Aeroflot’s reinstatement of financial disclosures earlier this month has given an insight into its performance in the year-and-a-half since the Ukrainian conflict began, although the picture has been complicated by changes to accounting methods and the effect of currency exchange.

Application of the new federal accounting standard – which affects treatment of aircraft leasing, and involves revaluing balance-sheet liabilities based on exchange rates – increases the “volatility” of financial results, the company states.

The company turned in a pre-tax loss of Rb102 billion ($1 billion) over the six months to 30 June, and a net loss of Rb81.6 billion, although revenues rose by 48%.

But it says this net loss contains a “sizeable” effect from the accounting change, including an negative exchange-rate revaluation of Rb87 billion – with over Rb32 billion in June alone – contributing to an overall deterioration in ‘other activities’ expenditure of Rb244 billion.

Aeroflot states that the large first-half net loss amounts to just Rb1.6 billion if the effect is discounted.

The company’s comparable interim figure last year was a loss of Rb38 billion, and it says this demonstrates an improvement of its financial result despite lower state subsidies for 2023.


Source: Aeroflot

Aeroflot had suspended financial disclosures as it overhauled its operations last year

Aeroflot halted disclosure of financial results in 2022 as the carrier adapted to the fundamental changes in its operations as international sanctions were imposed in the wake of the Ukrainian conflict.

“Over the past year, we managed to stabilise our business, ensuring continuity of the company’s operations and key business processes including aircraft [maintenance] and operation,” says chief financial officer Andrei Chikhanchin.

The airline has undergone a transformation to capitalise on domestic routes and open international services to available destinations.

Chikhanchin says the company has shown “positive dynamics”, with growth in air transport demand, while maintaining “strict cost controls”.

Aeroflot has retroactively applied the new accounting standard to its full-year results for 2022, stating that the company turned in a net loss of Rb14.3 billion – although this would have been Rb40.5 billion without the accounting change.

Over the course of last year, Aeroflot received Rb39.3 billion in state support through industry and other subsidies.