- Over 2 million passengers were carried in the year's first nine months.
- Exceptional operational impacts led to increased costs, which impacted the results of SATA Internacional—Azores Airlines, but the company had a positive net result for the quarter.
- SATA Air Açores' cumulative revenue for the year's first nine months increased by 4.9%.
- Measures are underway to improve the Group's economic performance.
Grupo SATA carried 2.1 million passengers in the first nine months of the year, reaching this milestone for the first time in its history. This figure represents a 14% increase compared to the same period last year. Revenue continued the upward trend seen in the previous year, exceeding 350 million euros, an increase of around 17% over the same period in 2023.
Capacity provided increased by 12% compared with the first months of 2023, resulting in an overall increase in the Group's average load factor of 1.5 p.p. to 80.9%.
The occurrence of some exceptional events with a negative impact on operations and the evolution of the operational and regulatory cost structure led to a reduction in consolidated EBITDA to 17.8 million euros in the period to September 2024, compared with 40.4 million euros in the same period last year.
The cumulative net profit to September was negative at 43.6 million Euros, compared to a negative 11.1 million Euros in the same period of the previous year, as a result of the decrease in EBITDA, the increase in depreciation and amortization due to the increase in the available fleet, and impairments. Conversely, the Group's financial expenses improved.
Azores Airlines with positive net result for the quarter and results reflecting increased costs
SATA Internacional—Azores Airlines continued its revenue growth trend, supported by the increase in capacity made available for the IATA summer season. Revenue reached 143.1 million euros in the third quarter, 27.4 million euros more than in the same period last year.
This growth is due to several factors, including a series of operational and commercial initiatives that have made travelling more comfortable, with new routes such as Ponta Delgada - Montreal, Ponta Delgada - Milan and Ponta Delgada - Faro.
This is also the result of the increase in new direct routes between Porto and Funchal to the USA and Canada, via ACMI, which proved unsuitable commercial options, mainly due to the increased costs involved. The latter effect was particularly noticeable in the third quarter of 2024, as the ACMI operation took place between June and September, which was not the case in 2023.
Considering the first nine months of 2024, the company's revenue totalled 278.6 million euros, an increase of 23% compared to the same period in 2023. The significant increase in the number of passengers carried in the third quarter contributed to these figures: around 613,000, an increase of 15% compared to the same quarter in 2023.
The average load factor was 85.7% in the third quarter of 2024, down 1.2 p.p. on the same period last year, as a result of the increase in production with larger aircraft, with a significant part of this reduction resulting from the offer provided by ACMI, which was based on oversized aircraft and had a negative impact on the load factor.
Despite the increase in revenue, operating costs rose in the third quarter, a trend shared by several other players in the sector. After the first half of the year marked by irregularities, mainly due to weather conditions and delays in the completion of maintenance work, Azores Airlines continued to experience high cost pressure.
Operating costs for the third quarter increased by 28.6 million euros (31% more) compared to the same period last year, mainly due to the following factors: 5.7 million euros more in personnel costs; 5.4 million euros more in ACMI costs; and 9.4 million euros more in direct costs such as fuel, handling, and catering.
Earnings before interest, tax, depreciation and amortisation (EBITDA) for the third quarter were positive at 20.6 million euros. The cumulative operating profit for the nine months to 30 September was 15.6 million euros, compared to 24.6 million euros for the same period last year.
Depreciation increased by 2 million Euros (22%) in the third quarter, mainly due to the addition of two new aircraft to the fleet compared to the same period last year. Earnings before interest and tax (EBIT) were also positive in the third quarter at 9.2 million Euros, bringing the year to September to a negative 15.7 million Euros.
Although net income continued to be impacted by high operating and financial expenses, totalling negative 34.9 million euros in the year to September, it was positive by 2.8 million euros in the third quarter.
To reverse the economic results recorded in the first half of 2024, the company has reformulated its operational plan, focusing on its core routes, linking the Azores with mainland Portugal, the diaspora, and the main tourist origins of the Azores (Spain, France, Germany, and Italy).
