• In 2023, SATA Group’s airlines, Azores Airlines and SATA Air Açores, achieved very consistent growth results for the second consecutive year, reaching 2.4 million passengers carried and more than 28,400 flights. Revenues exceeded 395 million euros, displaying a consistent improvement in results, despite challenges in terms of costs.
• For the second consecutive year, Azores Airlines has achieved its best year ever in terms of passengers carried, with 1,445 thousand passengers carried (+33% compared to 2022), reaching 285.8 million euros in Revenue (+35% vs. 2022). The positive EBITDA of 21.6 million euros, 4 times higher than in 2022, reflects the continued favorable operational performance of the airline.
• SATA Air Açores has achieved its most profitable year ever, with a revenue of 109.5 million euros and an EBITDA of 11.4 million euros. The airline carried out 1,423 more interisland flights than in 2022, for a total of 18,737 flights. The number of passengers carried reached 952 thousand, representing a growth of 14% (+114 thousand passengers) compared to the previous year. In September 2023, the airline settled the financing contract with J.P. Morgan (60 million euros), which allowed savings of around 18 million euros by 2026.
SATA INTERNACIONAL – AZORES AIRLINES, S.A. (“Azores Airlines”) AZORES AIRLINES REACHES 285.8 MILLION EUROS IN REVENUE AND A POSITIVE EBITDA OF 21.6 MILLION EUROS, TRANSLATING THE AIRLINE'S EXCELLENT OPERATIONAL PERFORMANCE, WITH THE NUMBER OF PASSENGERS CARRIED TO GROW 33% TO 1,445 THOUSAND IN 2023
Azores Airlines is continuing to grow after the pandemic, setting the path for recovery and financial sustainability. The highest revenue year ever was registered in 2023, with a total of 285.8 million euros. This value represents a growth of 35.4% (+74.7 million euros), compared to the same period last year, and 81.7% (+128.5 million euros) when compared to the pre-pandemic period (2019), which reinforces the growth trend in the airline's activity and ability to capitalize on market opportunities in recent years.
“SATA has done a very significant work with Tourism, Government entities, and communities in the markets where we operate, not only to make the Group and the Azores known but also to raise awareness of the airline's strategic positioning and the ease of connectivity it offers between North America and Europe. We have developed a set of operational and commercial initiatives in this regard. There was a huge commitment to consolidate routes in North America and new markets," comments Teresa Gonçalves, CEO of the SATA Group.
“The increase in traffic compared to 2022 was, once again, largely driven by the increase in connectivity within the network," adds Teresa Gonçalves.
The evolution observed is based on the number of passengers carried by the airline in 2023, around 1,445 thousand passengers, +33.4% (+362 thousand passengers) compared to 2022, and +52.8% (+499 thousand passengers) compared to 2019, as a result of an increase in the capacity of passengers carried and a review of the route offer.
The number of flights carried out reached 9,700, also representing an increase compared to 2022 and 2019 of +17% and +39%, respectively. The load factor (occupancy rate) evolved to 82.8% yearon-year, representing an increase of 8 percentage points (p.p.) compared to 2022, also exceeding the pre-pandemic year by 4 pp. It should be noted that the load factor on routes to/from North America was around 85.6% during 2023, +32 p.p. compared to the same period last year. Routes to/from Europe (excluding Portugal) revealed a very significant combined performance, reaching a load factor of 81.5% in 2023 (vs. 64.8% in 2022).
The higher growth in revenues compared to operating expenses enabled us to achieve an operating result before interest, taxes, depreciation, and amortization (EBITDA) of 21.6 million euros, compared to 5.4 million euros in 2022. This reflects the excellent operating year developed by the airline, which had a variation four times higher than the previous year.
Earnings Before Interest and Taxes (EBIT) showed an improvement of 11.8 million euros when compared to 2022, which was strongly impacted by aircraft leasing.
Azores Airlines' performance has been characterized by consistent and sustained growth, exceeding in 2023 the revenue and EBITDA targets defined in the Restructuring Plan agreed with the European Commission. This was a reflection of commercial efforts and operational efficiency, as well as the commitment of management and teams’ during the airline's turnaround.
Operating costs reached a total of 264.2 million euros, +28.5% compared to the same period last year, and reflect extraordinary costs with irregularities (+4.7 million euros vs. 2022) and ACMIs (aircraft rental, crew, maintenance, and insurance) (+15.3 million euros vs. 2022) in 2023, mainly as a result of adverse weather conditions and delays in the delivery of aircraft undergoing maintenance and the delivery of the new A320neo aircraft. This variation also incorporates the increase in traffic operational costs (+36%, around 20.1 million euros vs. 2022), reflecting the increase in the airline's activity and the general rise in service prices and the increase in costs with staff (+21.2%, around 9.6 million euros vs. 2022), driven by the increase in operational activity and the continued impact of the replacement of salary cuts, career progressions and negotiations of company agreements.
