Air Astana reported (29-Jan-2013) a 7% year-on-year decline in unaudited profit after tax to USD57.2 million in 2012, despite a 16% increase in revenue to USD870 million. The carrier also reported a 14% capacity growth during the year. Air Astana president Peter Foster stated the full year result was better than expected after a difficult first half in which profit fell by more than 80%. In the second half of the year, strength of CIS markets, the strong performance of new services to China and Hong Kong, and non-fuel savings have made up most of the difference and offset to some extent higher fuel prices, though margins have fallen. Looking forward, Air Astana expects 2013 to be another mixed year with continued cost pressure, though at present markets remain stable. [more – original PR]
Air Astana's full year boosted by strong second half
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Kazakhstan’s Air Astana is increasing its focus on sixth freedom transit traffic as part of a new strategy aimed at capitalising on its low cost structure and geographic position at the crossroads of Asia and Europe. More transit traffic is necessary to unlock a new phase of growth and reduce its reliance on its home market.
Air Astana has nearly doubled its transit traffic over the past year in response to challenging market conditions in Kazakhstan. The Kazakhstan economy has weakened significantly as oil prices have collapsed, leading to rapid currency devaluation that has impacted Air Astana’s top line. The airline’s revenues have fallen 25% since 2013 while passenger traffic has been relatively flat.
Increased sixth freedom traffic, slower expansion and reduced costs have enabled the airline to maintain profitability. A further and bigger transit traffic push is risky but should drive improved scale, a resumption of growth, and a stronger long-term position – which in turn will make Air Astana more attractive as it revisits long-delayed IPO plans.
Monarch Airlines: group receives new cash from Greybull Capital but profit outlook is down
The latest investment in the Monarch Group by its majority shareholder Greybull Capital avoided the loss of its ATOL licences and the possible suspension of operations. Moreover, it has given Monarch the opportunity to bridge the gap between now and the planned delivery of the first of its new 30 Boeing 737MAX aircraft in 2018.
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