On October 13, UTair Aviation released its 9M 2008 operating results. In January-September, the company’s passenger turnover grew by 13.9% y-o-y to 4.1 billion passenger-kilometers. The total volume of helicopter operations slightly exceeded 58,000 flying hours, a 13.3% increase y-o-y.
Table 1. UTair: Key Operating Results 9M 2008
| | Unit of measurement | 9M 2008 | 9M 2007 | 9M 2006 | 9M2008/ 9M2007 | 9M2007/ 9M2006 |
|---|
| Passenger turnover | mn passenger-kilometers | 4,104.8 | 3,604.2 | 2,880.7 | +13.9% | +25.1% |
| Passenger traffic | thousand people | 2,562.0 | 2,232.9 | 1,844.2 | +14.7% | +21.1% |
| Helicopter operations | thousand hours | 58.2 | 51.4 | 44.4 | +13.3% | +15.6% |
The company’s growth rate has continued to slow down amid the complex industry environment: Highly monopolized refueling systems at Russian airports slow down the correction of prices for aircraft fuel inside the country and, given the current fuel inefficiency of the Russian aircraft fleet and the fact that domestic flights stand for 90% of the total airfreight structure, this could have a negative impact on company results. The ongoing credit crunch could also impede the implementation of the company’s fleet renovation strategy.
The company’s helicopter business has developed in line with market expectations, which could lend support to the company’s consolidated financial results.
In our opinion, UTair’s operating results were generally anticipated by the market and should not have a notable impact on the company’s stock valuations. In current conditions, we do not recommend investing in UTair securities.
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