Profits up but revenues down at Air Charter Service
18 / 04 / 2023
Chris Leach. Photo: Air Charter Service
Charter broker Air Charter Service (ACS) saw its revenues fall but profits climb last year as cargo demand waned but private jet charters were on the rise.
The company said that group revenue declined by around 15% in 2022 to £1.1bn, while earnings before interest, tax, deprecation and amortisation increased by around 14% to £82m.
ACS said that its private jet revenues increased by 35% while performance was also affected by its exit from Russian operations.
The company arranged a total of 28,000 charter flights with more than 2,100 new customers booking for the first time.
The company also pointed out that 2021 revenues had been “significantly inflated” due to Covid-related demand, especially in the cargo sector.
This trend continued in the first quarter of the year but slowed as the year progressed.
ACS founder and chairman Chris Leach said: “2021’s revenue was exaggerated by hundreds of trans-Pacific widebody freighter flights carrying essential Covid-related cargo, along with a backlog of goods caused by the pandemic, and subsequent reduction in scheduled service network.
“Those large, expensive flights continued into the first few months of 2022, but soon tailed off. The huge turnover generated by adding such flights to our business is not likely to be replicated for several years.
“However, we have been blown away by the performance of our underlying business. Passenger charter revenue reached almost £450m, whilst cargo accounted for close to £650m.”
He added: “Whilst cargo numbers have dropped off slightly, we have seen a 15% increase in private jets flights year-on-year, which represents a 29% increase in pre-pandemic levels. Private jet revenue was up 34% on 2021 and 72% up on pre-pandemic levels. This additional revenue is as a result of price inflation and customers booking longer flights on larger aircraft.
“We haven’t increased our cost base to reflect this spike in sales, knowing that this was only going to be temporary, so we are in an exceptionally strong position moving forward.”
The company expects revenues to decline again this year to around £800m and £900m as the post covid boom continues to tail off.
“Although the first two months of this year have already put us above target,” says Leach.
“To support our underlying growth, we have hired some experienced heads in key regions and grown our staff numbers overall, as well as opening two new offices in 2022, to drive future growth. There are exciting times ahead, with three new office openings in 2023, the first of which has just been announced as Mexico City.”
