Ukraine International Airlines (UIA) has returned to profitability on the back of decreased competition and an upturn in passenger numbers.
Under domestic accounting standards, the carrier has reported a net profit of Hr27 million ($3.37 million) for 2012. This broke a two-year losing streak, with its losses totalling Hr418 million in 2011 and Hr188.5 million the previous year.
Annual traffic rose to 2.8 million passengers, up 33% from 2011. UIA benefitted from a codeshare arrangement with AeroSvit-led Ukraine Aviation Alliance. It saw further traffic gains after AeroSvit started abandoning routes as its financial deepened during the second half of 2012.
A company spokesman admits that, despite returning to the black, UIA has not managed to wipe off accumulated losses and "solve its liquidity problems entirely".
According to Kiev-based investment firm Concorde Capital, the carrier owes Hr400 million to creditors and Hr310 million in bank borrowings.
But local experts believe that UIA is well positioned to further improve its financial performance this year. "It has remained without a major domestic rival," says one. "This gives it a rare opportunity to increase its market share and revenues."