Avianca Group reports $233.1 million in EBITDAR with a 21.4% margin, ending the quarter with $928 million in cash

Bogota, Colombia May 10, 2023. Avianca Group International Limited affiliated passenger airlines (“AGIL” or “the Group”) today reported its results for the first quarter 2023 (1Q 2023) with $233.1 million in EBITDAR, at a 21.4% margin, significantly outperforming Business Plan projections. Strong passenger revenue performance resulted in a $6.9 cent passenger revenue per available seat kilometer, increasing 4.5% year over year. Passenger Cost per Available Seat Kilometer excluding fuel (Pax CASK ex-fuel) decreased significantly reaching 3.9 cents at the end of the quarter. The Company remains on track to achieve its CASK ex-fuel target of 3.4 cents in 4Q23. Avianca generated $67 million of cash during the period ending the quarter with $928 million in liquidity.

Adrian Neuhauser, Avianca’s CEO commented: “I am very proud of the work that the team has done to deliver these results in what is a seasonally weak quarter for Avianca, continuing to successfully execute on our Business Plan. The Company embarked on a business transformation which has resulted in significant improvements, today our Company is profoundly different and considerably stronger than it was before”. He continued, “I would like to take this opportunity to thank our investors, partners, and employees for their unwavering support throughout Avianca’s transformation process. Today we’re well positioned to continue to deliver on our long-term business plan.”

First Quarter 2023 Highlights

·    Avianca Group and its subsidiaries’ consolidated capacity, measured in Available Seat Kilometers (ASK), reached 12,005 million in the first quarter of 2023, a 44.3% year on year increase. The Group transported 6.8 million passengers during the period, a 19.3% year on year increase, reaching the 85.1% of pre-pandemic passengers carried.

·    The Group generated $1,087.1 in total operating revenue during the first quarter of 2023, representing a 34.1% year on year increase. Further, total operating expenses reached a $981.2, a 23.6% year on year increase. Avianca Group generated $67 million in cash and ended the first quarter of 2023 with US$928 million in cash, cash equivalents and short-term investments.

·    1Q23 passenger revenues reached $828.9 million, a 51.2% year on year increase, as a result of robust market demand and increased capacity during the quarter.

·    Cargo and Loyalty revenues for the first quarter of 2023 amounted to $258.3 million. LifeMiles continued to generate a strong contribution to the Group, reflected in a 38.3% increase in 1Q23 Cash EBITDA contribution as compared to the same period of 2022. Cargo revenue outperformance moderated during the quarter but nevertheless exceeded projections for the quarter.

·    Avianca further deleveraged during the quarter as 1Q23 Net Debt/LTM¹ EBITDAR reached 4.1X which is better than Business Plan projections.

·    Avianca Group ended the quarter with an operating passenger fleet of 118 aircraft, (105 A320 Family and 13 B787) and continues to expand its point-to-point network adding two new destinations during the first quarter 2023 and has launched more than twenty point-to-point routes since the beginning of 2022.

·    Passenger Cost per Available Seat Kilometer excluding fuel (Pax CASK ex-fuel) decreased by 29.1% year on year, to 3.9 cents largely driven by the densification of our narrowbody fleet; more than 80% of our narrowbody aircraft have been densified by quarter end of 2023, the Company expects to complete its narrowbody densification program by June of 2023.

·    Avianca achieved 86.4% on-time performance during the first quarter 2023, one of the best in the world, with a 99.4% schedule completion factor.

·      Avianca continues to strengthen its sustainability footprint: The company launched an alliance with the Colombian Civil Air Patrol, to transport medical personnel to the impoverished and vulnerable regions and communities around Colombia to provide basic medical attention to kids, adults, and seniors. In addition, we signed an agreement with the Wildlife Conservation Society to strengthen our processes against wildlife trafficking.

·    Abra Group completed share contributions from Avianca and Gol; and secured US$1.4 billion in funding.  Abra Group brings together two complementary and iconic brands in the region: Avianca, with its extensive connections between Colombia, Central America, and Ecuador, and GOL, with leading operations in Brazil.