Aeroflot reduced losses by more than 20 times

“Aeroflot» in the first half of 2023 received 1.6 billion rubles. net loss under RAS, the airline announced on August 1. Compared to the same period last year, the net loss decreased by almost 24 times, then it amounted to 38.3 billion rubles.

Reporting under Russian Accounting Standards includes indicators only for the parent airline “Aeroflot”, but does not take into account the data of other carriers of the group – Rossiya and Pobeda low-cost carrier.

Taking into account the new accounting standard FSBU 25/2018 “Lease Accounting”, which, by order of the Ministry of Finance, has been applied since 2022, the net loss for the half year of 2023 amounted to 81.7 billion rubles. According to this standard, the company must record on the balance sheet the total value of the leased property, in the case of Aeroflot, foreign aircraft and engines.

“According to the standard, leased aircraft (AC) and aircraft engines, as well as the cost of overhaul and maintenance are accounted for as assets of PJSC “Aeroflot“, – the airline said in a statement.

As of June 30, 2023, the total debt of the airline for foreign equipment is $5.55 billion. Net loss of 81.7 billion rubles. generated largely due to the growth of the dollar from 70.3 rubles. as of the end of December 2022 to 87 rubles. – as of June 30, 2023

The airline’s revenue from ticket sales for the first half of the year increased by 48.1% to 205.4 billion rubles. Aeroflot explains the positive dynamics by the restoration of air transportation, an increase in the flight program on domestic routes and the resumption of international flights to accessible destinations.

“Creating optimal commercial conditions and holding promotions and sales made it possible to increase passenger transportation on domestic routes by 24.4% and increase revenue in this segment by 23.1 billion rubles. The volume of freight traffic increased by 18.2%,” the airline said in a release.

The cost of sales at the same time increased by 31.66 billion rubles. (by 17.3%) and amounted to 214.6 billion rubles. The main factor was the increase in the production program, the release says.

“The cost of jet fuel increased by 17.64 billion rubles. (by 45.8%) with an increase in consumption by 31.5%,” the company said in a statement. Maintenance costs in the first half of 2023 amounted to 9.4 billion rubles, which is 4.9 billion rubles. more than in the first half of 2022. “In the first half of 2022, due to the transfer of a number of forms of maintenance during the formation of new supply chains of components, there was a reduction in costs, which will recover in 2023,” the release explains.

Commercial expenses of Aeroflot decreased by 5.03 billion rubles. (by 64.8%), to 2.73 billion rubles, which the company associates with the transition to the Russian Leonardo booking system (before the imposition of sanctions, Aeroflot used the American Sabre).

For the whole of 2022, the airline received a net loss under RAS in the amount of 14 billion rubles. When transferring the industry subsidy from other income to revenue, the indicator amounted to 10.6 billion rubles. But without taking into account the impact of the new accounting standard FSBU 25/2018 “Lease Accounting” (in 2022, the ruble strengthened significantly by 2021), the net loss amounted to 40.5 billion rubles, of which 38.3 billion rubles. the airline received in the first half of 2022. Revenue for the past year amounted to 332.8 billion rubles, it decreased by 12.1% compared to 2021.

Aeroflot’s release states that last year’s performance was significantly affected by external restrictions and the need to transform the airline in the new economic and geopolitical conditions. “The company has carried out the transformation of business processes, placing a bet on the development of the domestic market, expanding flights to accessible international destinations, replacing imported goods and services with products from Russian manufacturers,” the report says.

Elena Sakhnova, an independent transport expert, believes that “Aeroflot” in the first half of 2023 showed a “generally good” result and returned to normal values ​​​​for the industry. “The first half of the year for Russian airlines almost always ends with losses, most of which are generated in the first quarter. The second quarter usually ends with a small profit and reduces the losses of the first quarter, ”the expert recalls.

She explains the significant losses in 2022 by the large size of the airline’s fleet (number of aircraft), a significant part of which was focused on international transportation. “Aeroflot» could not supply its entire aircraft fleet to domestic destinations, this would inevitably bring down airfare prices. “The second factor is the lack of flying money (payments by foreign air carriers for flights on the Trans-Siberian routes that stopped after the start of the NWO, most of which historically received “Aeroflot“. – Vedomosti”), – said Sakhnova. According to her, “Aeroflot” for many years built its work on the basis of receiving deductions for the flight of foreign airlines over Siberia. Last year, the company lost this source of income. “