Avianca Holdings reports adjusted operating profit of US$37.6m for the second quarter of 2016

Avianca Holdings S.A. reported second quarter operating income (EBIT) reached US$37.6m, posting an operating margin of 3.9%, a 341 bps increase over the same quarter of last year. Furthermore operating revenues amounted to US$966.2m for the quarter. These results were mainly driven by a 12.1% reduction in total operating costs1 as the Company continued to further capture benefits from lower oil prices, which in hand with the cost saving initiatives have led to a leaner cost structure. These figures were partially offset by a 10.7% decrease in passenger revenues due to a yield dilution of 16.1%, partly compensated by growth in traffic numbers (RPKs). Cost per available seat kilometer (CASK1) decreased 18.1% to 8.02 cents in 2Q 2016, compared to 9.80 cents in 2Q 2015. This figure was mainly driven by lower jet fuel prices which dropped 35% over the quarter. As the cost control initiatives continue to yield efficiencies, CASK ex-fuel declined 12.3% to 6.37 cents. EBITDAR for the 2Q 2016 was US$178.4m, while the EBITDAR margin reached 18.5%, a 528 bps increase when compared to 2015. Adjusted net income, excluding special items totaled US$-4.0 million. As such, adjusted net income margin for 2Q 2016 reached -0.4%, a 192bps increase over the same period of 2015.