Tag Archives: 777-3M0

Aeroflot Group reports a net loss for the first half

Aeroflot Group (Aeroflot Russian Airlines) (Moscow) today (August 31) published its consolidated interim financial statements for the six months ended June 30, 2015, in accordance with International Financial Reporting Standards:

First Half (1H) 2015 Operating and Financial Highlights for Aeroflot Group:

Group passenger traffic increased by 14.0% year-on-year, with 33.4% year-on-year growth in the domestic segment;
Aeroflot Group increased its market share [1] by 5.8 percentage points (p.p.) year-on-year to 37.0%;
Revenue reached RUB 176,467 million, up 25.8% year-on-year;
EBITDAR [2] nearly doubled year-on-year to RUB 33,252 million;
EBITDA [2] increased by more than two-fold year-on-year to RUB 13,311 million;
Operating profit amounted to RUB 5,866 million as compared to an operating loss of RUB 1,384 million in 1H 2014;
Net loss amounted to RUB 3,541 million ($52,699.99)

Shamil Kurmashov, PJSC Aeroflot Deputy CEO for Finance and Network and Revenue Management, commented:

“In the first half of 2015, Aeroflot Group strengthened its position as the leader in the Russian air transportation market with 14.0% year-on-year growth in passenger traffic and a 5.8 percentage point increase in market share. This was driven by strong operational performance at Aeroflot airline and the successful roll-out of Russia’s first low-cost carrier, Pobeda, which has quickly become one the top airlines in the country. The Group also benefited from changes in the competitive landscape, taking market share from foreign carriers that decreased frequencies on a number of routes as well as less efficient Russian peers.

“Our focus on the high-growth domestic market paid off with strong increases in Group traffic, which drove revenue up 25.8% year-on-year to RUB 176.5 billion, while strict cost control reined in growth of operational expenses despite exchange rate volatility. As a result, in the first half of 2015 Aeroflot Group posted an operating profit of RUB 5.9 billion; EBITDA and EBITDAR also rose, and the EBITDA and EBITDAR margins increased 3.9 and 6.9 percentage points to 7.5% and 18.8%, respectively.

“The Group focused on fleet optimization, cost-cutting, boosting efficiency of business processes and financial management, and maintaining a robust financial position. We are confident our policy of expanding our presence on the growing Russian market, maintaining customer loyalty and increasing business efficiency will enable continued growth in the Group’s profitability as the Russian economy recovers.”

In 1H 2015, Aeroflot Group’s revenue increased by 25.8% year-on-year to RUB 176,467 million, primarily as a result of an increase in revenue from Scheduled passenger flights and Other revenues.

Revenue from scheduled passenger flights in 1H 2015 increased by 30.0% year-on-year to RUB 144,087 million, boosted by 14.0% growth in passenger traffic year-on-year. Revenue from charter flights decreased by 71.0% to RUB 2,075 million, due to the Group’s strategy to decrease its presence in this market segment, as well as overall market dynamics in tourism traffic.

Despite a 1.0% decrease in the volume of cargo and mail carried in 1H 2015, cargo revenue increased 16.3% year-on-year on the back of stronger yields.

Other revenues increased by 39.9% year-on-year to 25,863 million, mainly driven by an increase in FX-denominated revenues from airline agreements following changes in the exchange rate.

Notes:

1. Including foreign carriers traffic.

2. EBITDAR = EBITDA before operating lease expenses. EBITDA = operating income + depreciation & amortization + customs duties.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 777-3M0 ER VQ-BUB (msn 41690) departs from Los Angeles International Airport.

Aeroflot aircraft slide show:

Will Russia restrict European airlines from overflying Siberia?

According to Reuters, “Russia may restrict or ban European airlines from flying over Siberia on busy Asian routes, a newspaper reported on Tuesday, following Western sanctions which have grounded one Russian carrier (Dobrolet) and a billionaire’s private jet.

The Russian business daily Vedomosti quoted unnamed sources as saying the foreign and transport ministries were discussing possible action which might force EU airlines into long and costly detours and put them at a disadvantage to Asian rivals.”

Aeroflot Russian Airlines (Moscow) receives around $300 million in revenue every year due to overflight fees by European Union carriers.

If this happens, will there be further retaliation against Aeroflot and other Russian carriers? Can Russia afford the loss of revenue?

Read the full report: CLICK HERE

Read the analysis from Bloomberg Businessweek: CLICK HERE

Top Copyright Photo: Jay Selman/AirlinersGallery.com. Can Aeroflot afford this loss of revenue and possible further restrictions in Europe? Boeing 777-3M0 ER VP-BGF (msn 41686) arrives in New York (JFK).

Aeroflot:

Finnair:

Bottom Copyright Photo: TMK Photography/AirlinersGallery.com. If Siberian overflights are banned by Russia, one of the potentially most impacted European carriers could be Finnair which has expanded its route network to Asia through its modern and efficient Helsinki hub. For Finnair, avoiding Russian airspace could be a major and expensive challenge.

Aeroflot introduces its expanded summer schedule

Aeroflot Russian Airlines (Moscow) on March 30 introduced its summer schedule until October 25, 2014. The airline issued this statement on the highlights of the enhanced schedule:

This summer Aeroflot plans to launch flights to 52 countries, including seven CIS countries (Armenia, Azerbaijan, Belarus, Kyrgyzstan, Kazakhstan, Uzbekistan and Ukraine). The route network of Aeroflot comprises 125 destinations (73 outside Russia), including 49 destinations in Europe, 12 in Asia, 7 in America and 5 in the Middle East and Africa.

