Aeroflot has announced a fourth quarter net loss of $596 million on a 56 Percent revenue decline versus Q4 2019 to $925 million. For the full year, the carrier reported a net loss of $1.7 billion on a year-over-year revenue decline of 55 percent to $4.1 billion.
On Wednesday (March 10, 2021), the Aeroflot Group reported their fourth quarter and full year 2020 IFRS financial results. The Group reported a fourth quarter net loss of RUB 43,802 million (US $596 million) on a 56 percent decline in revenue versus Q4 2019 to RUB 67,969 million (US $925 million). For the full year 2020, Aeroflot reported a net loss of RUB 123,208 million (US $1.7 billion) on a year-over-year revenue decline of 55 percent to RUB 302,182 million (4.1 billion). In Wednesday’s announcement, PJSC Aeroflot’s Deputy CEO for Commerce and Finance, Andrey Chikhanchin, said,
“In Q4 2020 Aeroflot Group carried 7.1 million passengers, including 6.3 million passengers on domestic routes. This is slightly below the level achieved in Q3, which reflects the adjustment of Group's capacity on the back of seasonal decrease in demand and the impact of second wave of the pandemic. Thanks to positive dynamics and scale of the domestic market, Aeroflot Group in the second half of the year was able to recover about half of the capacity, which ranks as the best result among European airlines, according to a study by CAPA analytical agency. However, the persistence of large-scale restrictions on international flights and closed borders due to the pandemic are significant negative factors that continue to have a decisive impact on the aviation industry in general and on Aeroflot Group in particular.
“Revenue in Q4 2020 amounted to RUB 68.0 billion, 55.8% less year-on-year. Revenue management efforts as well as maintaining an emphasis on cargo transportation helped to slightly slow down decrease of revenue compared to Q3 when it amounted to 60.1% year-on-year. We continued to cut costs, with all key cost lines showing reductions, which helped to contain mounting losses.
“As anticipated net loss in Q4 2020 increased and amounted to RUB 43.8 billion. This reflects the specifics of supply-demand balance in the low season, and consequently lower yields, as well as a number of one-off adjustments, including Rossiya airline goodwill write-off due to a decrease in forecasts on the back of the pandemic. Excluding these adjustments, the net loss amounted to RUB 32.9 billion. Despite the loss, taking into account current operational and economic challenges of air transportation sector and executed flight program, operations of Q4 are financially efficient.
“Outstanding achievements of Pobeda airline are noteworthy as it increased passenger traffic by 7.6% in second half of the year. Despite complete suspension of operations in April and May, as well as decrease in average fares aimed at stimulating demand, the company was profitable on annual accounts. Pobeda is already a large company, there were 34 aircraft in its fleet at the end of 2020. Given the scale of the crisis, when the global industry incurred losses in the amount of USD 118 billion, this result is extremely strong.
“In 2020, Aeroflot Group secured necessary liquidity resources, including funds from secondary public offering in the amount of RUB 80 billion and credit lines in the amount of RUB 70 billion secured by state guarantees, which made it possible to regularly fulfill Group’s obligations.
“The low winter season of the first quarter continues. There are some minor improvements in operating performance, load factors and bookings, but overall, the situation remains difficult. In this regard, we maintain a conservative approach to capacity deployment in addition to its seasonal decline.
“We continue to look to the future while implementing anti-crisis measures. The transformation of Aeroflot Group has begun: work is underway on intra-group transfer of the fleet, subsidiaries are opening flights on new routes. In the summer season, Pobeda Airlines starts flights from our main hub – Moscow Sheremetyevo Airport. All these changes are aimed at long-term improvement of the efficiency of Aeroflot Group, but we are confident that these steps will have a positive impact on the performance of the current year as well.”
Aeroflot is the flag carrier of Russia and a proud member of the global SkyTeam® alliance. During 2020, Aeroflot carried 14.6 million guests and when the Aeroflot Group subsidiaries are included, the total rises to 30.2 million passengers. The airline holds a 4-Star rating from Skytrax World Airline Awards and has been awarded a five-star global airline rating by APEX. According to Cirium’s On-Time Performance Review, Aeroflot was the world’s most on-time mainline airline for 2019. The carrier has also received a five-star rating from OAG for flight punctuality. In 2020, Brand Finance, a leading brand strategy consultancy, declared Aeroflot the strongest brand in Russia, as well as the “world’s strongest airline brand.”