Operating and financial performance 2022

SATA Group's airline companies achieved record revenues in 2022

 

• Both SATA Group's companies – SATA Internacional Azores Airlines and SATA Air Açores – are on a path of growth, achieving record results in terms of revenues.

• SATA Internacional Azores Airlines had its best Revenue year, amounting to 211.1 million Euros, and reached its first positive EBITDA* in 10 years. The prospects for 2023 are positive in revenue growth, considering that in the first half of 2023, Revenue growth, reflected in ticket bookings (forward bookings), is 40% higher than that recorded in the same period of 2022.

• SATA Air Açores also had its best Revenue year ever, which amounted to 92.2 million Euros, with an EBITDA of 7.8 million Euros, having invested in the growth of the interisland fleet.

 


 

SATA INTERNACIONAL – AZORES AIRLINES CONTINUES ON THE PATH OF RECOVERY, OBTAINS RECORD REVENUES, AND ACHIEVES ITS FIRST POSITIVE EBITDA IN TEN YEARS.

The airline SATA Internacional-Azores Airlines continues its road to recovery at all levels and achieved, in 2022, its best year of Revenue ever, 211.1 million Euros. This value, which for the first time exceeds the reference of 200M Euros, represents a growth of 34.2% compared to the pre-pandemic year of 2019 and 107.5% compared to 2021 (a calculation that already excludes the support received in 2021, referring to Covid-19).

The basis of this evolution is the record number of passengers carried by the airline in 2022, which for the first time surpassed the 1 million passenger mark, reaching 1 million, eighty-three thousand passengers (1,083M), which represents a growth of 14.5% compared to 2019 and 67% compared to 2021. The NPS – Net Promoter Score metric remained extremely high, above 50ppts (percentage points), reflecting the good operational work and focus on the customer, despite the increase in passengers and the expected pressure on passenger satisfaction.

The analysis also results in healthy growth in average Revenue per passenger, 4% more compared to 2019 and 24% more compared to 2021.

Likewise, the offer continued to grow, with a 26% increase in flight hours compared to 2021, which allowed it to attract new tourist markets to the Autonomous Region of the Azores (RAA). The load factor (occupancy rate) evolved to 75% per year, which meant an increase of 9 ppts (percentage points) compared to 2021, although still 4 pts (percentage points) below the 2019 value. The growth in Revenue, much higher than the growth in Total Costs, made it possible to reach an Operating Income before Interest, Taxes, Depreciation, Amortization, and Restructuring Costs of 5.403 million Euros, a positive result for the first time in the past ten years. This value also represents an improvement of 27.7 million Euros compared to the pre-pandemic year of 2019 and 12.6 million Euros compared to 2021.

The improvement in EBITDA was, nevertheless, conditioned by several factors, among which the following stand out:

i) the significant growth in fuel costs(+37.6 million euros compared to 2019 and +51.9 million euros compared to 2021); ii) costs associated with combating the pandemic, which remained in the 1st quarter of the year; iii) the severe disruptions in supply chains that occurred throughout the year; iv) the constraints verified at several airports where Azores Airlines usually operates; v) the devaluation of the Euro against the US dollar. Azores Airlines continues to suffer from the operating deficit of the Public Service Obligations (PSO) routes between, without any financial compensation, the mainland and the islands of Pico, Faial, and Santa Maria and between Ponta Delgada and Funchal. Net Profit of negative 34.2 million Euros, improved by 21.6 million Euros compared to 2019 and by around 16.1 million Euros compared to 2021, is conditioned by restructuring costs and debt costs arising from additional bank financing incurred to face the pandemic and meet the restructuring process, and purely accounting items.

Despite the adverse context, the performance of Azores Airlines continued to meet the objectives defined in the Restructuring Plan agreed upon with the European Commission. The prospects for 2023 are positive in revenue growth, considering that in the first half of 2023, Revenue growth, reflected in ticket bookings (forward bookings), is 40% higher than that recorded in the same period of 2022.

 

SATA AIR AÇORES ACHIEVED RECORD REVENUES OF 92.2 MILLION EUROS IN 2022 AND EBITDA OF 7.8 MILLION EUROS IN A YEAR OF GROWTH OF ITS INTER-ISLAND FLEET

The airline SATA Air Açores achieved, in 2022, its best Revenue year ever, which amounted to 92.2 million Euros. This value represents a growth of 9.3% compared to the pre-pandemic year of 2019 and 11.9% compared to 2021. The basis of this evolution is the record number of passengers transported in 2022, an amount greater than 837 thousand passengers, which represented a growth of 32.2% compared to the previous year, and 9.2% compared to 2019.

The year was marked by the growth of the regional airline's fleet, which now operates with seven (7) aircraft for the first time in its history. The addition of an additional aircraft was determined by the growth in interisland traffic, considering the development of the Azores tariff and the increase in the number of visitors to the Autonomous Region of the Azores.

In 2022, SATA Air Açores operated 2,914 more interisland flights compared to 2021 (+20.2%) and 2,024 more compared to 2019 (+13.2%), with healthy growth in average Revenue per passenger (25% more compared to 2019 and 24% more compared to 2021). The load factor (occupancy rate) evolved to 73% per year, which meant an increase of 5ppts (percentage points) compared to 2021, although still 5ppts below the 2019 value.

This consequent growth in Revenue amortized the cost of introducing the new aircraft in the summer and allowed the continuity of its operation for the rest of the year. The airline reached an Operating Income before Interest, Taxes, Depreciation, and Amortization of 7.8 million Euros. This amount is less than 2019 by 7.5 million Euros and 2021 by 5.9 million Euros.

In addition to the costs of introducing a new aircraft, the Operating Income was conditioned by: i) the significant increase in fuel cost (+5.2 million Euros compared to 2019 and +5.9 million Euros compared to 2021); ii) the costs of fighting the pandemic in the 1st quarter, the serious disruptions in supply chains; iii) the devaluation of the Euro against the US dollar. Net Profit of -2.5 million Euros, improved by 4.3 million Euros compared to 2021.

The Net Result at SATA Air Açores was marginally conditioned by purely accounting items and influenced by restructuring costs and the costs of the additional debt destined to face the pandemic.

 

OUTLOOK FOR 2023|

Overall, the prospects for 2023 are positive for the two airlines in the group.
For 2023, it is estimated that the greatest risks may come from factors external to the organization. Instability in financial markets with possible impact on demand and price volatility of factors in international markets stand out.
Currently, in terms of Costs, fuel price has been slightly below of previous year. The end of the emergency period, which occurred in December 2022, and the consequent end of salary cuts at both airlines, will have a material impact on the current year's accounts.