Aerolíneas Argentinas Reports $220 Million Loss in 2023 but Projects First Operating Profit in 2024
The shareholders’ assembly of Aerolíneas Argentinas has approved the 2023 financial report, which recorded a final loss of over $220 million. However, during the presentation, company president Fabian Lombardo announced that by the end of 2024, the airline expects to achieve its first operating profit since its nationalization.
Financial Performance and 2023 Losses
Despite the financial loss, Aerolíneas Argentinas benefited from over $500 million in extraordinary financial gains due to exchange rate differences, which temporarily reduced its reliance on state funding.
As a result, shareholders voted to reject the management’s performance, leading to the removal of the previous board of directors, which had already been replaced upon Lombardo’s appointment.
In an official statement, Aerolíneas Argentinas highlighted that over the past 16 years, the company has averaged an annual operating loss of $400 million at the EBIT (earnings before interest and taxes) level. In 2023, this indicator showed a negative balance of $390 million.
However, according to Lombardo, in 2024, the airline is on track to report a positive operating result for the first time since it came under state control in 2008.
2024: A Historic Shift to Profitability
With an operating surplus of $20.2 million, Aerolíneas Argentinas has, for the first time since nationalization, generated revenues exceeding operational costs.
"This achievement was accompanied by a 25% reduction in consolidated debt in U.S. dollars, without affecting the company’s cash reserves. Additionally, this year marks the lowest level of government funding for operational expenses since nationalization," Lombardo stated.
Furthermore, Lombardo confirmed that, based on current projections, Aerolíneas Argentinas will not require Treasury funding in 2025, operating entirely on self-generated revenue.
"This positions Aerolíneas Argentinas as a valuable asset, allowing shareholders to explore future alternatives for the company without restrictions," he added.
Cost Reduction and Workforce Optimization
The airline credits its improved financial position to an aggressive cost-cutting strategy, which included:
- A 13% reduction in workforce, bringing employee numbers to their lowest level in 14 years.
- The elimination of 1,600 positions, including:
- 85 executive roles, among them:
- 8 director positions
- 20 managerial roles
- 57 other leadership positions
- 85 executive roles, among them:
Additionally, negotiations with labor unions at the end of 2023 focused on enhancing fleet and workforce productivity.
"This year’s efforts aimed to align the company with industry standards and improve financial results, making Aerolíneas Argentinas a viable candidate for market entry when conditions are favorable," Lombardo concluded.
With these financial and operational improvements, Aerolíneas Argentinas is positioning itself for a more sustainable and competitive future, marking a potential turning point in its long history of state dependency.
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