Aeroflot has reported a 40 per cent drop in annual profits, pressured by mounting costs.
Net profit at Russia’s largest airline fell to R23.06 billion ($409 million) in 2017, down from a record of R38.8 billion roubles it had reported a year earlier.
Staff costs at the carrier increased 28 per cent last year, contributing to a 13.8 per cent rise in operating costs to R493 billion roubles.
However, the 95-year-old carrier’s revenues rose 7.5 per cent to R532.93 billion roubles on the back of a record high traffic, which increased 15.4 per cent year-on-year.
Shamil Kurmashov, Aeroflot deputy chief executive for commerce and finance, commented: “Last year was another landmark year for Aeroflot, as the group’s airlines carried 50.1 million passengers, 15.4 per cent more than the previous year.
“We took full advantage of the opportunities offered by the growing passenger transportation market in both the scheduled and charter segments.”
The group continued its sustainable growth on domestic and international routes.
The carrier utilised its significant capacity additions – up 14.2 per cent year-on-year – efficiently, resulting in an increased load factor of 83 per cent, 1.4 per cent higher than in 2016.
Kurmashov added: “Yields came under pressure from a changing competitive landscape and international carriers adding capacity back into the Russian market, while the re-opening of the Turkish market led to structural changes in demand.
“On the other hand, higher oil prices and the change in rouble and currency correlation pattern rate put pressure on fuel costs, a key expense item accounting for 24.9 per cent of operating costs.
“The key tools available to help us manage the impact of these macro factors are an efficient system for purchasing fuel on favourable conditions, as well as continued incremental improvements in fuel efficiency.”