UTair’s losses shrink 17% in 2015
UTair, Russia’s third largest air carrier if helicopter operation is also considered, saw its net loss decline in 2015—17.4% year-on-year, according to the Russian Accounting Standards—to 18.426 billion rubles ($282 million at the current exchange rate). The airline’s revenue for the same period shrank 30% to 49.665 billion rubles.
The drop in revenues was recorded for UTair’s fixed-wing passenger services as well as for the company’s helicopter operations. In the case of passenger services, the company earned 38.139 billion rubles, a decrease of 25.5% year-on-year. Revenues dropped both for domestic services, which decreased 9.7% to 29.205 billion rubles, and for international operations, which went down 50.9% to 8.933 billion rubles.
Helicopter-related revenues plummeted 48.6% to 6.655 billion rubles year-on-year. Rotary-wing operations within Russia brought UTair 1.135 billion rubles, or 85.1% down year-on-year; foreign operations earned the company 5.520 billion rubles, up 3.6%.
UTair continues to include helicopter operations in its accounting reports despite the decision, made in early 2014, to spin off the rotary-wing division into a separate company at some point in 2015. A commentary accompanying the fresh report says the process has suffered delays and is now expected to be completed in Q3 2016.
UTair’s long-term liabilities grew threefold year-on-year to 84.771 billion rubles, whereas its current liabilities shrank 3.5 times to 21.025 billion rubles.
The commentary reads that the airline managed to reach debt settlement agreements, renegotiate lease payment schedules, and have leasing contracts extended with most of its lessors in 2015.
The carrier found itself in a difficult financial situation last year due to the overall economic recession in Russia. UTair’s accumulated debts resulted in several bankruptcy lawsuits filed against it, but the airline eventually managed to negotiate debt-restructuring deals with its creditors thanks to government support in the form of state guarantees.
The carrier cut its available carrying capacity significantly in order to improve the efficiency of its business model. As a result, in the initial phase of the recovery program, UTair registered a noticeable decline in passenger traffic. However, the figure grew 17.9% in Q1 2016 to 1.22 million passengers, despite the general stagnation of the Russian air transport market. UTair expects to carry a total of 6 million passengers in 2016, against 5.5 million in 2015.
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