It has also developed measures to improve operational efficiency, such as reformulating catering, introducing an in-flight sales service, and restructuring SATA's customer service channels. These measures' effects are already visible in controlling operating costs.
SATA Air Açores increases the average load factor.
In the third quarter, SATA Air Açores recorded revenues of 39.1 million euros, 1.8 million euros less than in the same period last year. Cumulative revenue for the first nine months of the year totalled 90.5 million euros (4.9% more than in the same period the previous year), reflecting the growth in demand concerning supply, which led to an increase in the average load factor not only in the quarter compared with the same period last year (81.1% vs 79.3%), but also in the cumulative figures, which rose from 74.5% to 77.5% in the first nine months of the year.
The increase in costs is mainly due to the rise in personnel costs (+ 2.6 million euros, 18.1%) and irregularities/compensation and ACMI of 1.8 million euros compared to the third quarter of 2007, as well as aircraft maintenance costs of approximately 2.1 million euros (+ 82%), resulting from unscheduled maintenance events and charges for engine rentals necessary for the continuity of operations.
The result of these factors is an increase in accumulated operating costs to September 2024 of 87.9 million euros, 19% higher than the same period in 2023. The increase in revenue and the improvement in the load factor indicators reflect the increase in the number of passengers carried: 21,000 more passengers (6% more) in Q3 2024 compared with Q3 2023 and 44,000 more passengers (6% more) accumulated to September compared with the same period in 2023.
The increase in revenue was not enough to cover the increase in operating costs, which increased by €6.6 million (+23.1%) in Q3 2024 compared to the same period in 2023, and by €13.9 million in the first nine months of 2024 compared to the same period last year, putting additional pressure on the company's EBITDA.
Considering the cost increase over revenues, the operating result before interest, taxes, depreciation and amortisation (EBITDA) deteriorates compared to 2023, amounting to a positive € 3.8 million in Q3 2024, compared to a positive € 12.3 million in Q3 2023. In the first nine months of 2024, EBITDA was positive by 2.6 million euros, compared to 12.2 million euros in the same period of the previous year.
The net result for the third quarter was positive at 800,000 euros, although heavily burdened by the reduction in EBITDA compared to the same quarter in 2023 (5.8 million euros). In cumulative terms, the net result was a loss of 8.2 million euros, compared with a loss of 5.6 million euros in the same period last year, despite a significant reduction in financial charges (impact of the early repayment of a 60 million euro bank loan in September 2023).
It is also worth mentioning the measures implemented by the company to reverse the economic results achieved in the first half of 2024, namely maximising revenues and adopting measures to contain expenses and stabilise maintenance costs. The effects of these measures are already visible in the control of operating costs.
SATA Gestão de Aeródromos increases revenues by 7%.
SATA Gestão de Aeródromos recorded an increase in revenue from airport operations, in line with the increase in traffic at the airports of the Autonomous Region of the Azores, mainly due to the increase in production at SATA Air Açores. Sales and services provided totalled 3.1 million euros in the first nine months of the year, compared with 2.9 million euros in the same period last year, an increase of +7%.
It should be noted that, in addition to the sales and services provided, an estimate of the financial rebalancing of 896 thousand euros has been recorded, which relates to the period of the concession contract's fourth year of operation.
Operating costs totalled 4.2 million euros, an increase of 265 thousand euros, or +7%, over the same period last year.
The increase in revenues was greater than the increase in costs, resulting in an increase in EBITDA. EBITDA was negative by 184 thousand euros, an improvement of 828 thousand euros compared to the same period last year.
The company's net result continued to improve, from a loss of 777 thousand euros to a loss of only 11 thousand euros.
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Glossary |
CASK: Cost per available seat kilometre, operating costs divided by seat kilometres.
Rask: Revenue per available seat-kilometre, operating revenue per seat-kilometre offered - operating revenue divided by the total number of seat-kilometres offered.
ASK: Available seat kilometres - total number of available seats multiplied by the number of flown kilometres.
Load factor: Total revenue passenger kilometres (RPK) divided by total available seat kilometres (ASK).
EBITDA: Earnings before interest, tax, depreciation and amortisation.