In results adjusted to reflect a 51-day pilots’ strike affecting nearly half of its fourth quarter, Colombia-based Avianca Holdings reported $245 million in adjusted net income for 2017, more than doubling the company’s net profit over 2016.

On a non-adjusted basis, Avianca reported $82 million in net profit for the year, an 85.5% increase over $44.2 million in 2016.

Avianca CEO Hernan Rincon said “2017 could have been probably the best year of the company in our almost 100 years, but because of the turbulences we came across during the 4Q we were short of this goal.”

Between Sept. 20 and Nov. 14, 2017, 730 pilots represented by the Colombian Association of Civil Aviators (ACDAC)—over half of Avianca Colombia’s flying staff—staged strike action, protesting alleged wage inadequacies between Colombian pilots versus international pilots. In October, the Supreme Court of Bogota agreed with Avianca’s assertion that the strike was illegal, holding up the Colombian constitutional law stating strike actions disrupting essential public services, i.e., transportation, were illegal. A Colombian Ministry of Labor-appointed tribunal is set to resolve the conflict.

As part of its adjusted fourth-quarter figures, Avianca included one-time losses of $152 million in foregone revenue related to the ACDAC; $62 million in ACDAC-related operating expenditures; and $20 million in wet-lease expenses.

“From an operational perspective, [during the strike] we deployed larger capacity aircraft on our domestic routes, wet leased widebody aircraft on two international routes to serve our customers and optimized staff deployment across our network,” Rincon said.

“Despite the ACDAC pilots’ strike … we transported just under 30 million passengers in 2017, in line with 2016,” Rincon said. “Our estimates indicate that without these unfortunate circumstances, full-year passengers transported would have seen an increase of 5.9%.”

Avianca’s fourth-quarter passenger traffic was down 6.9% to 9.4 billion RPKs while capacity decreased 7.3% to 11.2 billion ASKs, producing an 84.2% load factor, the highest 4Q load factor since the Avianca’s integration with TACA in 2010.

Excluding strike-related and other one-off adjustments, Avianca recorded an adjusted net income of $127.8 million for the fourth quarter, more than doubling its $51.2 million net profit a year ago. The company’s adjusted net income margin for the quarter was 10%, a 5.4-point rise year-over-year (YOY).

Passenger revenue (up 18.5%) and cargo revenue (up 3%) fed Avianca’s $1.3 billion in adjusted fourth-quarter operating revenue—a 15.2% rise over 4Q 2016. Avianca said it was its strongest fourth quarter revenue since the TACA merger.

Avianca’s adjusted operating expenses for the quarter increased 10% to $1.1 billion, driven by a 4.2% increase in fuel expenses coupled with a tripling of flight operating expenses related to an increase in wet-leased aircraft and a 16% rise in labor expenses related to training of third-party pilots and employees brought in during the strike period.

Adjusted operating income for the quarter reached $169.1 million, up 65.6%, with a 13.3% operating income margin, up 4.1 points YOY.

Looking to 2018, Avianca forecast an operating margin between 6%-8% for full-year 2018. Capacity is expected to increase between 8%-10%; total passengers are forecast to rise between 7%-9% and the overall load factor will be between 80%-82%.

Mark Nensel