Latest News
HomeAviationIberia lost 21.7 million euros, vs. 6.1 million in 2002 and 65.2 in 2001

Iberia lost 21.7 million euros, vs. 6.1 million in 2002 and 65.2 in 2001

Iberia submitted to the Spain`s Securities Commission its results for the first quarter –a period normally influenced by…

Iberia submitted to the Spain`s Securities Commission its results for the first quarter –a period normally influenced by seasonal factors-as well as its traffic figures for April.



Consolidated net losses for the quarter came to 21.8 million euros, up from the 6.1 million in losses posted in the same quarter of last year, but well below the 65.2 million reported in the first quarter of 2001. The difference from 2002 is explained chiefly by the uncertainty arising from the war in Iraq, even before it began, and the fact that Easter fell in the second quarter this year, while in 2002 it came in March in 2002. Other contributing factors were higher fuel costs, hikes in traffic control fees, and a general impairment of yields, especially in Europe.



This year`s first quarter losses were only a third of those posted in the same quarter of 2001, when Easter also fell in April.



The Iberia Group generated an EBITDAR of 86 million euros in the quarter, signifying a margin over revenues of 8.2%, down from the 12.5% reached in 2002, but 1.4 points higher than the 6.8% margin achieved in the first quarter of 2001.



The worsening of operating results was due in part to the conflict in Iraq and to the weakness of demand associated with the prolonged economic, but the fact that Easter came after the quarter ended is estimated to have diminished first-quarter earnings by 10-12 million euros. Despite the strength of the euro against the dollar, the sharp increase in fuel prices during the build-up to the Iraq war added some 16 million euros to expenditures, while the accrued effect of Eurocontrol air traffic control fees accounted for additional spending of some 12 million euros.



Operating results showed a 50.7 million euro loss in the quarter, which was 44 million euros more than those of the same quarter last year (-6.5 million euros), but 43.5 million euros less than the losses posted in the first quarter of 2001 (-89.8 million euros), when Easter week also came in the second quarter, and fuel costs per passenger-kilometre were also similar –1.08 cents 2003 and 1.10 cents in 2001.



Taken together, financial results, results from group subsidiaries booked under the equity method, and extraordinary results improved in the quarter by 18.9 million euros form the same quarter of last year.



Passenger traffic grew in the quarter by 1.1%, while seat capacity decreased by 1.6%, so the load factor rose by nearly 2 points to 71.7%, reaching 81% on long-haul routes. This improvement, alongside the 15.1% rise in revenues from airport handling and the 20.2% increase in income from aircraft maintenance, enabled the Iberia Group to show a slight improvement in unit operating revenues.



In the domestic market, Iberia carried 144,000 more passengers than in the same quarter of 2002, a 4.5% increase, despite the absence of Easter week in the quarter.



Unit operating costs climbed 4.4% due to higher fuel prices and traffic control fees, and also to higher maintenance and handling expenses associated with the larger revenues mentioned earlier.



The productivity of the Iberia fleet and workforce both showed improvements in the quarter.



Lastly, adjusted net debt rose slightly due to the schedule of investment in new aircraft and to the current asset position, which left the operating cash-flow nearly balanced in the quarter. The Iberia`s Group`s leverage, measured as external funds over total funds, remained at 64% at the close of the year`s most difficult quarter.





Iberia traffic figures for April 2003



In April, 2003 the load factor improved by 3 points from that posted in the same quarter of 2002, reaching 75.5% overall, and this factor was stronger better in all three of the company`s major markets. Seat supply declined by 3.5% under the adjustment programme launched in March, which chiefly affected European routes. Despite this reduction and the negative impact of the weak world economy and the Iraq war, passenger traffic increased by 0.5%, thanks in part to the Easter holiday (which in 2002 fell in the last week in March, and in mid-April this year. The load factor was 1.1% higher this April than in the same month of 2001, when Easter also fell in March.



The number of passengers carried by Iberia rose by 0.5% in the month, thanks to a 1.5% increase in the domestic market, and despite the 0.7% decline on international routes, which was due mainly to the cutbacks in supply.



The domestic load factor reached 74.7%, 2.7 points up from April, 2002, and 3.3 points higher than that of April, 2001). Traffic performed well, especially on routes to holiday destinations, growing by 1.9%, while the supply of seat-kilometres was 1.7% smaller, due to the cutback programme which was modified during Easter week to ensure the supply of seats to holiday destinations.



On medium-range international routes, seat-kilometre supplies were cut by 5.1% for April, 2002, due to the weak market and the war in Iraq. This permitted Iberia to achieve a 1.6% increase in the load factor, reversing the trend of the previous five months. The decline of demand, despite the sluggish European economy, reached only 2.9%.



On long-haul routes the load factor climbed by 3.9 points in April to 77.2%. Passenger traffic increased by 1.6%, while total seat-kilometres offered was cut by 3.5%, a smaller reduction than those of previous months, which had been motivated in part by fewer flights to certain destinations –particularly Venezuela-and to the replacement of the B-747 fleet by A-340s on several transatlantic routes.





Traffic was up by 5.5% in the month on North Atlantic routes, and more frequent flights were made on some of them, as had been planned. This was translated into a 12% supply increase with respect to that of the previous April, which caused a 4.8% reduction in the load factor to about 75%.



On mid-Atlantic routes the load factor rose by 3.3% from April, 2002, to nearly 79%. Selective adjustments to the programme, chiefly involving cancellations of flights to Caracas and changes in the aircraft fleet, brought a supply reduction of nearly 8%, while the decline in the number of passengers carried reached only 4.3%.



In April, 2003, Iberia achieved the largest improvement of the year to date on South Atlantic routes, where traffic grew by more than 14%, while the reduction in seat-kilometres offered came to only 3.6%. This occasioned a nearly 12% improvement in the load factor, which was slightly more than 75%.



Cargo carried by Iberia expressed in tonne/kilometres this April was 1.6% below that of April, 2002, but the trend was plainly towards recovery, since it was the smallest month-on-month decline since last October. The 7.4% rise in the cargo load factor was due to the 12% cut in supply, and also partly to the reduction in cargo hold space associated with greater passenger occupancy.

Co-Founder & Managing Director - Travel Media Applications | Website | + Posts

Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.

29/03/2024
28/03/2024
27/03/2024
26/03/2024
25/03/2024
22/03/2024