This year, the Latvian national airline “airBaltic” group made a loss of EUR 48.503 million in the nine months of this year, compared to the profit in the corresponding period a year earlier, said the president and CEO of “airBaltic” Martins Gauss in the call to investors of “airBaltic”. At the same time, the planned changes to the law provide that he will be able to apply for a salary supplement, unlike many other people working in the boards and councils of state-owned companies.
Martins Gauss received 828,942 euros in salary last year, according to his official income declaration for 2023 submitted to the State Revenue Service. This year, most likely, his salary will be about the same, because he emphasized that his salary has not changed for three years while visiting the LTV program “One on One”. However, next year M. Gauss will probably be able to claim a salary supplement of more than 20,000 euros, in contrast to many other managers of state and local government companies, whose salary will be frozen for two years according to the planned amendments to the law. The planned changes in the law provide that the salary will not be frozen for those working on the boards and councils of the state company, whose remuneration was not increased this year and last year. It is this reservation that will allow M. Gaus to claim a salary supplement.
The results of the third quarter are encouraging
“airBaltic” profit in the third quarter is 40.3 million euros. Also, the highest ever third quarter revenues were achieved – 236 million euros, which is an increase of 8% year-on-year. Good performance indicators have been ensured by a record number of seats, an increase in the number of flights, operational efficiency and a successful aircraft leasing strategy, informs the corporate communication department of “airBaltic”.
In the first nine months of 2024, “airBaltic” transported 3.8 million passengers, which is 11% more than in the corresponding period of time in 2023. Seat occupancy in the third quarter was 87.8%, which is six percentage points more than a year earlier. “airBaltic” increased the number of passengers carried by 12% in the third quarter, while the number of flights performed increased by 5% (not including ACMI or lease flights).
“airBaltic” earned record revenues in the nine months of this year – 575.3 million euros, which is an increase of 13% year-on-year. Also, the highest ever adjusted EBITDAR profit was achieved – 158.1 million euros in nine months, which is an increase of 21% compared to the year.
“Our record high results in the third quarter and the first nine months of 2024 show the effectiveness of the “airBaltic” strategy and our focus on core business excellence, expanding the route network, as well as improving the quality of customer service.
With 140 routes, including 22 additions by the end of this year, and agreements with 24 cooperation flight partners, we have significantly increased the connectivity options for our passengers, if we compare with last year,” M. Gauss commented on the results.
How much did the company earn from leasing the planes?
In the third quarter of 2024, up to 17 airBaltic aircraft were leased to Lufthansa Group airlines based on the ACMI agreement, in accordance with the airline’s strategy to develop ACMI-out services. Thus, ACMI’s share of revenue reached 22% of total revenue for the third quarter of 2024, according to the report.
At the same time, the “airBaltic” report explains that in the third quarter of 2024, nine aircraft were taken out of service due to engine problems, which also resulted in increased ACMI and engine rental fees. At the same time, the company received significantly more financial support from Pratt&Whitney compared to the previous two quarters to offset these disruptions.
“airBaltic” has expanded its aircraft fleet
“airBaltic” also mentions the expansion of its fleet as an important success. In August, the airline used the purchase right to purchase 10 more Airbus A220-300 aircraft and changed their delivery schedule. In September, “airBaltic” extended cooperation with “Lufthansa Group” for the next three years. In the new lease agreement, which will enter into force in the summer season of 2025, up to 21 aircraft will be leased to the company.
“airBaltic” and “Pratt & Whitney” signed a long-term maintenance contract in September for the airline’s aircraft equipped with geared turbofan engines, or GTF (geared turbofan), and it is structured on a flight-hour rate model, ensuring greater transparency and predictability in maintenance planning .
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Ah, Latvia! The place where the borscht is hot, and the airline industry is… well, hotter than a sauna in summer! Let’s dive into the glamorous world of "airBaltic" and figure out how they’ve gone from an airliner flying high to facing a bit of turbulence.
So, airBaltic made a whopping loss of EUR 48.5 million in the first nine months of this year. Now, let’s not get our knickers in a twist—last year, they were swimming in profits, like ducks in a pond. The President and CEO, Martins Gauss, seems to be in a bit of a pickle, doesn’t he? But given that he’s set to potentially pocket a salary supplement—while most other board members’ pay is getting frozen like a leftover Christmas dinner—he might just be popping open a bottle of champagne.
Now, focusing on the figures, can we talk about Gauss’s salary? Last year, he raked in a mind-boggling EUR 828,942, and next year he might NOT be flying in a different direction regarding his paycheck. Who knew a legal loophole could be so… ahem lucrative? “Your salary is frozen” sounds like something I’d hear at a village dance gone wrong. Just don’t let the employees catch wind of it or we might see some serious turbulence in the workplace!
But wait—a light at the end of the runway! In the third quarter, airBaltic managed to chug along with a profit of EUR 40.3 million. That’s right, folks! It appears the airline has been busy serving passengers and packing those seats tight like sardines in a can. A staggering 87.8% occupancy rate—let’s just hope they’re not charging for legroom!
By the way, speaking of planes and profits, they transported 3.8 million passengers this year, and quite honestly, if they keep this up, I’d expect each passenger to come with a share of the profits to ease that EUR 48.5 million loss! I guess flying right now is the closest thing you’ll get to a lottery win.
Now, let’s talk fleet expansion! airBaltic is growing faster than a teenager at a buffet. They’ve ordered ten more Airbus A220-300 aircraft, because why not dive deeper into the aviation game? Do they have a secret deal with a manufacturer or a love potion? Whatever it is, they’re embracing it like a security blanket!
But it’s not all sunshine and rainbows. Engine problems? Nine aircraft out of action, you say? That’s more drama than a reality show! Yet, fear not! With financial support from Pratt & Whitney, it’s like the airline has a fairy godmother making all the engine woes go “poof”! Even Cinderella would be impressed.
