Avianca group announces second quarter 2023 financial results

$271.3 million in EBITDAR with a 24.3% margin.

Strengthened balance sheet achieves $1,013.2 million in total liquidity.

Strong operational performance enabled robust financial results despite seasonally challenging quarter.

Bogota, Colombia, August 4, 2023 – Avianca Group International Limited affiliated passenger airlines (“AGIL” or “the Group”) today reported second quarter 2023 results. The Company reported $271.3 million in EBITDAR, outperforming Business Plan projections by $88.7 million. Strong passenger revenue performance during the quarter resulted in a $6.5 cent passenger revenue per available seat kilometer; a 27.4% increase relative to Business Plan projections. Passenger Cost per Available Seat Kilometer excluding fuel (Pax CASK ex-fuel) was 3.9 cents during the quarter; a 14.6% decrease year on year. Avianca generated $84.8 million in cash, reaching $1,013.2 million in total liquidity at June 30, 2023.

 “We continued our strong execution on the Business Plan in a seasonally challenging quarter,” said Adrian Neuhauser, Avianca’s Chief Executive Officer. “Avianca completed its narrowbody densification program in record time, which further optimized our cost efficiency, enabled increased capacity allocation, and continued to reduce our per passenger carbon footprint. Our commitment to regional connectivity led us to launch eight new routes, to now offer 144 routes in 71 destinations, while strengthening Avianca’s customer experience – Cirium recognized Avianca as the world’s most punctual airline for both May and June. I would like to thank our stakeholders for their collective power in driving our success. I’m proud of the tremendous job the Avianca team has done navigating our transformation and would like to recognize their continued commitment to delivering a safe, standard, and reliable service, which is resonating in our results.”

Second Quarter 2023 Highlights

• Avianca Group and its subsidiaries’ consolidated capacity, measured in Available Seat Kilometers (ASK), reached 13,270.8 million in the second quarter 2023; a 22.1% year on year increase. The Group transported 7.7 million passengers during the period; a 17.7% year on year increase.

• Amid the sector's crisis, Avianca remains committed to supporting Colombia increasing its domestic offering and thereby contributing to the country’s connectivity and the strengthening of the sector. Further, Avianca transported 221.700 Viva and Ultra customers, 190,800 free of charge.

• Second quarter 2023 total operating revenue reached $1,114.7 million; an 8.9% year on year increase. Total second quarter 2023 operating expenses decreased to $989.2 million; an 11.0% year on year decrease resulting from continued success of the Company's cost optimization strategy. EBITDAR was $271.3 million, representing a 24.3% EBITDAR margin.

• The Company generated $84.8 million in cash during the second quarter 2023 to reach $1,013.2 million in cash, cash equivalents and short-term investments at June 30, 2023.

• Passenger revenues during the quarter reached $862.8 million reflecting a 19.5% year on year increase, driven by robust market demand.

• Cargo and Loyalty revenues reached $251.9 million. LifeMiles Cash EBITDA increased 11.7% year on year increase. Cargo revenues were 26.2% ahead of Business Plan projections, though lower compared to last year.

• AGIL further deleveraged its balance sheet during the second quarter 2023, as Net Debt to LTM EBITDAR fell to 3.2x; significantly better than Business Plan projections.

• Passenger Costs per Available Seat Kilometer excluding fuel (PAX CASK ex fuel) during the second quarter 2023 decreased by 14.6% year on year to $3.9 cents, as compared to prior guidance of $3.8 cents; Avianca’s revised PAX CASK ex fuel guidance by the fourth quarter 2023 is $3.7 cents to $3.8 cents, as compared to prior guidance of $3.4 cents due to COP/USD exchange rates, inflation, and temporary fleet expenses. The Group remains committed to achieving a best-in-class cost structure and continues executing on its Business Plan.

• Avianca ended the second quarter 2023 with an operating passenger fleet comprised of 122 aircraft: 109 within the Airbus 320 family and 13 Boeing 787. The Group continued executing its point-to-point network strategy, adding four new destinations, and completing nine point-to-point routes year to date.

• Avianca Group was recognized by Cirium as the world’s most punctual airline in May and June, with an On-Time Performance (OTP) of 89.5% and 86.6%, respectively. Avianca’s average OTP was 87.5% during the second quarter 2023.

• AGIL continued to strengthen its sustainability footprint during the second quarter 2023, launching its platform "HOY" sustainability platform with a focus on mitigating its environmental impact, connecting Colombia regions with the world and positively influence the communities where it operates. Further, Avianca was awarded one of the highest ratings for sustainability by the Carbon Disclosure Project (CDP) as one of Latin America's best airlines for its management against climate change. Avianca’s “B” is one of the highest scores awarded by CDP.