Despite the continued impact of the pandemic on its operations, Russian flag carrier Aeroflot’s domestic air travel has returned to almost 2020 levels in the first quarter of 2021. As a result, the airline’s losses have been reduced, it said on May 31. So domestic makes Aeroflot’s first quarter.
In Q1, Aeroflot carried 6.5 million passengers on its domestic network compared to 6.7 million in 2020. By comparison: in the first quarter of 2019, the airline carried 7.0 million passengers.
The international scheduled network was operated at minimum capacity and carried 905.000 passengers versus 4.5 million last year and 5.7 million in Q1 2019.
Whereas capacity was 16.1 percent lower on the domestic network, international saw an 81.1 percent reduction.
Translated into financials, Aeroflot ended the first quarter at a RUB 25.143 billion net loss compared to 22.484 billion in 2020. This is a significant improvement over the fourth quarter of 2020 when the net loss was RUB 43.8 billion and 95.5 billion for the full year.
The operating profit/EBITDA was RUB 7.708 billion versus 13.054 billion. Aeroflot hasn’t specified the results of the parent airline, Rossiya, and Pobeda.
Total revenues were down by 39.1 percent to RUB 75.498 billion, of which 60.307 billion (-43.4 percent) coming from passenger revenues on scheduled and charter flights. Revenue passenger kilometers from domestic services were only 2.3 percent down on Q1 last year to 12.1 million kilometers when the effects of the Covid-crisis were less drastic. International RPK’s were down by 81.5 percent to 3.1 million.
Cargo benefitted from higher yields and reported 65.7 percent higher revenues to RUB 7.959 billion.
Operating costs were down by 29.8 percent to RUB 96.170 billion, with staff costs down by almost one-third to RUB 14.761 billion.
The Group’s net debt increased by 2.6 percent to RUB 675.4 billion, of which 664.2 billion are lease liabilities and 88.7 billion loans and borrowings. Aeroflot says its liquidity position remains strong, with cash and short-term investments at RUB 78.2 billion. It has retained a significant portion of the RUB 80 billion that was raised through a public offering last October.
The second Airbus A321neo for Aeroflot was showed at the new Krasnoyarsk hub on May 31. (Aeroflot)
As reported previously on Airinsight, Aeroflot is to transform its domestic and international network by transforming Krasnoyarsk into a central hub between the Far East and Western Russia. The airline will base a number of Boeing 737-800s here. After an opening ceremony on May 31, the actual first new route out of Krasnoyarsk was that to Blagoveshchensk on June 1. Other routes will be opened to Krasnodar, Simferopol, Sochi, and Irkutsk. These routes are expected to attract some 100.000 passengers already this summer.
“The launch of the international hub in Krasnoyarsk is a milestone for both our airline and the whole of Russia’s transport system. The air hub means new opportunities for our passengers, reduced travel time and fewer connections per trip, attractive airfares and all the possibilities of our Group’s route network”, said CEO Mikhail Puloboyarinov.
Fleet renewal continues
Aeroflot continues its fleet renewal. After welcoming the Boeing 777-300ER and the first Airbus A350 in February 2020, it took delivery of two A350-900s on May 28 as well as two A321neo’s and an A320neo. A busy day then for the Russian carrier. The first A320neo actually arrived on May 18 through CDB Leasing. Eight more will follow this year.
The neo’s join the 68 A320ceo’s currently in the Aeroflot fleet, down from 79 on January 1. They have twelve Business Class and 144 Economy seats in a cabin very similar to that of the A350. The A321neo’s have twelve Business and 184 Economy seats.
Aeroflot has capital commitments worth RUB 230 billion for 21 more A350s and two 777s plus equipment, excluding aircraft that will be leased.