First-half figures show 226% growth and continue trend set earlier this year (420 words)

Published: 8/23/2000

Tyumenaviatrans (TAT), Russia's largest helicopter operator, reported their first half figures and surprised many by showing a substantial improvement in their figures under Russian Accounting Standards, continuing the trend set at their first quarter figures in May. Sales showed a growth of 226% in rubles to 894.8m rubles and 171% in dollars, with operating costs rising by a modest 76% in rubles and 47% in dollars, creating an operating profit of 272.6m rubles and a net profit of 250.6m rubles. The reason for the dramatic recovery for the Surgut-based carrier, was primarily the company's receipt of dollar denominated revenues from its international activities, which were not present in the airline's very poor first half of 1999. Particularly helpful was revenue from the United Nations, which leased a number of new helicopters from the airline including one Mi-26 for service in West Africa. In the first half, international business contributed $10.1m to the company turnover compared with nothing in the same period last year. The airline also saw a top line recovery in its scheduled domestic flights operation, where revenues increased from $5.9m to $10.9m. Recoveries in other areas of operation such as charter, which improved from $0.6m to $2.1m and additional revenues for government contracts, which rose from $4.3m to $6.5m, all helped to boost the top line. At the operating level TAT reported that it has increased its aircraft utilisation, with hours flown up by 36%, and believes that its improvements in service and tariff structure attracted passengers back to the airline. Passenger numbers for the period saw an increase of 62% and load factors grew by 8% to 67.4%, which in Russian terms is something of a result. RPK rose by 57% to 432.7, as did RTK by 54% to 41.8. Despite dramatic increases in the cost of fuel 135% first half on first half, the airline generally kept cost growth under control, helped by the fact that they are primarily ruble-denominated. Although in contrast to the results of the first quarter, wage costs rose 18% reflecting the need for wage rises to compensate for inflation. The Russian media has made a good deal about the recovery at TAT in the first half, but it is important to remember that while the airline is experiencing a recovery in its domestic traffic, the lucrative dollar denominated international market is competitive and fluctuates dramatically as was shown by the international contribution in the first half of 1999.

Article ID: 2020