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

1023 Words Aug 4th, 2014 5 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 & Synergy Group, has grown exponentially on average by thirty three percent per year. Avianca reported at the beginning of year 2014 its final quarter (Q4) report for 2013. Avianca Holdings would have earned an adjusted net income of $63.4 million excluding special items, a 98.3% increase over adjusted net income of $32.0 million for the same period in 2012. Adjusted net income margin increased 239 basis points, reaching an all-time high of 5.3%. Net income for the quarter stands at $65.4 million for 4Q 2013. Avianca Holdings accumulated adjusted net income for $234.1 million, a 132.5% increase from the adjusted net income in 2012 of $100.7 million (Avianca, 2014). Avianca Holding CEO Fabio Villegas Ramirez reported in his quarterly…

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