Latvian national carrier airBaltic has reported a net loss for the first half of 2024 despite a “record-breaking” half-year. The shortage of Pratt & Whitney engines contributed to a preliminary loss of EUR 88.8 million in the first half of 2024. The engine problem alone is expected to cost the airline EUR 40 million in 2024.

In the first six months of 2024, the airline’s revenue increased by 16% compared to the same period last year to a record EUR 339 million, partly due to an 11% increase in the number of passengers carried (to over two million). “airBaltic’s performance in the first half of the year demonstrates the airline’s resilience and ability to adapt to and thrive in a challenging market environment,” said President and CEO Martin Gauss, who attributed the strong first half of the year to “an increase in flights and passengers, improved efficiency and a dedicated focus on customer service.”

airBaltic’s total revenue for the half-year is EUR 339.3 million, up 16.5% from the same period in 2023. The number of flights operated increased by almost 12% to 34,000, setting a record for the airline. Load factor also increased by two percentage points to 77%.

“However, despite the positive figures, airBaltic recorded a net loss, primarily due to the expected shortage of Pratt & Whitney engines in 2024, increased costs due to premature full engine workshop visits – partly due to the powder metallurgy material issue – and currency devaluation,” Gauss explained.

Despite the ongoing engine situation – manufacturing defects in metal components continue to require expedited inspection of P&W GTF engines “significantly earlier than previously expected” – airBaltic’s aircraft load factor increased by 0.6% in the second quarter (but fell by 5.1% for the full six-month period). Network load factor was negatively impacted due to cycle preservation for the peak summer, explained airBaltic, which (as predicted) notes that the engine shortage continues to grow. As a result, the number of grounded aircraft – which had been gradually reduced over the course of 2023 to just three units in the first quarter of 2024 – increased to six AOG in the second quarter.

The negative impact for the whole of 2024 is currently estimated at EUR 40 million, while the impact between 2024 and 2028 is currently estimated at around EUR 80 million. This engine issue will last “one to two years, with an improving trend,” Air Baltic added, pointing out that the conclusion of a “Power by the Hour” engine contract (FMP) will “ensure long-term cost predictability.”