It should also be noted that the results, in addition to being negatively impacted by irregularities and ACMIs above expectations, do not consider any compensation for carrying out routes under the Public Service Obligations between the Autonomous Region of the Azores and the Mainland and Madeira, which have historically presented exploration deficits. If these three effects were excluded, Azores Airlines would have reached an EBIT of 26.7 million euros, +30.9 million euros when compared to 2022, and made the same adjustments this year.
Throughout 2023, Azores Airlines recorded positive net results for five consecutive months, with the 2023 Net Result showing an improvement of 8.1 million euros compared to 2022, despite being impacted by restructuring costs and financial costs arising from debt contracted mostly in previous years.
SATA AIR AÇORES – SOCIEDADE AÇORIANA DE TRANSPORTES AÉREOS, S.A. (“SATA Air Açores") SATA AIR AÇORES PAYS DEBT IN 2023 WITH AN ESTIMATED SAVING OF 18 MILLION EUROS IN 3 YEARS AND CONTINUES TO REGISTER AN INCREASE IN ACTIVITY, REFLECTED IN THE GROWTH OF PASSENGERS CARRIED AND REVENUES EXCEEDING 109 MILLION EUROS.
SATA Air Açores maintains a growth trend in its operational activity. In 2023, it carried out 1,423 more interisland flights than in 2022 (+8.2%) and 3,447 more compared to 2019 (+22.5%), for a total of 18,737 flights. The load factor (occupancy rate) evolved to 74%, which represents an increase of 2 p.p. compared to 2022, although still 2 p.p. below 2019, justified by the increase in the number of frequencies, and consequently the number of seats offered on different routes operated in the Azores Archipelago.
In 2023, the airline registered a total revenue of 109.5 million euros, representing a growth of 18.4% (+17 million euros) compared to the same period last year and 30.9% (+25.8 million euros) compared to the pre-pandemic year of 2019. The basis of this evolution is the number of passengers carried in 2023, of 952 thousand passengers, which represented a growth of 14% (+114 thousand passengers) compared to the previous year, and of 24% (+185 thousand passengers) compared to 2019.
SATA Air Açores achieved an Operating Result before interest, taxes, depreciation, and amortization (EBITDA) of 11.4 million euros, which compares with 7.8 million in the same period last year (+45.9%). The Result Before Interest and Tax (EBIT) in 2023 was positive by 0.3 million euros, +2.8 million euros compared to the same period last year.
Operating costs reached a total of 98 million euros, +15.9% compared to the same period last year (+13.4 million euros). The increase in costs is mostly due to the increase in staff expenses, +22.7% (+10.1 million euros), motivated, above all, by the continued impact caused by the replacement of salary cuts during the pandemic period and the career progressions and salary increases agreed with the different union structures. Maintenance expenses also experienced a significant increase in 2023 compared to 2022, +22.8% (+1.4 million euros), as a result of the increase in repair and maintenance needs, mainly due to the specificities of the operation on interisland flights. Operating costs represented, in 2023, 89.6% of total revenue (vs. 91.5% in 2022).
The Net Profit for the year was strongly conditioned by net financial costs (8.6 million euros) and restructuring costs (1.6 million euros). It should be noted that SATA Air Açores carried out, on September 20, 2023, the early repayment of the entire bond loan of 60 million euros, issued in December 2022, with a projected total savings of 18 million euros by 2026.
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* Glossary: ASK: Available seat kilometer | Seat-kilometer - total number of seats available for sale multiplied by the number of kilometers flown. Load Factor: Total number of passenger-kilometers (RPK) divided by the total number of seat-kilometers (ASK). EBITDA: Earnings before interest, taxes, depreciation, and amortization. EBIT: Operating income before interest and taxes.
ABOUT SATA GROUP AIRLINES | The SATA group companies started in 1941 as “Sociedade de Estudos Aéreos Açorianos.” It has more than eighty years of history. It has its roots in the Azores and is committed to tackling the isolation of the Archipelago. SATA Group's airlines embrace the mission of building air bridges between the Azores and the world. Currently, Azores Airlines operates a network of regular routes (Regional, National, and International) and plays a vital role in the development of the Autonomous Region of the Azores. Operates with an Airbus A320ceo, Airbus A320neo, Airbus A321neo, and A321LR fleet. SATA Air Açores essentially operates on the nine islands of the Archipelago and ensures the mobility of people and goods within the Azores. It operates a Bombardier Q400 and Bombardier Q200 fleet.