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2017-04-20
Small Planet Airlines announced revenue growth and record winter activity
Small Planet Airlines announced revenue growth and record winter activity
 
Lithuanian leisure carrier Small Planet Airlines (SPA) has announced financial results for the year 2016. The company maintained revenue growth with the annual revenue reaching 223,1 million EUR – 22,6% more when compared to 2015. SPA’s profitability, on the other hand, was less satisfying: due to unexpected aircraft maintenance and flight delays leisure airlines ended up with a loss of 3,8 million EUR, contrary to a profit of 19,2 million EUR in 2015.
SPAs EBITDA margin shrunk to 11,7% (26 million EUR). Such financial outcome was quite unexpected for a company which was doubling in size and growing profits for the last few years.
“In recent years, we have witnessed business growth that’s phenomenal in the aviation industry.  Unfortunately, we failed to evaluate risks when obtaining new Airbus A321 aircraft last year and experienced a financial punch in the face. Flight delays disappointed a lot of our clients in Poland and the UK. Yet, we managed to stabilize the situation, we are very positive about the future, and new plans are going full speed ahead”, says Kristijonas Kaikaris, CEO of Small Planet Airlines.
SPA added six new Airbus aircraft to its fleet in 2016. Moreover, the cabins of all company’s aircraft have been upgraded. This cost SPA 6 million EUR in total. Apart from technological investments, SPA was growing its staff as well: at the end of 2016 the number of company employees reached 676 – 57% more than in previous year. In the most hectic summer months the number of SPA employees amounted to around 815 people.  
SPA generated as much as one third of yearly revenues throughout the first and the fourth quarters of the year, the Winter season. The main driver behind record winter activity was well managed projects in the Asian markets.
“This winter SPA operated 7 aircraft in Asia – we had bases India, Saudi Arabia and Cambodia, and performed around 6000 flights. Besides positive effect on revenue growth it has also significantly improved our aircraft utilization. Balancing seasonality has been an important challenge as well as a goal for us, and in terms of this 2015 has been a very successful year”, explains K. Kaikaris.
According to him, 2017 will be the year of ‘lessons learned’: SPA will focus its efforts on stabilization of its operations and optimization of business processes. One more Airbus A320 aircraft will be added to the fleet, becoming the 18th airplane of this model operated by the company.   
“All efforts will be focused on making ongoing processes more effective. Aiming to avoid delays and flight schedule disturbances this year we are going an extra mile. Firstly, we started hiring crews much earlier, and we are planning to assign more crews for an aircraft than before. Moreover, we will have two stand-by aircraft to cover delays”, notes Mr. Kaikaris.
According to the SPA CEO, one of the most important goals for the year 2017 is to obtain air operator certificate (AOC) in Cambodia where the company has already established two offices. As for now SPA holds AOCs in three EU countries – Lithuania, Poland, and Germany.
SPA expects to keep revenues up this year as well, forecasting a growth of 21% which would amount to 280 million EUR. The company has sold its full capacity for the Summer season already. In cooperation with the biggest Tour Operators SPA will fly passengers to popular holiday resorts in Turkey, Greece, Bulgaria, Spain, Italy, etc. 
Poland remains the biggest SPA business market for the upcoming year. 10 aircraft in total will be based in Polish airports, 5 aircraft will operate from Germany, 3 from Vilnius. London Gatwick remains as the base in the UK with 2 aircraft assigned, and another 2 will operate from France.