Aeroflot Group’s net profit for the third quarter (3Q) reached RUB27.7 billion ($422.4 million), up 14.2% as the airline group implemented cost controls in the wake of high fuel costs and currency pressure seen through the year.

The Russian company’s 3Q revenue increased 18% to RUB200.5 billion while total operating costs for the quarter increased 20.4% year-over-year (YOY) to RUB163.4 billion, resulting in RUB37.1 billion operating profit, up 8.7% YOY. Aeroflot’s 3Q passengers grew 13.1% to 17.4 million.

“Our decision to accelerate operational growth and increase carrying capacities during the third quarter has paid off by allowing us to grow passenger numbers while also increasing the load factor and maintaining positive yield dynamics,” Aeroflot deputy CEO Andrey Chikhanchin said, adding the airline group is confident it will achieve its operational targets for the full year.

“We continued to maintain tight control of costs in the third quarter, and as a result revenue grew faster than costs during the period for the first time this year, in spite of currency pressures and the increased pace of fuel-price growth [YOY], at 47%. For the first nine months of 2018 the cost of a ton of jet fuel for the Group rose by 36% [YOY],” Chikhanchin added.

Aeroflot’s total traffic for the third quarter increased 11.1% to 44.4 billion RPKs, while capacity increased 9.7% YOY to 49.4 billion RPKs. Passenger load factor across the group rose 1.1 points to 89.9%.

Rising fuel costs for the first nine months of the year contributed to Aeroflot reporting a 17.2% decline in net profit for the period. For January-September 2018, Aeroflot’s net profit totaled RUB22.4 billion, compared to RUB27.1 billion over the same period in 2017. Revenue grew 15.2% year-over-year (YOY) to RUB466.3 billion.

Aeroflot Group’s total passengers grew 10.2% YOY to 42.2 million for the nine-month period. RPKs increased 9.1% to 108.4 billion. ASKs reached 129.4 billion, up 9%. Passenger load factor was 83.8%, up 0.1 points.

The group total operational costs for the first nine months grew 18.3% YOY to RUB429.5 billion, aircraft fuel is RUB132 billion out of this sum, up 46.7% YOY.

“We have entered the fourth quarter with continued high jet fuel costs and excessive capacity in the market. Recent falls in the oil price will be reflected in aircraft fuel costs only in December,” the group said.

Aeroflot’s results are published in accordance with International Financial Reporting Standards.

Polina Montag-Girmes