Aeroflot announces FY 2020 IFRS financial results

10 March 2021

Moscow, 10March2021 – Aeroflot Group (“the Group”, Moscow Exchange ticker: AFLT) today publishes its consolidated financial statements for the year ended 31 December 2020, in accordance with International Financial Reporting Standards.

Key financial highlights:

  • Revenue decreased by 55.4% year-on-year to RUB 302,182 million;
  • EBITDA amounted to RUB 26,989 million;
  • The net loss totalled RUB 123,208 million;
  • Adjusted net loss totalled RUB 113,135 million.

Andrey Chikhanchin, PJSC Aeroflot Deputy CEO for Commerce and Finance, said:

“In Q4 2020 Aeroflot Group carried 7.1 million passengers, including 6.3 million passengers on domestic routes. This is slightly below the level achieved in Q3, which reflects the adjustment of Group's capacity on the back of seasonal decrease in demand and the impact of second wave of the pandemic. Thanks to positive dynamics and scale of the domestic market, Aeroflot Group in the second half of the year was able to recover about half of the capacity, which ranks as the best result among European airlines, according to a study by CAPA analytical agency. However, the persistence of large-scale restrictions on international flights and closed borders due to the pandemic are significant negative factors that continue to have a decisive impact on the aviation industry in general and on Aeroflot Group in particular.

“Revenue in Q4 2020 amounted to RUB 68.0 billion, 55.8% less year-on-year. Revenue management efforts as well as maintaining an emphasis on cargo transportation helped to slightly slow down decrease of revenue compared to Q3 when it amounted to 60.1% year-on-year. We continued to cut costs, with all key cost lines showing reductions, which helped to contain mounting losses.

“As anticipated net loss in Q4 2020 increased and amounted to RUB 43.8 billion. This reflects the specifics of supply-demand balance in the low season, and consequently lower yields, as well as a number of one-off adjustments, including Rossiya airline goodwill write-off due to a decrease in forecasts on the back of the pandemic. Excluding these adjustments, the net loss amounted to RUB 32.9 billion. Despite the loss, taking into account current operational and economic challenges of air transportation sector and executed flight program, operations of Q4 are financially efficient.

“Outstanding achievements of Pobeda airline are noteworthy at it increased passenger traffic by 7.6% in second half of the year. Despite complete suspension of operations in April and May, as well as decrease in average fares aimed at stimulating demand, the company was profitable on annual accounts. Pobeda is already a large company, there were 34 aircraft in its fleet at the end of 2020. Given the scale of the crisis, when the global industry incurred losses in the amount of USD 118 billion, this result is extremely strong.

“In 2020, Aeroflot Group secured necessary liquidity resources, including funds from secondary public offering in the amount of RUB 80 billion and credit lines in the amount of RUB 70 billion secured by state guarantees, which made it possible to regularly fulfill Group’s obligations.

“The low winter season of the first quarter continues. There are some minor improvements in operating performance, load factors and bookings, but overall the situation remains difficult. In this regard, we maintain a conservative approach to capacity deployment in addition to its seasonal decline.

We continue to look to the future while implementing anti-crisis measures. The transformation of Aeroflot Group has begun: work is underway on intra-group transfer of the fleet, subsidiaries are opening flights on new routes. In the summer season, Pobeda Airlines starts flights from our main hub – Moscow Sheremetyevo Airport. All these changes are aimed at long-term improvement of the efficiency of Aeroflot Group, but we are confident that these steps will have a positive impact on the performance of the current year as well.”

Key operating highlights

Q4 2020 Q4 2019 Change 12M2020 12M2019 Change
Passengers carried, thousand PAX 7,100 13,990 (49.2%) 30,157 60,719 (50.3%)
- international 799 6,161 (87.0%) 5,984 27,118 (77.9%)
- domestic 6,301 7,830 (19.5%) 24,172 33,601 (28.1%)
Revenue Passenger Kilometres, million 14,282 35,985 (60.3%) 68,014 156,253 (56.5%)
- international 2,520 21,191 (88.1%) 21,150 91,401 (76.9%)
- domestic 11,762 14,793 (20.5%) 46,863 64,852 (27.7%)
Available Seat Kilometres, million 19,140 45,476 (57.9%) 92,402 190,856 (51.6%)
- international 3,701 27,433 (86.5%) 30,039 113,766 (73.6%)
- domestic 15,438 18,042 (14.4%) 62,363 77,089 (19.1%)
Passenger load factor, % 74.6% 79.1% (4.5 p.p.) 73.6% 81.9% (8.3 p.p.)
- international 68.1% 77.2% (9.2 p.p.) 70.4% 80.3% (9.9 p.p.)
- domestic 76.2% 82.0% (5.8 p.p.) 75.1% 84.1% (9.0 p.p.)

