Page 149 - RusRPTSept21

vs. 2Q19), while passenger turnover was up 5x to 12.2bn RPK (52% decline vs. 2Q19) and a 25.3ppt YoY increase in the PAX load factor to 72% over the period (6.6ppt decline vs. 2Q19). The company saw strong performance in domestic passenger turnover, which decreased only 2.1% compared to 2Q19, international passengers turnover dropped 75.6% vs. 2Q19. Compared to 2Q19, the company saw a 34.4% decline in its top line, while the gross loss stood at RUB4.2bn compared to gross profit of RUB2.5bn in 2Q19 and a net loss of RUB1.4bn in 2Q21 vs. net income of RUB2.7bn in 2Q19.
Russia's national air carrier Aeroflot Group showed PAX traffic growth of 80% year on year to 5.2mn in July 2021 (31.4-fold y/y jumps to still negligible 0.9mn PAX for international flights and 50.4% y/y growth to 4.3mn PAX for domestic flights).
Compared to July 2019 (before COVID-19), Aeroflot Group’s PAX traffic was still down 18.7% y/y in July (-69.3% y/y for international flights and +21.4% y/y for domestic flights).
bne IntelliNews already reported that while Russian domestic air traffic has recovered, high-margin international routes still lag significantly behind.
"The pace of recovery in July started to slow compared to June, when it increased 2.8x to 4.6mn PAX," Sova Capital commented on August 24. The analysts maintained a Hold rating on Aeroflot's shares, anticipating the publication of 2Q21 IFRS results on August 30 and expecting PAX turnover in 3Q21 still to be 31% lower than in 3Q19.
Most recently, BCS Global Markets analysts have cut the 12-month target price for the shares of Aeroflot due to a slower than anticipated recovery in international routes amid the new coronavirus (COVID-19) wave and slow vaccination rollout in Russia.
However, as the outlook for 2H21 remains solid, BCS GM has maintained the Buy recommendation intact with an estimated return of 7%.
VTB Capital (VTBC) analysts also argued that the domestic potential of low cost airline Pobeda continues to be the cornerstone of Aeroflot's development and "the major reason for long-term investment into the name.”
149 RUSSIA Country Report September 2021 www.intellinews.com