- In the first quarter of 2024, the SATA Group’s airlines, SATA Internacional-Azores Airlines, S.A. (Azores Airlines) and SATA Air Açores – Sociedade Açoriana de Transportes Aéreos, S.A. (SATA Air Açores), continued the trajectory of passenger and revenue growth, despite the first quarter being increasingly challenging for airlines, reaching 447 thousand passengers carried (+21% compared to the first quarter of 2023).
- Revenues from the two airlines reached 68.9 million euros (+24% compared to the same period in 2023). Regarding costs, these also showed growth compared to the previous year, with a significant impact on the costs of irregularities and ACMIs (aircraft rental) due to adverse weather conditions and constraints related to aircraft maintenance and breakdowns.
- Azores Airlines, in the first quarter of 2024, carried 286 thousand passengers (+29% compared to the same period last year) and achieved total revenue of 47.1 million euros, which represents an increase of 31.5% compared to the homologous period. The Operating Result before interest, taxes, depreciation, and amortization (“EBITDA”) evolved positively compared to 2023 and 2022, despite being negative by 8.5 million euros. The significant increase in costs with irregularities motivated, largely due to adverse weather conditions, but also due to extremely restrictive Company Agreements and ACMI, contributed to this result. Excluding the increase in these costs compared to 2023 (1.5 million euros), EBITDA would have amounted to -7 million euros.
- SATA Air Açores reached a total of 162 thousand passengers in the first quarter of 2024 (+8.9% compared to the same period last year), with total revenue growing by 10.5% to 21.7 million euros and EBITDA improving by 0.4 million euros compared to the first quarter of 2023, registering a value of -0.8 million euros. Net profit improved by 2.3 million euros, mainly impacted by better operational results and a reduction in financing costs, as a result of the early settlement of the bond loan of 60 million euros in September 2023.
AZORES AIRLINES CONTINUES ON A POSITIVE PATH OF GROWTH IN PASSENGERS CARRIED AND REVENUE. OPERATING COSTS PRESSURE RESULTS
Azores Airlines' sustainable and consistent growth trajectory continues in the first quarter of 2024, as in 2023. Although, as a rule, the first quarter for airlines is the worst of the year, revenues reached 47.1 million euros in the first quarter of 2024, which represents growth of 31.5% (+11.3 million euros) compared to the same period last year and 115.5% (+25.3 million euros) when compared to the pre-pandemic period (2019), proving the trend of strong growth in the airline's activity, based on increased capacity on core routes, more connections and the introduction of new routes.
This revenue growth is supported by the very positive evolution of passengers carried, which, in the first quarter of 2024, grew 29.1% compared to the first quarter of 2023, to 286 thousand (+64 thousand passengers carried), and by the improvement in yield. The number of flights carried out reached 2,095, also representing an increase compared to 2023 and 2019 of +18% and +65%, respectively. The load factor (occupancy rate) improved 7.7 p.p. compared to 2023, reaching 78.5% in the first quarter of 2024.
It should be noted that two new A320neo aircraft entered service with Azores Airlines in the first quarter of 2024. They form part of the fleet renewal plan with state-of-the-art technology, representing a significant leap in terms of operational efficiency and consequent reduction in environmental impact.
Despite the significant growth in revenue(+31.5%), there was a growth in operating costs of 24.6%, to 55.6 million euros (+11 million euros compared to the same period last year), strongly impacted due to the growth in expenses with irregularities (+116.6%; +1.1 million euros), ACMIs (+112.3%; +0.4 million euros), commissions/GDS (+79%; 2.7 million euros), handling (+52.6%; 2.1 million euros), and maintenance (+45.2%; 1.2 million euros).
The increase in costs greater than the increase in revenue impacted EBITDA, which amounted to -8.5 million euros, which compares with -8.8 million euros in the first quarter of 2023.
Earnings Before Interest and Taxes (“EBIT”) shows a decline of 1.9 million euros when compared to the first quarter of 2023, impacted not only by EBITDA, but also by the increase in depreciation related to aircraft caused by the increase of two aircraft when compared to 2023 and an increase in spending on structural maintenance.
Net results amounted to -25.6 million euros in the first quarter of 2024, which represents a deterioration of 2.9 million euros compared to the same period last year. This reflects not only the impacts mentioned above but also an increase in related impairments with the reserves of aircraft lessors and interest on the intergroup loan borne.
Azores Airlines' results continue to not consider any remuneration for carrying out routes under the Public Service Obligations (“OSP's”) between the Autonomous Region of the Azores and the Mainland and Madeira, which have historically presented operating deficits. An international public tender is currently taking place for the above-mentioned OSP's, and Azores Airlines has ensured the maintenance of these routes until October 2024 to guarantee the continuity of the operation and mobility of the Azoreans.
SATA AIR AÇORES IMPROVES ALL ITS FINANCIAL RESULTS, DESPITE THE STRONG PRESSURE ON MAINTENANCE EXPENSES
SATA Air Açores presents an improvement in its performance in the first quarter of 2024, maintaining the trend of growth and recovery of results despite having strong pressure on costs, particularly with aircraft maintenance, the impact of which in the accounts will be accentuated as the throughout 2024.
In the first quarter of 2024, SATA Air Açores carried out 3,210 flights (+67 flights; +2.1% compared to 2023), with the number of passengers carried reaching 162 thousand, representing an increase of 8.9% compared to the same period last year, which translates into an increase in the load factor of 6 p.p. to 74.9%.
SATA Air Açores' total revenue reached 21.7 million euros, +10.5% compared to the same period last year (+2.1 million euros), with EBITDA reaching -0.8 million euros in the first quarter of the year, which represents an improvement of 0.4 million euros compared to the same period in 2023. EBIT, despite being negative, also showed an improvement of 0.5 million euros, reaching -3.4 million euros.
Regarding operating costs, and compared to the same period in 2023, there was a more significant increase in commercial costs (+27%), maintenance costs (+9%), and personnel costs (+8%). It should be noted that SATA Air Açores is carrying out a series of structural maintenance and engine repairs on the aircraft in its fleet for an estimated amount of around 25 million euros in 2024, the impact of which on depreciation will be accentuated over the course of 2024 and following years; however, the financial impact and capital requirements are immediate. To date, around 4.5 million euros have been paid for this maintenance.
In terms of net profit, there was an improvement of 2.3 million euros in the first quarter of 2024 compared to the same period last year, impacted, above all, by better operational results and the reduction in financing costs because of the early settlement of the bond loan of 60 million euros in September 2023.
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Glossary
ACMI: Aircraft, crew, maintenance and insurance (ACMI)
ASK: Available seat kilometer | Seat-kilometer - total number of seats available for sale multiplied by the number of kilometers flown.
Load Factor: The percentage of available seats an airline has been able to sell on its flights during a given period.
(RPK) divided by the total number of place kilometers (ASK).
EBITDA: Earnings before interest, taxes, depreciation, and amortization.
EBIT : Earnings before interest and taxes