Small Planet Airlines Counts Increased Revenues, but Lower Profits

Small Planet AirlinesDuring the first half of 2016 leisure carrier Small Planet Airlines grew its revenues by 9,9% to 72,3 million EUR when compared to the same period in 2015. The main reasons behind revenue growth was increased activity in Lithuania, Poland, and the United Kingdom, launch of flights under the German AOC, and return to the French market. Over the period of six months Small Planet Airlines added six new aircraft and carried 660 thousand passengers: 26% more than during the same period last year.

Currently Small Planet Airlines operates twenty-one aircraft under their AOCs: seventeen Airbus A320 aircraft in 180 economy seat configuration and four Airbus A321 aircraft in 220 economy seat configuration. Cabin interiors of all Small Planet Airlines’ aircraft were retrofitted this year, including new Recaro seats, LED lightning, Premium seating, on-board entertainment service Air-Fi, and more.

Rapid growth and record investments in fleet expansion and aircraft upgrade programme contributed to Small Planet Airlines profitability decrease – its gross profit margin lowered from 9.8% to 1.0% when compared to H1 2015.

Small Planet Group CEO Vytautas Kaikaris
Small Planet Group CEO Vytautas Kaikaris

“Unfortunately, 4 out of 6 six new aircraft in our fleet were delivered very late and this was the main reason behind disappointing on-time performance and profitability. This delay was a product of our planning mistakes, further amplified by unscheduled maintenance required on the aircraft. We’ve learned an expensive but valuable lesson and we believe this was a one-off event which we are able to prevent from happening in the future. We expect the Q3 profitability to be a bit down as well due to the same reasons, and the Q4 to be already in line with that of the last year”, Vytautas Kaikaris, CEO of Small Planet Group, told.

According to him, one of the most challenging market trends the airline industry faced this year was scarcity of personnel, especially pilots.

“Together with unplanned technical maintenance of some aircraft and new aircraft delivery delays, this caused a lot of turbulence in our flight schedules, especially in Poland and the UK. We sincerely apologize for this both to our clients and the passengers. It seems that everything hit us at the same time, but we are back on track now and after careful internal reviews we already know what went wrong and have active measures to prevent such situations in the future”, Mr. Kaikaris spoke.

Improving passengers’ experience across all markets and operations remains among the top priorities for Small Planet Airlines. With this aim record investment projects were implemented in 2016, with aircraft cabins’ upgrade being the largest of them, followed by a completely redesigned website and establishing a Customer care unit.

As for winter 2017, Small Planet Airlines plans to continue its operations from Poland, Lithuania, Germany, and the UK, as well as expand its presence in the Asian region to balance seasonality.

“Our top markets remain the same, and Asia will continue to play an important role in our strategy due to winter utilization. Despite the challenges this summer, the UK remains among our top markets, too. The Brexit vote did not impact our trading during the six months and apart from the sterling devaluation we do not expect any material implications related to this vote in the nearest future”, Mr. Kaikaris concluded.

Poland continues to be the largest outbound market for Small Planet Airlines, representing about 50% of the overall charter activity this summer, followed by the United Kingdom and Lithuania, each having about 16% of the share. Germany shares 11% and France about 5% in the balance of the activity. The group operates in 11 bases and flies to more than 45 destinations.

Small Planet Airlines is a leisure carrier which flies European and Asian passengers. Operating 21 Airbus 320/321 aircraft, the company works with some of the biggest holiday operators around the world and carries passengers to Greece, Spain, Turkey, Bulgaria, and other countries during the summer season. During the winter season it moves some of its aircraft to the Asian region. Small Planet Airlines also organizes special flights to the national delegates, athletes, the military, as well as private individuals.