UTair, a prominent Russian airline, reported a staggering net loss of 7.05 billion rubles for the year 2024, according to its financial statements prepared under International Financial Reporting Standards (IFRS). This marks a sharp decline from the previous year's profit of 2.8 billion rubles, highlighting the challenges faced by the airline amid rising operational costs and economic instability.
In 2024, UTair's revenue rose to 113.3 billion rubles, reflecting a 14% increase from the previous year. The bulk of this revenue came from regular flights, which accounted for over 65 billion rubles, while charter flights contributed only 17.8 billion rubles. Geographically, the airline's domestic operations generated a significant 84.2 billion rubles, with international operations bringing in 29.1 billion rubles.
Despite the increase in revenue, UTair's operating profit decreased by 17.5% to 8.3 billion rubles. Financial expenses surged by 27.3% to 7.6 billion rubles, primarily due to an increased debt burden. The airline also reported a loss from impairment of assets amounting to 3.2 billion rubles, a stark contrast to 2023 when no such losses were recorded.
The challenges facing UTair are compounded by a significant decline in equity, which fell by 37.4% to 14.4 billion rubles. Long-term liabilities increased by 7.5% to 67.7 billion rubles, while short-term liabilities saw a substantial rise of 29.8%, reaching 48.2 billion rubles. The deficit of retained earnings ballooned to 18 billion rubles, up from 9.1 billion rubles in 2023.
The primary factors contributing to UTair's financial losses include rising costs associated with debt servicing and leasing, impairments of fixed assets, and the broader impacts of sanctions and macroeconomic instability. The airline's financial report indicated that the formation of the net loss was largely due to the recognition of impairment of other fixed assets and an increase in financial expenses.
Experts suggest that while UTair maintains operational profitability, its financial position is severely strained by its debt obligations and external economic pressures. The airline's management is now tasked with navigating these challenges and focusing on liquidity management and cost optimization as key priorities for 2025.
In a notable development, UTair also liquidated its subsidiary in South Africa in January 2024. This subsidiary, likely UTair South Africa, was involved in helicopter maintenance and cargo transportation. The decision to close this operation was reported to have had no significant impact on the overall financial results of the group.
As UTair moves forward, the focus will be on addressing its liquidity issues and optimizing operational costs to stabilize its financial health. The airline's ability to adapt to the current economic climate will be crucial in determining its future viability in the competitive aviation market.
In summary, UTair's financial results for 2024 paint a picture of an airline grappling with significant challenges despite a rise in revenue. The loss of over 7 billion rubles underscores the precarious nature of its financial standing, prompting urgent action from management to reverse its fortunes in the coming year.