In 12M 2020, Aeroflot Group carried 30.2 million passengers, 50.3% down year-on-year. The operating results of 12M of 2020 were affected by the dynamics of demand and significant flight restrictions imposed amid the spread of the novel coronavirus infection. The international segment was hit hardest, following the shutdown of international air travel in March. Suspension of scheduled international flights and quarantine restrictions in Russia influenced the decline in traffic indicators. In Q3 and Q4, domestic traffic showed a significant recovery, and in the international segment flights were resumed to a number of destinations, however, in general, international traffic remained significantly limited. In Q4 the impact of the pandemic on airlines complemented the seasonal decline in demand.

Key financial highlights

RUB million unless stated otherwise Q4 2020 Q4 2019 Change 12M2020 12M2019 Change
Revenue 67,969 153,898 (55.8%) 302,182 677,881 (55.4%)
EBITDA (4,191) 27,249 26,989 168,924 (84.0%)
EBITDA margin 17.7% 8.9% 24.9% (16.0 p.p.)
(Loss) / profit for the period (43,802) (6,793) 6.4х (123,208) 13,512
Adjusted (loss) / profit for the period[1] (32,856) (8,348) 3.9х (113,135) 11,957


RUB million unless stated otherwise Q4 2020 Q4 2019 Change 12M2020 12M2019 Change
Passenger traffic revenue 50,133 132,536 (62.2%) 243,708 594,570 (59.0%)
- scheduled passenger flights 46,398 125,951 (63.2%) 225,753 557,132 (59.5%)
- charter passenger flights 3,735 6,585 (43.3%) 17,955 37,438 (52.0%)
Cargo flight revenue 9,635 5,669 70.0% 26,768 19,282 38.8%
Other revenue 8,201 15,693 (47.7%) 31,706 64,029 (50.5%)
Total revenue 67,969 153,898 (55.8%) 302,182 677,881 (55.4%)

In 12M 2020, Aeroflot Group’s revenue decreased by 55.4% year-on-year to RUB 302,182 million.

Revenue from scheduled passenger flights decreased by 59.5% year-on-year to RUB 225,753 million, due to a decrease in passenger traffic as a result of the COVID-19 pandemic.

Cargo revenue rose by 38.8%, to RUB 26,768 million year-on-year as the Company reoriented some of its wide-body aircraft to carry cargo and mail in the baggage compartment as well as in the cabin.

Other revenue decreased by 50.5% year-on-year to RUB 31,706 million.

Operating costs

RUB million unless stated otherwise Q4 2020 Q4 2019 Change 12M2020 12M2019 Change
Depreciation, amortisation and customs duties 31,207 28,281 10.3% 119,142 108,261 10.1%
Staff costs 15,091 25,554 (40.9%) 65,445 92,413 (29.2%)
Aircraft servicing and passenger services 14,783 30,347 (51.3%) 63,623 127,240 (50.0%)
Aircraft maintenance 8,809 6,624 33.0% 29,056 30,566 (4.9%)
Selling, general and administrative expenses 5,423 8,926 (39.2%) 20,578 31,407 (34.5%)
Other net expenses 12,603 9,891 27.4% 19,034 36,455 (47.8%)
Operating costs less aircraft fuel 87,916 109,623 (19.8%) 316,878 426,342 (25.7%)
Aircraft fuel 15,451 45,307 (65.9%) 77,457 190,876 (59.4%)
Total operating costs 103,367 154,930 (33.3%) 394,335 617,218 (36.1%)

In 12M 2020, operating costs decreased by 36.1% to RUB 394,335 million, primarily due to a reduction in operational volumes (capacities decreased by 51.6% year-on-year), as well as due to the implementation of measures aimed at reducing fixed and quasi-fixed costs.

Aircraft fuel costs decreased by 59.4% year-on-year to RUB 77,457 million as flight volumes and flying time decreased and average jet fuel prices were lower.

