AZAL Azerbaijan Airlines (J2, Baku) has officially released its Deloitte audited financial report for 2020, according to which its net loss for the year amounts to 76.42 million AZN manats (44.98 million USD), approximately 3% less than his loss for 2019. But he received millions in state grants to compensate.
The pandemic outbreak that year caused the national airline’s revenue to drop from AZN 1.01 billion (USD 594 million) to AZN 335.27 million (USD 197.3 million), but “subsidies received from the government due to Covid-19” amounted to 232.1 million AZN (136.6 million USD).
The report revealed that in total, the Azerbaijani government has provided the company with financial support totaling AZN 279 million (USD 164.2 million) in 2020, including grant income, paid-in capital, loan repayments and other factors.
Total liabilities at the end of the period, December 31, 2020, stood at 2.76 billion AZN (1.62 billion USD), far exceeding its 1.99 billion AZN (1.17 billion USD) d total assets. Liabilities included AZN 334.16 million (USD 196.68 million) due to aircraft lessors over the next five years. the advanced ch-aviation fleets shows that AZAL owns its entire fleet of 31 aircraft except for four of its eight ERJ 190-100ARs, leased to Nordic Aviation Capital.
Azerbaijan Airlines also released financial accounts for the first ten months of 2021, during which it received AZN 58.39 million (USD 34.36 million) in “additional state financial assistance” to stem losses from travel restrictions due to the ongoing pandemic. The report states that “in addition, the Ministry of Finance ordered AZN 25.407 million [USD14.95 million] to repay airline loans and leases.
However, following the partial resumption of flights, AZAL’s unaudited revenue for the ten-month period amounted to AZN 383.215 million (USD 225.55 million).
Deloitte warned in its notes to the 2020 audited report that “the group has been significantly impacted by the Covid-19 pandemic, has negative working capital, recurring operating losses and an accumulated deficit. These events or conditions […] indicate that there is significant uncertainty related to events or conditions that could cast significant doubt on the group’s ability to continue as a going concern.