In conclusion, airBaltic’s got quite the rollercoaster ride going on—losing money but still managing to hit the high notes in passenger numbers and revenues. Will they actually maximize profitability, or will they be stuck in the holding pattern? Only time will tell!
And remember, folks, next time you’re booking your flight, just might be worth it to keep an eye on the airline’s health—because if their finances go south, your vacation might be grounded before you even pack your flip-flops!
In a concerning financial development, the Latvian national airline “airBaltic” group reported a significant loss of EUR 48.503 million during the first nine months of this year, a stark contrast to the profit achieved during the same period last year. This critical information was disclosed by the president and CEO of “airBaltic,” Martins Gauss, during a recent investor call. Despite this financial setback, upcoming legal changes will potentially enable Gauss to apply for a salary supplement—a privilege not available to many other executives in state-owned enterprises.
According to his official income declaration submitted to the State Revenue Service, Martins Gauss’s salary for the previous year was 828,942 euros. He noted during an appearance on the LTV program “One on One” that his salary has remained unchanged for the past three years. However, due to new legal amendments, Gauss may soon be eligible for a salary supplement exceeding 20,000 euros—a stark difference from the situation of many other managers in state-owned and local government companies, whose salaries are set to be frozen for the next two years. This upcoming legislation stipulates that while salaries for most public sector executives will be frozen, those working on the boards and councils of state companies, whose compensation has not increased in the previous two years, will be exempt.
The results of the third quarter are encouraging
“airBaltic” achieved a remarkable profit of 40.3 million euros in the third quarter. The airline also celebrated its highest-ever quarterly revenue, reaching 236 million euros, marking an 8% increase compared to the previous year. The impressive financial results were driven by several factors, including a record number of available seats, an increase in flight frequency, enhanced operational efficiency, and a successful aircraft leasing strategy, as reported by the corporate communication department of “airBaltic.”
“airBaltic” transported an impressive 3.8 million passengers in the first nine months of 2024, an increase of 11% compared to the same period in 2023. The seat occupancy rate for the third quarter stood at an impressive 87.8%, which represents a significant six percentage points increase from the prior year. In this same quarter, “airBaltic” increased the number of passengers carried by an impressive 12%, coupled with a 5% rise in the total number of flights conducted (excluding ACMI or lease flights).
“airBaltic” recorded unprecedented revenues in the first nine months of this year, totaling 575.3 million euros—a remarkable 13% year-on-year increase. Moreover, the airline achieved its highest-ever adjusted EBITDAR profit of 158.1 million euros over the nine-month period, reflecting a substantial 21% growth from the previous year. “Our record high results in the third quarter and the first nine months of 2024 demonstrate the effectiveness of the ‘airBaltic’ strategy, our dedication to excellence in core business functions, the expansion of our route network, and our commitment to enhancing customer service,” Gauss stated with pride.
With an impressive portfolio of 140 routes, including an additional 22 to be added by year-end, “airBaltic” has substantially enhanced travel connectivity options for passengers, a testament to the airline’s relentless focus on growth and improvement.
How much did the company earn from leasing the planes?
During the third quarter of 2024, “airBaltic” successfully leased up to 17 aircraft to Lufthansa Group airlines under ACMI agreements, aligning with the airline’s strategic objectives to expand its ACMI service offerings. This arrangement allowed ACMI to contribute to 22% of “airBaltic” total revenue for the quarter, demonstrating the significance of this revenue stream.
However, it is important to note that in this same quarter, nine aircraft were temporarily taken out of service due to engine issues, which led to an increase in ACMI and engine rental costs. Fortunately, the company received considerable financial support from Pratt & Whitney, compared to the previous two quarters, which helped mitigate the disruptions caused by these challenges.
“airBaltic” has expanded its aircraft fleet
Another noteworthy achievement for “airBaltic” is the expansion of its aircraft fleet. In August, the airline exercised its purchase right to acquire an additional 10 Airbus A220-300 aircraft, simultaneously adjusting their delivery schedule to accommodate growth needs. Furthermore, in September, “airBaltic” extended its cooperation agreement with the Lufthansa Group for an additional three years, solidifying a new lease agreement that will see up to 21 aircraft leased to the airline starting in the summer season of 2025.
Additionally, “airBaltic” and Pratt & Whitney solidified their partnership by signing a long-term maintenance contract for the airline’s aircraft equipped with geared turbofan engines. This contract, structured on a flight-hour rate model, will enhance transparency and predictability in maintenance planning, ultimately supporting the airline’s operational resilience.
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What role do ACMI agreements play in airBaltic’s financial stability amidst operational challenges?
E of these partnerships in bolstering the airline’s financial stability amidst challenges. The income generated from these leasing agreements, alongside the robust passenger numbers and operational efficiencies, has positioned airBaltic to navigate the turbulent conditions affecting the aviation sector due to engine related issues and other operational hurdles.
As airBaltic continues to expand its fleet and enhance its service offerings, including the introduction of new routes and increased flight frequencies, the diversification of revenue streams through ACMI agreements plays a crucial role in strengthening its overall business model. This strategic move not only aids in capitalizing on surplus capacity but also affirms the airline’s commitment to maintaining operational excellence and financial health in a competitive market.
while airBaltic faces challenges, particularly with engine reliability impacting some of its fleet, the airline’s proactive strategies—including fleet expansion, strategic partnerships, and diversified revenue generation—illustrate its resilience and dedication to providing exceptional service to its passengers and ensuring long-term viability in the aviation landscape. With positive trends in passenger numbers and innovative leasing strategies, the future holds potential for recovery and growth as airBaltic navigates these complexities.
