airBaltic, Latvia’s state-owned airline, has reported this Wednesday (15) a net profit of EUR9.1 million in the first nine months of 2023. Over EUR510.6 million in revenues, that represents a net margin just below 1.8%, and it compares to a net loss close to EUR125 million (over EUR362.5 million in revenues) in the same period of 2022.
Operationally, the EBIT — profit net of interest and taxes, as well as «provisions for legal disputes» — was at EUR47.9 million, versus negative EUR81.3 million in the first nine months of 2022.
The improvement in operational margins, the airline said in its financial statements, was «primarily driven by the high margin [ACMI] lease revenue and efficient sale of the network capacity». airBaltic’s ACMI business, whereby the airline wet-leases its aircraft to other companies, has grown strongly since 2019, now representing 16% of its revenues in the first nine months of 2023, and delivering «significantly higher EBITDAR margins than the passenger revenue».
«During the 2023 summer period, traditionally the peak for the aviation industry, airBaltic benefited from an uplift owing to escalating demand for both leisure and business travel, amplified by the strategic expansion of our network», said the airline’s President and CEO, Martin Gauss, in a press release.
«airBaltic retains its status as the premier airline in the Baltics, continuously developing essential connectivity from our home cities of Riga, Tallinn, Vilnius, and Tampere. As the main connectivity provider to and from the region, we are committed to providing our home markets with the best possible air travel services. We continually enhance the overall passenger experience and make a significant contribution to the region’s economy».
By the end of the year, airBaltic expects to have 46 Airbus A220-300 in its fleet, with the four remaining aircraft of its initial order to be delivered in 2024, with another agreement signed this week in Dubai growing the fleet to 80 by late 2029 and with options for another 20 units.
With a EUR200 million Eurobond due in July 2024, airBaltic is preparing a refinancing plan for the beginning of next year, as the airline’s cash position stood at EUR33.7 million by the end of September 2023. According to the airline, multiple options were presented, including private financing, as well as public market and engagement with the shareholders on market terms.
Also this Wednesday airBaltic announced a codeshare agreement with Delta Air Lines, effective from November 22. Aimed at the demand between North America and the Baltics, the partnership will have Delta placing its code in 20 routes operated by airBaltic connecting European gateways to the three Baltic capitals, Riga, Tallinn and Vilnius.
«This marks a historic achievement for airBaltic and Latvia, as we embark on expanding our network across the Atlantic Ocean», stated Gauss in another press release. «The collaboration with the renowned US partner Delta Air Lines, known for its expansive network and international cooperation infrastructure, holds tremendous opportunities. It will not only attract new passengers to airBaltic, but also elevate the Baltics’ global visibility and connectivity. We are looking forward to a successful, long-standing collaboration together.»
