Posted on: 26 August 2011 by Ross McSweeny
Atlantic Airways, the national carrier of the Faroe Islands, has reported significantly improved results for the second quarter of 2011, helping the carrier to achieve a significant profit for the first half of the year against a loss for the same period last year.
Atlantic says the result is based on improved aircraft utilisation and comes despite sharp rises in fuel costs.
The company recorded a healthy improvement in sales across a variety of activities, including both charter and scheduled operations, as well as helicopter services. The number of block hours sold on charter and ACMI (aircraft, crew, maintenance and insurance) contracts demonstrated healthy growth, while load factors on scheduled services also improved.
The airline acknowledged that the improvement is due in part to the severe impact on operations in the same period of 2010 caused by the Icelandic volcano Eyjafjallajøkull. There was another eruption in Iceland in 2Q11, which caused some delays, but it did not impact operations like Eyjafjallajøkull.
“The 2Q11 result supports the overall result for the first half year of 2011, which has turned a considerable deficit into a healthy profit,” remarked Magni Arge, chief executive, Atlantic Airways (pictured).
The airline’s EBITDA (earnings before interest, taxes, depreciation, amortisation, and restructuring or rent costs) for 2Q11 was DKK 22.9 million (£2.72m) compared with DKK 11.0 million (£1.3m) for the same period last year – an increase of 107%.
The profit before tax for 2Q11 was DKK 12.1 million (£1.44m) compared with a loss of DKK 1.8 million (£2.14m) in the same period last year – a net improvement of DKK 13.9 million (£1.65m). Revenue increased by 28% to DKK 118.8 million (£14.09m) in the second quarter of 2011 from DKK 92.8 million (£11.01m) last year.
EBITDA for the first half of 2011 (1H11) was DKK 32.2 million (£3.82m) compared with DKK 17.9 million (£2.12m) in 1H10, an increase of 80%. Profit before tax for the first half of 2011 amounted to DKK 9.5 million (£1.13m), compared with a loss of DKK 8.7 million (£1.03m) in 2010.
“In a world of so much economic uncertainty, we remain both humble and jubilant over the good results we have achieved so far in 2011,” Arge continued. “It is a result based on combined efforts to improve business in different segments, improve utilisation and reduce unit costs. We are also encouraged by the growth in sales of block hours as well as the positive trend in tourism traffic.”
Atlantic continues to predict an improved result in 2011 compared with 2010, but the level of improvement will be dependent on factors outside the airline’s control, including fuel prices, the various effects of ongoing global economic uncertainties and the financial crisis in some European regions.