Avianca Group International (AVIANCA) Q3 2024 earnings summary

Executive summary

• Achieved record 9.7 million passengers in Q3 2024, a 14.5% year-over-year increase, with the largest network in company history, operating up to 167 routes to 81 destinations by year-end.

• EBITDAR/EBITDA reached $358 million at a 26.2% margin, reflecting strong cost discipline and operational efficiency.

• Strategic redeployment of capacity from oversupplied domestic Colombia to higher-yielding international markets, launching 26 new routes in 2024.

• Closed acquisition of Wamos Air, expanding European presence and widebody exposure.

• Cash balance increased to $1,122 million by quarter-end, supported by incremental liquidity initiatives.

Financial highlights

• Total operating revenues rose to $1,366 million, up 6.6% year-over-year, while operating expenses increased 9.4% to $1,169 million.

• EBITDA/EBITDAR margin was 26.2%, down from 28.3% last year; net income was $58 million, down from $82 million, with a net margin of 4.2%.

• Cash balance reached $1,122 million, up $194 million in the quarter, including $260 million in net new issuances.

• Net debt rose to $4 billion, with net debt/LTM EBITDAR at 3.4x.

• Passenger CASK ex-fuel stable at 3.9 cents; fuel CASK down to 1.9 cents year-over-year.

Outlook and guidance

• Expect continued margin improvement as capacity shifts to international markets and cost-saving initiatives persist.

• Plans to expand Business Class service to 34 routes by December 2024 and launch Insignia European Business Class.

• Continued investment in the LifeMiles loyalty program to further boost its contribution.

• Monitoring IPO market conditions, with strategy unchanged regarding potential equity raise.