Russian national air carrier Aeroflot Group posted a passenger turnover increase of 9.4% year-on-year to 13.2bn in June, with both domestic and international flights showing positive dynamics.

The flagship Aeroflot airline posted a 7.2% traffic increase in June, with the number of passengers carried within the country up 11.3% y/y to about 1.6mn people and the number of foreign travellers up 8% to around 1.6mn. 

"We believe this is mainly attributable to the World Cup, during which fans flew between the cities where the games were played," Sberbank CIB commented on July 23.

The results continue the month-on-month improvement trend, but "Aeroflot is not demonstrating any signs of improving management outlook," BCS Global Markets commented on the June results, seeing them as neutral.

Sberbank notes that Aeroflot's seat load factors were still under pressure "falling 0.5pp on international routes and rising a mere 0.4 pp on domestic routes." Still, the group outperformed the market, which expanded just 6.5% in passenger turnover terms in June, according to the Federal Agency for Air Transport.

The pressure on seat load factors being indicates faster growth of spare capacity in what is a very competitive market environment, the bank argues, expecting lower yields in the financial results for the second quarter.

Aeroflot reported first-quarter negative IFRS Ebitda of RUB7.7bn, with a net loss more than doubling y/y to RUB11.5bn, despite the 9% year-on-year increase in revenues to RUB112bn ($1.18bn).

In the conference call the carrier's management stressed the impact of seasonal effects on the company’s 1Q results, such as the impact of a 21% y/y increase in fleet held under operating leases, BCS Global Markets commented on May 31, noting that this effectively represents an increase in fixed costs, while the quarter offers only 21% of annual passenger flow and the seasonally lowest yields.