airBaltic, the Latvian national carrier, reported financial results for the first half of 2024.
Engines Issues Continue
airBaltic reported the topline revenue figure up 16% YoY to a record approximately EUR 339 million (USD 379 million). This is thanks to the number of passengers carried being up by 11.1%, reaching 2.2 million.
The other component of the revenue growth was the increase in the average ticket price. This follows the focus on medium-haul routes reaching southern parts of Europe, specifically the Canary Islands. The carrier launched a new base in the Gran Canaria in December last year, so the move had a meaningful impact this year.
The carrier still faces two main issues: the conflict in Ukraine impacting the airspace and commerce west of its home bases in the Baltics and the persisting Pratt & Whitney engine issues. The latter issue allegedly impacted the bottom line severely enough this year that the carrier has reported a net loss of EUR 89 million (USD 100 million).
Martin Gauss, President and CEO of airBaltic stated: “We have had a strong first half of the year, driven by an increase in flights and passengers, enhanced efficiency, and a dedicated focus on customer service. Similar to others in the industry, we have faced rising costs and capacity challenges, yet our strategic focus and operational efficiency have allowed us to handle these challenges successfully. Moreover, airBaltic’s performance in H1 demonstrates the airline’s resilience and capability to adapt and thrive in a challenging market environment.”
Management Looks Forward
The temporary issues should not impact the company’s future. In 2023, during the Dubai Airshow, airBaltic placed a firm order for 30 units of the A220 family. The total orderbook, including delivered frames, grew to 80 aircraft.
Now the carrier has placed an order for an additional 10 units. This incremental order puts the airline’s Airbus A220 fleet potentially at 90 units, which is only 10 shy of the 100 that the carrier’s leadership envisioned for by 2030. It will also reaffirm airBaltic as the biggest European operator of the type.
“For the first time in the company’s history, airBaltic plans to operate a fleet of close to 100 A220-300 aircraft, and these exercised options are the next step in the right direction. Over the years, this aircraft type has proven its operational capabilities and value – it has been the backbone of our operations and has played an integral role in the international success story of airBaltic. By exercising these options, we are strengthening our unwavering support and trust in the A220 Programme and are looking forward to our fleet expansion over the upcoming years,” Gauss added.
The reported results and confirmed order are allowing airBaltic to be optimistic about its future. Unfortunately, the reported profitability issues may cause the potential IPO timings to slip into 2025.
