Anual report 2014

Transcription

Anual report 2014

2014
annual report
ANNUAL REPORT
GLOBALIA CORPORACIÓN EMPRESARIAL, S.A.
‘14
GLOBALIA CORPORACIÓN EMPRESARIAL S.A.
AND SUBSIDIARIES
Including:
AIR EUROPA LÍNEAS AÉREAS, S.A.U.
GLOBALIA BUSINESS TRAVEL, S.A.U.
GLOBALIA TRAVEL CLUB SPAIN, S.L.U.
WELCOME INCOMING SERVICES, S.L.U.
VIAJES HALCÓN, S.A.U.
VIAJES ECUADOR, S.A.U.
VIAJES TU BILLETE, S.L.
BE LIVE HOTELS, S.L.U.
GLOBALIA HANDLING, S.A.U.
Centro Empresarial Globalia
07620 Llucmajor (Mallorca), Baleares. España / Spain.
Tel. +34 971 178 103 · Fax +34 971 178 352
www.globalia.com
Printing: Globalia Artes Gráficas
Design: som2.com
Executive Letter of the 2014 Annual Report . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Introduction to the 2014 Management Report and Main Magnitudes . . . . . . . . . . 6
Audit report on the Consolidated Annual Accounts . . . . . . . . . . . . . . . . . . . . 13
Consolidated Annual Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Notes to the Consolidated Annual Accounts . . . . . . . . . . . . . . . . . . . . . . . . 20
1. Nature, Activities and Composition of the Group . . . . . . . . . . . . . . . . . . . . . . . . . .20
2. Basis of Presentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
3. Distribution of Profit/Application of Losses of the Parent . . . . . . . . . . . . . . . . . . . . 23
4. Significant Accounting Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5. Business Combinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
6. Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7. Non-Current Assets Held for Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
8. Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
9. Goodwill, Goodwill on Consolidation and Impairment . . . . . . . . . . . . . . . . . . . . .48
10. Property, Plant and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
11. Investment Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
12. Finance Leases - Lessee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
13. Operating Leases - Lessee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
14. Risk Management Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
15. Equity-Accounted Investees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
16. Financial Assets by Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
17. Investments and Trade Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
18. Derivative Financial Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
19. Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
20. Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
21. Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
22. Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
23. Non-Controlling Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63
24. Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63
25. Financial Liabilities by Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
26. Payables and Trade Payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
27. Late Payments to Suppliers. “Reporting Requirement”, Third Additional
Provision of Law 15/2010 of 5 July 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
28. Accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67
29. Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67
30. Environmental Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
31. Related Party Balances and Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
32. Income and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
33. Employee Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
34. Audit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73
35. Other Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74
36. Events after the Reporting Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Director’s Report 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Globalia Corporate Social Responsibility Report 2013-2014 . . . . . . . . . . . . . . . . . 94
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PRESENTATION of
2014 ANNUAL
REPORT
2014 has been a year in which Globalia has seen firm
and sustained growth in all its business divisions, but
most especially in its air division, thanks to the excellent performance of Air Europa, which increased its
business by approximately 20 per cent compared to
one year ago. The rest of the group’s divisions have
not lagged behind and although the crisis continues
to be felt, all the divisions have closed the year in
the black.
Overall, Globalia’s turnover was 3,292 Million Euros,
8.05 per cent more than in 2013. Likewise, profit before tax increased for the second consecutive year, in
benchmark for flights between Europe, America and
this case from 40.9 Million in 2013 to 52 Million this
the Caribbean. Our passengers truly appreciate the
year, representing an increase of 27.14 per cent.
convenience of the connections and time schedules,
which have been planned in minute detail. The same
By sectors, growth has been most evident in the air-
can be said of our punctuality, which was ranked as
line, having increased its fleet from 41 to 45 airplanes,
among the best in the world again this year by the
its hours of flight and the number of transported pas-
prestigious FlightStats service.
sengers. Air Europa also opened several new routes
in 2014, accounting for its recent expansion, with des-
The group’s retail division, formed by the travel net-
tinations such as Miami, Sao Paulo, San Juan in Puerto
works of Halcón Viajes and Ecuador, has success-
Rico, Frankfurt, Munich or Porto, among others.
fully completed a meticulous adjustment process to
streamline and adapt its operations to the new reality
It is worth pointing out that the airline’s net results
of the market. It has been a hard process, but it was
were positive, with turnover increasing by 11% and
essential for the division to grow again from a new
with profits of almost 30 Million before taxes, despite
starting point.
the inherent costs of opening new routes.
Thanks to the incorporation of new franchises, the
In June, Air Europa opened its new hub (connections
number of offices has remained steady and even in-
centre) in terminals 1, 2 and 3 of the Adolfo Suárez -
creased somewhat to 1,116 and turnover has also in-
Madrid Barajas Airport, making the company a global
creased to 1,088 Million Euros.
Halcón’s corporate travel business received a particularly strong boost in 2014, having increased its market
share considerably. But this pales in comparison to
the fact that it was awarded a contract for managing
back to index
Firm and sustained growth
the travel and hotel reservations for the whole of the
Spanish Public Administration at the end of the year,
marking a true turning point.
The award of this contract, in force for three years and
