Aeromexico Reports 4Q19 Results

Grupo Aeromexico S.A.B. de C.V. (BMV: AEROMEX), yesterday reported its unaudited consolidated results for the fourth quarter 2019.

KEY FINANCIAL HIGHLIGHTS FOR THE FOURTH QUARTER 2019

  • Grupo Aeromexico’s fourth quarter capacity, measured in available seat kilometers (ASKs) decreased by 4.9% year-on-year, resulting from the temporary grounding of the 737 MAX aircraft.
  • During the quarter Aeromexico reached a partial confidential compensation agreement with Boeing to mitigate the financial impact arising from the temporary grounding of the airline’s Boeing 737 MAX aircraft. The reported financial results reflect certain elements of this agreement. Other elements under the agreement will be accounted for in future years as a reduction in the cost of aircraft, which is expected to decrease depreciation expense.
  • Grupo Aeromexico’s fourth quarter 2019 revenue reached $17.2 billion pesos, a 6.7% year-on-year decrease. During the quarter Revenue per ASK (RASK) in dollars increased by 0.9% and yield in dollars increased by 1.2% compared to the same period of 2018.
  • Year-on-year Cost per ASK (CASK) in dollars decreased by 8.4% and CASK excluding fuel in dollars decreased 8.2%, highlighting Grupo Aeromexico´s ongoing focus on optimizing unit costs.
  • Fourth quarter EBITDAR reached $4.7 billion pesos, an increase of $2.3 billion pesos year-on-year. EBITDAR margin was 27.2%.
  • For the fourth quarter of 2019, Grupo Aeromexico reported an operating profit of $1.7 billion pesos, equating to a 10.1% operating margin. This is a $2.7 billion peso year-on-year improvement compared to the same period of 2018.
  • Aeromexico reported a net loss of $57 million pesos for the fourth quarter 2019 for a negative net margin of 0.3%.
  • For full year 2019, Grupo Aeromexico revenue reached $68.8 billion pesos, a 2.1% year-on-year decrease compared to the same period of 2018. Grupo Aeromexico delivered an operating profit of $2.8 billion pesos, equating to 4.0% operating margin. The Company reported a net loss of $2.4 billion pesos.
  • Fourth quarter cash flow generation was positive with $4.3 billion pesos in incremental cash flow generated from operating activities. Aeromexico´s cash position as of December 31st, 2019 was $9.1 billion pesos. This brings Aeromexico´s cash to last-twelve-month revenue ratio to 13.2%.
  • During the quarter, the Company received four aircraft: one Boeing 787-9 and three Boeing 737-800s. As of December 31st, 2019 Grupo Aeromexico’s operating fleet comprised 125 aircraft, excluding the six Boeing 737 MAX aircraft temporarily grounded. Boeing has expressed that it expects the aircraft to be re-certified by the Federal Aviation Administration (FAA) during summer 2020.