ALAS Group – Annual Executive Summary FY20

We have just completed our financial report for fiscal year 2020, including our executive summary and year-end results, showing visible signs of a weakening economy caused by the pandemic.

The group has experienced an increasingly difficult year in most of our business areas, showing much lower volumes than previous years. It’s been a year with significant losses in the aviation industry, leaving most businesses in this sector paralyzed as a result of the coronavirus. Airbus recently published their 9m report, showing a serious decline in revenue falling from € 46.2 billion in 2019 (9m) to € 30.2 billion in 2020 (9m), with around 40% fewer deliveries year-on-year. Witnessing a significant decrease in demand for commercial airliners compared to the year before, shows visible signs of a global economic crisis, sending a tsunami through most of the global supply-chain and the surrounding companies. Many thousands of people have been left unemployed and numerous unable to travel as a result of the lockdown restrictions, which have forced airlines to temporarily cease operations, or worse, file for bankruptcy.

Looking at the global aviation market and passenger numbers from IATA, the total traffic demand (RPKs - revenue passenger kilometers) saw a serious decline in September on 72.8% year-to-year, and a capacity hit on -63%, which reflected most of our downturn on passenger movements in 2020. However, there were still small movements to been seen in other areas of our inventory. Especially charter and cargo services dominated most of 2020, including long-haul operations with the Boeing 747's and Boeing 777's, and short-hauls operations with the Boeing 737 classic. The positive increase in freight however, couldn't compensate for the serious decline we saw in passenger capacity, making an overall deficit for the year in this specific area.

In early Q3 2020, we announced a new international partnership in Asia, taking a significant step towards meeting our sustainability goals, including our continuous work with long-term PPPs (Public-Private partnerships) in the SAARC region. We will continue our strategy to improve our position in Asia enhancing our political-commercial relationships and capabilities, strengthening our bilateral and multilateral relations with the SAARC countries. Working collaboratively with governments and industry partners in Asia will ensure sustainable developments in the region with economic benefits, and at the same time strengthen our position as a leading global brand.

Focusing on Europe and North America our activities declined increasingly due to the continuous lockdown restrictions in both regions. These disruptions made it difficult for our consultancy divisions to follow planned schedules and deadlines, forcing us to delay most of our projects in these areas. The Middle East however, showed a positive climb rate in activity levels supported by an increase in domestic demands, sales volumes and corporate investments.

The lessons learned from FY20 have forced us to amend our long-term strategy in certain areas. We are currently focusing on a more comprehensive and cost-effective digital-to-market approach, offering new streamlined services to clients and partners based on our existing business portfolio. This includes designing and developing a new extensive digital platform tailored to all segments under the group name, ensuring all our businesses are kept properly aligned with up-to-date market demands using state-of-the-art technology. The benefits of this new digital platform will give our clients much easier access to their preferred services, and at the same time giving us a much higher success rate on the commercial side of our activities.

The poor global demand in the aviation industry has negatively influenced our results for FY20 and will most likely impact our targets for 2021. With that in mind, we will continue to simplify our operating structure and focus more on our core business lines to better position the group for success in the future. This includes postponing planned acquisitions and large future investments, which unfortunately means terminating some of our expansion plans in the Southeast Asia region. Even though we have maintained a steady performance level in Q4 we still need to improve our working capital and strengthen our financial position, to allow us to further advance our long-term growth strategy. The global downturn has taken its toll on the economy, which is why we need to focus our attention on profitability and our global market position to avoid any future risks.

Chairman of the Group
Dustin Paul Wilden