The net losses of Russia’s flag carrier Aeroflot have almost doubled in the first six months of 2019 compared to the same period last year, the company said, according to Ato.ru.
Russia’s biggest airline posted a net loss of 14.1 billion rubles ($220 million), dragged down by a disappointing fiscal first-quarter performance, according to Russian accounting standards (RAS).
Helped by the effects of the ruble depreciation against the euro (2.8 per cent year-on-year) and the U.S. dollar (10.1 per cent), as well as the carrier’s expanding operations, revenue for the period was up 15.4 to 252.86 billion rubles ($3.87 billion).
During the first half of the year, Aeroflot transported some 17.8 million passengers, 9.7 per cent more than in 2018, following the expansion of its route network and an increase in flight frequencies to some destinations.
However, the cost of sales in the period grew by 17.9 per cent year-on-year to 269.35 billion rubles ($4.13 billion) as a result of the company’s expansion costs and the effect of “unfavorable macroeconomic factors,” the company said.
The main increase in costs was the result of rising jet fuel prices, as total fuel expenses rose by 8.69 billion rubles (up 15.4 per cent year-on-year), due in part to a 12.2 per cent year-on-year increase in flight hours and 4.5 per cent year-on-year increase in ruble prices for fuel, the airline has revealed in a statement.
On the positive side, the airline has also reported a “stabilizing financial result” for the second quarter, with net income of 2.73 billion rubles (+74.1 per cent year-on-year), a factor that softened the blow of the six-month 2019 14.1 billion net loss after the very disappointing first quarter results.