western Siberia-based group stood at 1.702 billion rubles ($26.087 million), which is a 43.7% decrease YOY from 2015, when the group’s profit reached 3.026 billion rubles ($46.381 million). UTair no less managed to increase its revenue from passenger and helicopter services by 16.7%, from 28.473 billion ($436.421 million) to 33.224 billion rubles ($509.243 million), and overall, revenue in the group increased 13.6% year-on-year, from 29.684 billion ($454.983 million) to 33.706 billion rubles ($516.63 million).

In the group, revenue increased in both the regular as well as the charter flight segments. UTair also witnessed positive development in its helicopter maintenance (in Russia), MRO, and airport maintenance divisions. Revenue decreased from foreign helicopter operations and services offered by contract with the UN.

The group’s operating costs for airport services increased by about 150%, from 2.957 billion ($45.324 million) to 4.754 billion rubles ($72.867 million). On the other hand, the operating costs for leasing of aircraft and equipment decreased 14.4% YOY, from 3.295 billion rubles (50.504 million) last year to 2.822 billion ($43.254 million) this year. In total, the direct operating costs increased 17%, to 17.142 billion rubles ($262.745 million).

UTair’s long-term liabilities totaled 75.702 billion rubles ($1.160 billion), down 4.5% from last year’s 79.254 billion ($1.215 billion), while the group’s short-term liabilities increased 13%, from 27.385 billion ($419.745 million) to 30.9 billion rubles ($473.621 million).

UTair’s main activities include passenger and freight transportation, including helicopter operations. The carrier has over 440 aircraft in its fleet. The group is currently working to improve its fleet efficiency through revenue increases and cost reduction. The group also plans to complete restructuring of its leasing portfolio.

The group recently released its financial results for the first half of 2016, as based on Russian accounting standards. UTair managed to cut its net loss almost two times.

The carrier continues to increase its passenger numbers. In the first half of this year, this number increased 13.8%, to 3.569 million passengers, which makes UTair number 4 in the ranking of Russian airlines.