Atlantic Airways turnover increases but loss deepens in 1Q14

The 2014 first quarter (1Q14) result for Atlantic Airways, the national carrier of the Faroe Islands, has been announced, with a greater loss than in the first quarter of last year (1Q13).

Revenue increased 5% to DKK 109.1 million in 1Q14 from DKK 104.1 million in the corresponding period in 2013. EBITDA (earnings before interest, tax, depreciation and amortisation) in 1Q14 decreased 67% from DKK 13.4 million in 1Q13, to DKK 4.5 million.

The 1Q14 result before tax (EBT) was DKK –9.6 million, compared with DKK –3.3 million in the same period last year and the result after tax for 1Q14 was DKK –7.9 million, compared with DKK –2.7 million in 1Q13.

The main explanatory factors for the weaker result in 1Q14 are higher leasing costs associated with the fleet renewal, combined with significantly lower charter production than expected, due to the violence in Egypt and consequent advice against travel to Sharm el Sheikh. Furthermore, the seasonal effects of the Easter period (it fell in April this year and March in 2013), higher maintenance costs, costs in connection with the voluntary offer to purchase the outstanding shares not already owned by Føroya Landssty?ri or Atlantic Airways, as well as costs in connection with the review of the strategy haves affected the result negatively.

The supply of seats (ASKs) on scheduled services in 1Q14 was 6% higher than in the corresponding period last year. Passenger load factor decreased from 67% to 63%. Passenger traffic (RPKs) decreased by 1% owing to the seasonal effects of the Easter period.

Atlantic Airways says it expects a much better full-year result after tax in 2014 compared with 2013, but uncertainty regarding flights to Egypt, adverse weather and fuel prices may have a negative impact.

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