Excluding fuel costs, operating costs decreased by 25.7% year-on-year to RUB 316,878 million, primarily due to reduced operational volumes and the almost complete suspension of flights in April and May 2020.

  • Staff costs decreased by 29.2% year-on-year to RUB 65,445 million.
  • Expenses related to aircraft servicing and passenger service decreased by 50.0% year-on-year to RUB 63,623 million. At the same time, given our increased focus on passenger safety to prevent the further spread of the virus, the Group introduced additional pre-flight measures and aircraft disinfection.
  • Aircraft maintenance costs decreased by 4.9% year-on-year to RUB 29,056 million, due to lower volume of maintenance works related to flight hours amid reduced operating volumes, which was partly offset by higher one-time payments upon aircraft return to the lessors as well as pre-redelivery engine maintenance expenses primarily in Q1 and Q4 as well as RUB devaluation. At the same time, in Q2 and Q3 2020, aircraft maintenance costs decreased by 45.7% and 31.9% respectively also due to a decrease in the variable component associated with flying time, while expenses on keeping the grounded fleet airworthy continued.

Selling, general and administrative expenses decreased by 34.5% year-on-year to RUB 20,578 million, due to additional measures to optimise general business, consulting and marketing expenses.

Other expenses (net) decreased by 47.8% year-on-year to RUB 19,034 million, due to a decrease in expenses associated with the booking system and flight catering amid lower flight volumes. This line also includes a subsidy from the Russian government. In Q4 growth in other expenses is explained by Rossiya airline goodwill write-off.

Amortisation and customs duties, the largest expense item that is generally independent from operating volumes, increased by 10.1% year-on-year to RUB 119,142 million, primarily due to revaluation of reserves for aircraft maintenance required before return to the lessor following the year-on-year appreciation of the US dollar in 12M 2020.

As a result of these factors, EBITDA totalled RUB 26,989 million.

Non-operating gains and losses

RUB million unless stated otherwise Q4 2020 Q4 2019 Change 12M2020 12M2019 Change
Operating (loss) / profit (35,398) (1,032) (92,153) 60,663
(Loss) / profit from investments, net (200) (1) (557) 357
Finance income 2,062 1,012 2.0x 4,938 5,486 (10.0%)
Finance costs (11,210) (11,225) (0.1%) (47,252) (52,050) (9.2%)
Realised hedging results (2,922) (66) (13,254) (2,368) 5.6х
Other (5,109) 1,490 (5,209) 1,715

In 12M 2020, finance income reduced by 10.0% year-on-year to RUB 4,938 million, primarily due to a decrease in interest income on deposits as a result of lower interest rates.

Finance costs decreased by 9.2% year-on-year to RUB 47,252 million, primarily due to a decrease in leasing interest expenses as a result of lower interest rates, and also due to a decrease in lease liabilities in their respective payment currencies.

The realised loss from hedging amounted to RUB 13,254 million and includes portion of revaluation of lease liabilities of RUB 7,237 million. The depreciation of the rouble during the reporting period led to a revaluation of our debt portfolio. Following the decrease in FX-denominated revenue in accordance with applicable accounting standards, the revaluation is reflected in the Company’s profit and loss account.

Aeroflot Group’s net loss for 12M 2020 amounted to RUB 123,208 million.

Debt and liquidity

RUB million unless stated otherwise 31.12.2020 31.12.2019 Change
Loans and borrowings 88,635 15,792 5.6х
Lease liabilities 662,507 557,124 18.9%
Pension liabilities 792 784 1.0%
Total debt 751,934 573,700 31.1%
Cash and short-term investments 93,775 25,861 3.6х
Net debt 658,159 547,839 20.1%

As of 31 December 2020, total debt increased by 31.1% compared to 31 December 2019, to RUB 751,934 million. The increase was due to the revaluation of lease liabilities as of 2020 year-end following the depreciation of the rouble by 19.3% since the beginning of the year, as well as due to increased leverage to boost liquidity and to finance current operations amid a significant decrease in expected and actual revenues. Successful placement of shares among wide range of investors in October 2020, which contributed RUB 80 billion, was the key driver behind the increase in cash, which amounted to RUB 93.8 billion as of 31 December 2020.

[1] Adjusted (loss) / profit for the period does not include Rossiya airline goodwill write-off, financial result from disposal of subsidiaries, other one-off effects.