UTair reports Q1 net loss
Russian airline UTair Aviation has reported a net loss of 2.945 billion rubles ($53.09 million) for Q1 2017, or 2.1 times up year-on-year. The carrier’s report reads that the loss is a result of both low demand during the winter months and increased competition, which has led to a decrease in air fares.
UTair has been accumulating outstanding losses since 2014; as on March 31, 2017, the sum stood at 40.994 billion rubles, an increase of 2.3% year-on-year. The carrier blames the ruble’s depreciation, which it says resulted in higher expenses denominated in foreign currencies (such as leasing, fuel, and maintenance payments) and also a drop in passenger numbers on international flights.
The airline’s revenue for Q1 2017 reached 9.68 billion rubles, a decrease of 1.1% year-on-year. Income from transporting passengers grew 12.8% to 8.562 billion rubles. During that period, UTair’s passenger traffic increased 21.3%.
Yields generated by carrier’s helicopter sector decreased 58% to 726.9 million rubles. This was because of UTair’s continuing work to transfer the rotary-wing business to its subsidiary UTair Helicopter Services.
According to a UTair spokesperson, the Russian passenger aviation market is currently recovering from the worst phase of the crisis but stagnation will continue because of a growth in carrying capacity. Nevertheless, the airline is confident that it will reach its traffic target.
The carrier was placed in a high-risk group in 2014 because of its rapidly growing debts. It reacted by phasing out about one half of its fleet and introducing a more efficient business plan. The carrier also received subsidies from the government.
The airline’s 2016 performance indicates that it was able to overcome its unprofitability problems: UTair’s net profit amounted to 589.7 million rubles in accordance with the Russian accounting standards.
UTair is Russia’s fourth largest airline for passenger traffic. It carrier 6.654 million passengers in 2016, a year-on-year increase of 20.1%.
Russian Aviation Insider
Powered by Air Transport Observer, Russia & CIS’ premier information provider on commercial aviation with a 20-year legacy, Russian Aviation Insider provides you with timely and reliable business news, insights and analysis on commercial aviation all around CIS.
Sign up for our free Newsletter and never miss:
Get relevant data from reliable industry sources!
Leave a comment
You must be logged in to post a comment.