AVIANCA HOLDINGS S.A. REPORTS OPERATING PROFIT OF $57.2 MILLION

During the first quarter of 2014 Avianca Holdings S.A. (NYSE: AVH) reported an increase of 3.3% in passenger traffic, which resulted in an operating revenue of US$1.1 billion. This result represents a decrease of 1.7% over the same period in 2013 and reflects the redeployment of capacity from Venezuela to other markets in South America. In addition, passenger revenues decreased 2.2%, mainly driven by a 4.4% yield decline. During this period, Cargo revenues increased by 6.7%.

As a result, the adjusted EBITDAR (earnings before interest, tax, depreciation, amortization and aircraft rentals) totaled US$166.5 million, while the EBITDAR margin reached 15.2%, at the close of 1Q 2014. Operating income (EBIT) in 1Q 2014, excluding extraordinary adjustments made in the period, amounted to US$57.2 million and the operating margin came in at 5.2%.

The consolidated adjusted net income (*) amounted to US$31.6 million, excluding extraordinary adjustments made in the period. Avianca’s adjusted net profit margin was 2.9%.

Capacity, measured in ASKs (Available Seat Kilometers), grew by 5.5% during 1Q 2014. This growth is driven by Avianca’s expansion in its home markets, along with the addition of larger aircraft. Furthermore, passenger traffic, measured in RPKs (Revenue Passenger Kilometers), grew 2.3%, resulting in a load factor of 78.4%.

In accordance with Avianca’s fleet renovation and modernization plan, between January and March the Company incorporated three Airbus aircraft equipped with sharklets, consisting of: two A321 and one A319. Throughout the same period Avianca incorporated two ATR72-600 aircraft, which will be used in Colombia’s domestic market.