The largest Russian airline increased its net loss in the first quarter nearly in half, to 22.5 billion rubles. For losses on the background of the coronavirus led market strategy of the airline aimed at the development of transit traffic from China, he suffered from imposed by the PRC authorities restrictive measures at the beginning of the year. In April—may, after the closing of all international destinations and the introduction of movement restrictions in Russia, the negative effect of coronavirus on the financial performance of Aeroflot will be much more significant.Net loss of “Aeroflot” in the first quarter of 2020 decreased by 42.8%, to 22.5 billion rubles, follows from the statements under IFRS for the first quarter. Revenue decreased by 10%, to 123,9 bln rubles, EBITDA decreased by 38.8%, to 13 billion rubles In the first quarter, China started the outbreak of coronavirus infection, which later spread to Europe, USA, Russia and other countries. Chinese authorities in the beginning of the year banned outbound tourism, hoping to stop the spread of the virus. The Russian authorities, in turn, has banned flights to China all airlines, except for Aeroflot, causing negative reaction of other market participants, greeted the move as a restriction of competition. However, business passenger traffic from China was not enough even to fill the capacity of one of Aeroflot, which the airline began to cut the number of flights to cities in China. At the same time fell and domestic passenger traffic of “Aeroflot” because of Chinese tourists through the hub of Aeroflot at Sheremetyevo, flew to other cities on the route network of the airline.The first quarter traditionally brings airlines losses: a large part of passenger traffic falls in the high summer season, which can form the main carriers ‘ revenues for the year. Even if they lifted restrictions on movement within Russia, many Russians refuse to travel for fear of Contracting the coronavirus in the road or in another region. In addition, remains closed to international air traffic, airlines bringing the bulk of the profits.”The positive trend 2019, including revenue growth rates and lower operating costs, continued into the beginning of 2020 and had to ensure improvement of profitability and financial result in the reporting period. However, the unprecedented impact of coronavirus infection on aviation led to the almost complete halt of international flights, as well as to a significant decrease in passenger traffic on domestic routes that neutralized the positive dynamics of the beginning of the year significantly worsened the financial result in March,”— said Deputy General Director of “Aeroflot” according tomercie and Finance Andrei Chikhanchin.According to him, the almost complete stop of flights in April and may will lead to a significant deterioration of financial result in the second quarter. “However, since June, the group of “Aeroflot” starts the gradual resumption of the flight program, in particular, from the beginning of the month, will resume its flights, the airline “Victory”. Management is doing everything possible to the group has been able to pass this serious to aviation crisis and were ready for the market recovery, which we expect will begin in the near future”,— says Mr. Chikhanchin.Herman Kostinskii the beginning of the summer, CPS has made concessions to airlines and transport unit of the government in the matter of the occupancy of the aircraft: the Ministry no longer insists on limiting the sales of tickets by half. Now, the airlines can expect a return of at least part of the flights, if the demand for air travel in June will rise sharply. But even after the removal of the controversial requirements experts call recommendations is poorly adapted to the peculiarities of the organization of air travel and consider it necessary to develop new based on the views of companies and epidemiologists.Read more
