Early release of Aeroflot H1 figures shows growing operating loss in both rubles and dollars

Published: 8/11/1999

In line with normal practice, Aeroflot's headline results for the first half of 1999 have been released unofficially by the Russian financial information agency AKM, from a source that the agency will not reveal. Historically, however, any major discrepancies have been unusual, when the official figures have been made known by the airline. In the first six months of 1999, sales in rubles showed a decline in dollars of 27% (on the basis of an average exchange rate of 23.7 rubles). In rubles, they rose by 183%, compared to the corresponding period in 1998. This reflects the large proportion of Aeroflot's income derived in dollars. The growth however, was offset by a ruble cost increase of 197%, which can be attributed to Aeroflot's dollar inputs and to Russia's inflation. In dollars, costs fell by 23%, according to AKM, so producing an operating loss for the first six months of this year of 464m rubles and $19.6 m. Without further explanation from the company, these figures are difficult to interpret in isolation, as the RAS figures do not explain how such items as leasing charges have been taken or inflation adjust. The substantial falls in costs however, suggest that the current programme of reducing costs is continuing to work. We will have to wait for more detail regarding traffic to see whether the Q1 3.5% year-on-year increase has been maintained.

Article ID: 748