For Sweden-based West Atlantic, 2015 was an exceptionally challenging year, during which the company’s profits dipped into the red, from a US$1.3 million profit in 2014, to a loss of $6.1 million in 2015. Despite higher revenues in 2015, which rose 13.7 percent over the previous year, to $173 million, the integrated mail and express carrier encountered enough costly setbacks to kept it in the red.
While the group has traditionally operated a variety of mostly turboprop aircraft for, and on behalf of, major integrators and national postal organizations, the airline continued to branch out into larger aircraft, which it said boosted revenues. West Atlantic added two 737 converted freighters and three 767 converted freighters during the year. West Atlantic saw softer demand for its lower payload, turboprop aircraft, “driven by market consolidation of volumes,” added West Atlantic’s interim CEO, Fredrik Goth. “Double digit revenue growth” was derived “from the commercial success in the B737 and B767 markets,” Goth added. Expanding revenues alone, however, don’t always translate into profitability.
The company was formed in 2011 as the result of a merger between Sweden’s West Air Group, and the U.K.’s Atlantic Airlines. Yet, even after five years, the carrier continues to face major obstacles as it moves to integrate both fleets under a single Swedish AOC. This resulted in costly delays for aircraft, which West Atlantic was “already contracted to operate,” Goth said.
Adding to the company’s misfortunes, January 2015 saw the tragic loss of a freighter-converted CRJ-200, in a crash which took months for the company to recover from. In addition to the loss of the plane, and the lives of its two crew members, the ongoing investigation into the incident diverted vital planning and operational resources, which, in turn, slowed the company’s return to “normal operations,” added Groth.
Looking forward, West Atlantic said it plans to implement a cost-reduction program, which aims to win new contracts and return the company to profitability.Like This Post