Steep increases in revenues have reduced losses

Published: 5/31/2000

Tyumenaviatrans (TAT's) first quarter figures showed a steep increase in top line revenues, up by 142% to 225.89m rubles and up 94% to $7.92m. The latter reflects a reasonable stabilised dollar/ruble exchange rate after the August 1998 crisis, with average exchange rates for the period of 22.9 rubles/$ Q1 1999 against 28.52rubles/$ in Q1 2000. The reasons for the recovery in revenues are two-fold: - TAT booked $ revenues for international activity (17% of total revenues) in Q1 2000 in contrast to no revenue in the same quarter of 1999. The revenues coming from a variety of contracts for the UN and governments. - Operating performance generally improved ascribed by the airline to increased operating time through more charter work, new flights and better use of aircraft by the helicopter and airline operator. This combined with more attractive tariff packages attracting passengers, up by 66% to 108,420 passengers and increased load factors by 13% to 70%. The difference between the accrued revenues against revenues received under Russian accounting also showed that TAT had been reasonably efficient in getting paid for its business in Q1. They reported that they collected 81.6% of revenues, encouragingly with a high cash component of 94.5%, with the balance in promissory notes. Costs in the period increased by 75% in rubles to 246.18m rubles and 41% in dollars to $8.63m, with fuel costs up by 230% quarter on quarter rising from $520,000 to $1.72m. The costs of in-flight services also increased by 150% in dollars reflecting the airline's efforts to improve service for passengers. Salary costs fell in the period reflecting their payment in rubles, unadjusted for inflation. The airline says that the operating loss of 20.68m rubles in the first quarter is not unexpected and is a significant improvement on Q1 1999 when losses stood at 47.29m rubles. Reflecting the general condition of the air transport market and a quarter that is traditionally soft. It does however, believe the situation will improve as the year progresses and is confident of a full year profit.

Article ID: 1823