Case Study : Avianca Airlines : A High Profit Margin With A Superior Performance For Each Quarter Every Year

1023 Words5 Pages
When it comes to performance and profitability, every airline’s dream is to have a high profit margin with a superior performance for each quarter every year. However, not every airline is successful in attaining such results, mostly due to multiple reasons that result in detrimental financial woes. Avianca Airlines does not fall into this category, or any type that reflects a struggling company. Avianca has prospered tremendously throughout the last several years, mostly due to a multitude of smart and well thought out financial decisions. Avianca Airlines has shows prosperous growth every year for the last three years since its bankruptcy in 2011. Avianca, under the financial backing and guidance of Brazilian Consortium Ocean Air…show more content…
Now in the year 2014, Avianca still continues to enjoy success. According to Business Wire, “Avianca Holdings earned an adjusted net income of $31.6 million, excluding special items. Adjusted net income margin came in at 2.9%. Operating revenues amounted to $1.099 billion, down 1.7% over 1Q 2013, mainly due to a 2.2% decrease in passenger revenues, driven by a yield decline of 4.4%, which was partially offset by a 3.3% growth in passenger carried. In line with our cargo capacity expansion and improved capacity utilization, Cargo and other revenues increased by 0.5%. As a result cargo load factor increased by 100 basis points” (Business, 2014). CEO of Avianca again reported as follows: “During the first quarter of 2014, Avianca Holdings S.A. and its subsidiaries registered a net operating revenue of $ 1.099 billion, a reduction of 1.7% compared to the same quarter of 2013. In terms of the adjusted operating profit, it amounted to $57.2 million, resulting in an operating margin of 5.2%” (Business, 2014). Although the profits are significantly down from 2013, Avianca continues to operate at or above projected target margins set forth. Aviancas performance cannot be measured only in cents and dollars. Avianca reported increase in passengers of 6.2m in Q1 of 2014, compared to 6.0m from Q1 2013. Avianca has been targeting newer markets every year, and searching for new customer base to increase its passenger flow. So far this has been successful as

    More about Case Study : Avianca Airlines : A High Profit Margin With A Superior Performance For Each Quarter Every Year

      Open Document