Aeroflot’s CIS network includes 11 destinations: Baku, Bishkek, Yerevan, Minsk, Tashkent, Kiev, Donetsk, Dnepropetrovsk, Kharkiv, Odessa, and Karaganda.

Aeroflot continues to play a significant role in shaping the structure of Russian civil aviation and further development of the domestic air travel. Thus daily flights will be operated on two new destinations in Russia: Novy Urengoy and Rostov-on-Don. Aeroflot will continue services on routes introduced under the winter season 2013/2014: Moscow – Ulan-Ude and Moscow-Chita.

Including the cities above, Aeroflot’s domestic service embraces 41 the most popular destinations in Russia: Abakan, Anapa, Astrakhan, Barnaul, Vladivostok, Volgograd, Gelendzik, Ekaterinburg, Irkutsk, Kazan, Kaliningrad, Kemerovo, Krasnodar, Krasnoyarsk, Magnitogorsk, Mineralnye Vody, Nizhnevartovsk, Nizhny Novgorod, Nizhnekamsk, Novokuznetsk, Novosibirsk, Orenburg, Omsk, Perm, Petropavlovsk-Kamchatsky, Samara, Saint Petersburg, Simferopol, Sochi, Surgut, Tomsk, Tyumen, Ufa, Vladivostok, Yuzhno-Sakhalinsk, and Yakutsk.
Flight frequency will also be increased at the most popular domestic destinations: Saint Petersburg (from 105 to 112 weekly flights), Sochi (from 35 to 42), Krasnodar (from 28 to 41), Samara (from 28 to 35), Nizhny Novgorod (from 28 to 35), Chelyabinsk (from 21 to 28), Nizhnekamsk (from 14 to 21), Anapa (from 14 to 21), Gelendzik (from 7 to 14), Mineralnye Vody (from 7 to 14), Orenburg (from 7 to 14), Tomsk (from 7 to 14), Yuzhno-Sakhalinsk (from 7 to 10).

Aeroflot’s fleet is growing with deliveries of new long-haul Boeing 777-300 ERs (above), which will provide services to Vladivostok, Krasnoyarsk, Petropavlovsk-Kamchatsky, Khabarovsk, Bangkok, Hong Kong, Guangzhou, New York (JFK), Beijing, Seoul and Shanghai.

Traditional winter destinations – Innsbruck and Phuket – will be replaced by summer ones like Gelendzik, Heraklion, Thessaloniki, Dubrovnik, Split and Tivat.

Aeroflot network will be strengthened by 109 destinations on which aircraft of Aeroflot Group subsidiary companies will be used. Aeroflot marketing flights will be operated on 116 routes.

During Summer Season 2013 Aeroflot together with its subsidiary companies and code sharing partners will fly to 351 unique destinations in 66 countries, including Russia.

Copyright Photo: Marcelo F. De Biasi/AirlinersGallery.com. Boeing 777-3M0 VP-BGB (msn 41679) completes its final approach to the runway at New York’s John F. Kennedy International Airport (JFK).

Aeroflot:

Aeroflot delays the introduction of its first new Boeing 777-300 ER to Bangkok

Aeroflot Russian Airlines (Moscow) is ready to be a Boeing 777 operator again (it previously operated the 777-200). However the Russian flag carrier has delayed the introduction of its first new Boeing 777-300 ER on the Moscow-Bangkok route. The pictured 777-3M0 ER VP-BGB (msn 41679) was handed over to the carrier on January 30. Aeroflot is blaming the delay on the delay of Interstate Aviation Committee (IAC) to certify the new type in Russia. The airline issued the following statement:

“On January 30, 2013, after completing all the necessary formalities Aeroflot took delivery of new Boeing 777-300 ER at Seattle manufacturing plant.

According to the statement of the Federal Air Transport Agency of Russia to the mass media, Aeroflot will not get the permission of the Russian aviation authority to start the commercial exploitation of the plane, because until now the Interstate Aviation Committee (IAC) has not certified Boeing 777-300 ER type aircraft.

Due to this situation Aeroflot has to postpone the launch of the first commercial flight of this aircraft on Moscow-Bangkok route initially planned for February 1, 2013.

Instead of flying on Boeing 777-300 ER Aeroflot will provide services to this destination on Boeing 767-300 and Airbus A330. The passengers on Moscow-Bangkok route, who bought tickets for new Comfort class will be provided with business class tickets.

In order to start the exploitation of the airliner from the mentioned date, Aeroflot has timely completed all the necessary formalities stipulated by the Russian legislation, and therefore the air company will take measures to compensate the caused losses.”

Copyright Photo: Joe G. Walker. VP-BGB is pictured at a wet Everett (Paine Field) prior to the hand over. VP-BGB is seen getting ready to depart on a test flight. The wide-body airliner is named “M. Kutuzov”. According to Wikipedia, “Mikhail Illarionovich Golenishchev-Kutuzov (1745-1813) was a Field Marshal of the Russian Empire. He served as one of the finest military officers and diplomats of Russia under the reign of three Romanov Tsars: Catherine II, Paul I and Alexander I. His military career was closely associated with the rising period of Russia from the end of the 18th century to the beginning of the 19th century. Kutuzov contributed much to the military history of Russia and is considered to have been one of the best Russian generals under the reign of Catherine II.”

Aeroflot Russian Airlines: