Eastern Airways revenues are up but earnings reduced
REVENUES UP: Eastern Airways accounts for nearly 10 per cent of Bristow Group's operations.
By Scunthorpe Telegraph | Posted: 9 Nov 2017
SECOND quarter revenues at Eastern Airways are up slightly year-on-year, owner Bristow Group has revealed.
For the three month period to September, the Kirmington-based operations – which include Humberside Airport and the resident airline – contributed £23.2 million, up from £22.6 million in September 2016, a rise of 2.6 per cent.
Earnings were down 49 per cent however, at £152,280 compared to £228,390, with a decrease in oil and gas revenues – on which both strongly depend – continuing in the UK.
There was less of a negative impact from foreign currency exchange rate reported, and Eastern is back in the black after significant losses in the previous financial year saw it go from £10 million in profit to -£3.3 million.
It comes as this quarter has seen a new franchise arrangement with the UK’s largest regional airline, Flybe, commence for Eastern, as well as the arrival of the first of two new leased 72-seat ATR 72-600 planes, described as a “significant commitment for Bristow Group” last month.
In April next year Humberside tenant CHC Group will also begin a contract to serve Ørsted's (what was Dong Energy) Hornsea Project One offshore wind farm, as a reliance on oil and gas is diluted.
Welcoming the ongoing offshore developments as great news for the region and Humberside Airport, Deborah Zost, airport managing director, told how 1,800 additional helicopter movements are anticipated during the 18 months of construction, with approximately 12,000 passengers using the airport’s facilities.
Total revenues for Bristow – with Eastern accounting for nearly 9 per cent – were £272.6 million, better than expected, having been exposed to a prolonged downturn in oil and gas. It has, however, deferred $190 million of aircraft purchases to 2020, with the agreement of suppliers.
Norwegian operations in the North Sea were a shining light, as well as the increasing search and rescue presence in the UK, with Humberside having been a forerunnerto the model rolled out across strategic locations.
Jonathan Baliff, president and chief executive of Bristow Group, said: “This second quarter’s financial performance demonstrates the success of the fiscal 2018 improvements with notable accomplishments including OEM cost recoveries and capex deferrals that provide a significant strengthening of our liquidity position, annual EBITDA guidance improvement and positive free cash flow in the quarter.
“Our better than expected EBITDA was a result of higher revenue from increased flying activity across all regions, while also benefiting from the operating leverage created by our lower cost hub structure.
“Bristow is delivering on our fiscal 2018 priorities of safety improvement, cost efficiencies, portfolio management and increased revenue, and I am incredibly proud of our team members who are delivering safety and efficiency for our clients every day.
“While we flew safely, flew more, and flew more efficiently in the first half of the fiscal year, the remainder of fiscal 2018 will remain challenging due to continued oversupply of aircraft and less visibility into our clients’ demand for aviation services. Our lower cost structure is clearly showing progress, but we must continue to strive to meet the goals of Target Zero safety and our fiscal 2018 priorities as we more effectively compete and ensure our clients’ success in the fourth year of this historic oil and gas downturn.”