Avianca reports modest Q2 profit as it executes on post-restructuring business plan
Avianca posted a modest profit during the second quarter, benefiting from cost control, smooth operations and increased demand, rather than higher prices, the company says. The Bogota-based carrier ended the quarter with a profit of $15.4m. For the first six months of 2023, the company posted a profit of $3.7m. Revenue for Q2 rose to $1.11b from $1.02b in Q2 2022. Operating costs fell 11% over the same period last year at $989m. Revenue during the first six months rose to $2.2b versus $1.83b in the in first half 2022. “We continued our strong execution on the business plan in a seasonally challenging quarter,” CE Adrian Neuhauser said on the company’s quarterly analyst call on 4 August. Traditionally, the first two quarters of the year are weaker than the last two. “Avianca completed its narrowbody densification programme in record time which further optimised our cost efficiency, enabled increased capacity allocation and continued to reduce our per-passenger carbon footprint,” he adds. That seat densification was done on the airline’s 104 older Airbus narrowbody aircraft. It increased capacity by a fifth, and ensured a standardized product across the fleet, he says. Avianca lifted capacity as measured by available seat kilometres (ASKs) 22% to 13.3m during the three months ending 30 June. The airline flew 7.7m passengers, an increase of 17.7% over the same quarter in 2022. Cargo revenue and margins are “ahead of business plan” even though “obviously it’s a more challenged business than at the peak of last year”, he adds. The company launched eight 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 over 11h per day. At the end of Q2, Avianca had 147 aircraft in its fleet, seven more than at the end of last year. After the demise of Colombian competitor Viva Air earlier this year, and Avianca’s thwarted bid to acquire it, the airline has inherited some of the defunct carrier’s slots at Bogota’s El Dorado International airport for the upcoming winter travel season, as well as “about a dozen” of its leased aircraft, Neuhauser says. It’s also hiring ex-Viva employees. “We received a pretty substantial portion of [the slots], and we intend to fly them,” he says.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2023-08-07/star/avianca-reports-modest-q2-profit-as-it-executes-on-post-restructuring-business-plan
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Avianca reports modest Q2 profit as it executes on post-restructuring business plan
Avianca posted a modest profit during the second quarter, benefiting from cost control, smooth operations and increased demand, rather than higher prices, the company says. The Bogota-based carrier ended the quarter with a profit of $15.4m. For the first six months of 2023, the company posted a profit of $3.7m. Revenue for Q2 rose to $1.11b from $1.02b in Q2 2022. Operating costs fell 11% over the same period last year at $989m. Revenue during the first six months rose to $2.2b versus $1.83b in the in first half 2022. “We continued our strong execution on the business plan in a seasonally challenging quarter,” CE Adrian Neuhauser said on the company’s quarterly analyst call on 4 August. Traditionally, the first two quarters of the year are weaker than the last two. “Avianca completed its narrowbody densification programme in record time which further optimised our cost efficiency, enabled increased capacity allocation and continued to reduce our per-passenger carbon footprint,” he adds. That seat densification was done on the airline’s 104 older Airbus narrowbody aircraft. It increased capacity by a fifth, and ensured a standardized product across the fleet, he says. Avianca lifted capacity as measured by available seat kilometres (ASKs) 22% to 13.3m during the three months ending 30 June. The airline flew 7.7m passengers, an increase of 17.7% over the same quarter in 2022. Cargo revenue and margins are “ahead of business plan” even though “obviously it’s a more challenged business than at the peak of last year”, he adds. The company launched eight 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 over 11h per day. At the end of Q2, Avianca had 147 aircraft in its fleet, seven more than at the end of last year. After the demise of Colombian competitor Viva Air earlier this year, and Avianca’s thwarted bid to acquire it, the airline has inherited some of the defunct carrier’s slots at Bogota’s El Dorado International airport for the upcoming winter travel season, as well as “about a dozen” of its leased aircraft, Neuhauser says. It’s also hiring ex-Viva employees. “We received a pretty substantial portion of [the slots], and we intend to fly them,” he says.<br/>
