Avianca reports modest Q2 profit as it executes on post-restructuring enterprise approach | News

Avianca posted a modest income all through the second quarter, benefiting from charge regulate, smooth operations and enhanced desire, relatively than higher selling prices, the firm states.

The Bogota-primarily based provider finished the quarter with a financial gain of $15.4 million. For the initial six months of 2023, the organization posted a earnings of $3.7 million.

Profits for the 2nd quarter rose to $1.11 billion from $1.02 billion in Q2 2022. Working expenses fell 11% over the exact time period past yr at $989 million. 

Income for the duration of the first 6 months rose to $2.2 billion compared to $1.83 billion in the in initially fifty percent 2022.

“We ongoing our robust execution on the business plan in a seasonally difficult quarter,” chief govt Adrian Neuhauser explained on the company’s quarterly analyst contact on 4 August. Usually, the first two quarters of the yr are weaker than the last two.

“Avianca accomplished its narrowbody densification programme in file time which even more optimised our price tag performance, enabled amplified ability allocation and ongoing to minimize our per-passenger carbon footprint,” he provides.

That seat densification was accomplished on the airline’s 104 older Airbus narrowbody plane. It elevated capacity by a fifth, and ensured a standardized merchandise throughout the fleet, he suggests.

Avianca lifted capability as calculated by readily available seat kilometres (ASKs) 22% to 13.3 million throughout the three months ending 30 June. The airline flew 7.7 million travellers, an enhance of 17.7% about the similar quarter in 2022.

Cargo profits and margins are “ahead of company plan” even while “obviously it’s a much more challenged business than at the peak of previous year”, he provides.

The business launched 8 new routes, and now operates 144 routes to 71 destinations. Its on-time performance was 87.5%, which allowed the airline to drive up aircraft utilization to above 11h for each working day.

At the conclude of the second quarter, Avianca experienced 147 plane in its fleet, seven much more than at the finish of previous year.

AVIANCA SECURES VIVA AIR SLOTS

Immediately after the demise of Colombian competitor Viva Air earlier this calendar year, and Avianca’s thwarted bid to get it, the airline has inherited some of the defunct carrier’s slots at Bogota’s El Dorado International airport for the impending wintertime vacation season, as very well as “about a dozen” of its leased aircraft, Neuhauser claims. It’s also hiring ex-Viva employees.

“We acquired a rather significant part of [the slots], and we intend to fly them,” he says.

Chile’s LATAM Airways Group, just one of Avianca’s toughest rivals in Colombia, also was allocated some of Viva’s slots in Bogota and took several Viva aircraft. On 3 August the Chilean provider claimed it experienced amplified ability by 20% in the country, and now has 33% of the domestic Colombian sector.

“We are heading to operate a network to assist Colombians see LATAM as a authentic alternative to travelling not only within Colombia but also internationally,” LATAM’s chief govt Roberto Alvo explained on that airline’s analyst call.

NARROWBODY Business enterprise Course

In the confront of increased levels of competition across the region, Neuhauser stated Avianca is taking into consideration re-introducing an increased business enterprise class merchandise on its narrowbody aircraft, and traveling a lot more widebodies in just the Americas.

Avianca has saved a comprehensive company class, like lie-flat seats, on its widebody plane for extensive-haul flights to Europe. “What we have identified within just the Americas – on some of the marketplaces where we are conversing about above-5h segments – possessing just a narrowbody solution is uncompetitive,” he claims, noting the company loses out on an more cabin as properly as stomach cargo earnings, he provides.

Hence Avianca is deploying a lot more widebodies in the Americas, and also seeking to make alterations to its narrowbody featuring on individuals intra-America routes.

“In the narrowbodies we have a few rows of broader, far more comfy seats that we have been advertising to-date solely as a seat upsell and not as a bundled company class, or premium financial state,” he says. “What we imagine is that that has remaining home for the competition to market merchandise that are similar or worse than that.”

“So we do intend to start off commercialising the front cabin yet again as a class in addition to as a seat upgrade, and there will be additional to occur in the subsequent several months as will define what the assistance will be,” he suggests.

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