valued at more than 200 Million Euros, represents a
true recognition of the quality of our company’s ser-
overlooking the “Jardines de Oriente”, and the projects
vices, proven over more than 40 years. But it is also
for 2015 that we are now starting are very exciting:
an excellent platform from which to attain undisputed
three new establishments in Morocco, another in Por-
leadership in the highly competitive area of corporate
tugal and a grand resort in Cuba. The chain’s profits
travel, after earning the trust of the most demanding
this year also confirm that the trend is changing and
of customers.
prove that BeLive has the potential to grow a lot more.
We will not let any interesting opportunity pass us by.
The Travelplan Tour Operator’s turnover increased
slightly in comparison to the previous year, despite a
The airport handling division, which operates under
small drop in the number of travellers carried. This
the Globalia Handling and Groundforce brands, has
growth in turnover, occurring for a second consecu-
been working in 16 first-rate national airports this
tive year after a long period of falls, is a clear indicator
year, one more than in 2013. A total of 143,000 ser-
that the trend is now positive, and this is thanks to the
vices were given, 6 per cent more than the previous
optimisation of the brand’s resources and points to a
year, and the division received the highest safety rank-
steady and stable course for the future.
ing from the IATA for both its central offices and its
base in Madrid-Barajas.
For its part, the Incoming travel sector sold almost a
million and a half hotel nights, through the Welcome-
Preparing for the future
beds bank, which represents an increase of 12.4 per
Apart from being a good year, 2014 has also allowed
cent in respect of the preceding year. The upward
us to set solid foundations for growth in the future. At
trend in this highly competitive business sector is very
the end of the year, Air Europa signed a contract for
significant, as it shows that Globalia has managed to
the purchase of fourteen Boeing 787/9 Dreamliner
consolidate its position among the market leaders in
planes, which will be added to the 787/8 already or-
a very short period of time.
dered in 2008. These new planes, to be incorporated
into the fleet from 2016 to 2022, will make our com-
With regard to the BeLive Hotel Chain, which finished
pany one of the most efficient and our fleet one of the
the year managing 29 hotels and approximately 9,000
most modern in the world.
rooms, the prospects could not be better. At the end
of last year, BeLive began managing the Santo Domingo, a four-star hotel situated in the centre of Madrid,
Juan José Hidalgo, Chief Executive.
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GLOBALIA CORPORACIÓN EMPRESARIAL, S.A. AND SUBSIDIARIES
INTRODUCTION TO THE 2014 MANAGEMENT REPORT AND MAIN MAGNITUDES
Globalia, the company founded and chaired by Juan
INCOMING DIVISION,
José Hidalgo, operates in the transport, hotel, travel
The Welcome Incoming Services brand was set up
and tourism sectors, and essentially comprises the
in 2010 to provide us with our own infrastructure in
following business units:
the most significant destinations where Globalia cur-
rently operates. It operates two main business lines:
GLOBALIA CORPORACIÓN EMPRESARIAL
S.A., the parent company and leader of the Group.
sale of accommodation online and incoming services such as trips, transportation and vehicle rentals.
AIR DIVISION, captained by Air Europa, the first
RETAIL DIVISION, including Viajes Halcón, Viajes
wholly Spanish-owned private airline, specialising in
Ecuador, which became part of Globalia in 2003 and
tourist and transatlantic travel. It is a member of the
Viajes Tu Billete.
Sky Team alliance.
WHOLESALE DIVISION, headed by Travelplan,
the Spanish market leader.
The Division has the largest network of branches operating in Spain and Portugal, giving it a leading position on the Iberian market.
In March 2003 this was added to by the company
HOTEL DIVISION, operating under the brand name
Iberotours and its Touring Club brand.
Be Live Hotels. Management of premium category
hotels in the Balearic and Canary Islands, mainland
In 2007, a partnership was established with tour op-
Spain, Morocco, the Dominican Republic and Cuba.
erator MK Tours, based in Miami and focusing on the
North American domestic market.
HANDLING DIVISION, operating under the brand
name Groundforce. Providing ground services to the
Group’s airline and third-party clients in airports in
Spain and Morocco.
1991
A majority stake in Air Europa is acquired by Juan
José Hidalgo.
1971
Juan José Hidalgo opens the first branch of Viajes
Air Europa begins scheduled domestic operations in
Halcón.
Spain, competing with Iberia.
1988
1999
Juan José Hidalgo sets up the tour operator Travelplan.
6
1993
Viajes Halcón and Travelplan begin operations in
Portugal.
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cess of expansion through franchised branches operating under the brand name.
Acquisition of 75% of Tubillete.com, an online travel
agency specialising in the sale of airline tickets.
The first four Embraer 195 aircraft begin operations.
2010
International expansion of Travelplan, via the opening of offices in Italy and France. New “Latitudes” tour
operator. Air Europa starts the operation of new
routes to Lima and Miami.
In May the central services move into their newly
Set up of “Welcome Incoming Services” as a new
built corporate offices of Llucmajor (Baleares).
business unit focused on incoming travel agency ac-
Incorporation of the first Boeing 737-800 NG aircraft.
tivity. Air Europa becomes a full member of SkyTeam.
2000 - 2005
2011
In May 2000, the first hotel operated by the Group’s
New in-house incoming services previously man-
Hotel Division opens its doors.
aged by third parties in Mexico, Dominican Republic
In October 2001, following the events of September
and London.
11, the Air Division is restructured.
Inclusion of the Welcomebeds online platform.
In the year 2003, Globalia Handling is set up and Viajes Ecuador is acquired.
2012
During 2005, Strong international expansion at the
Acquisition of the additional 50% of the tour oper-
Group’s Handling Division.
ator MK Tours in Miami. Sale of Globalia Handling
Air Europa and Travelplan begin to operate in France
Mexico and Pepemobile. Major restructuring of all
following the creation of Globalia France.
Group Divisions.
2006 - 2007
2013
Globalia strengthens its position in two particularly
Restructuring of a significant number of travel agents
key areas: the Handling Division, with new contracts
in the Retail Division. The Aerial Division continues to
won at Spanish airports, and the Hotel Division,
expand its long-distance routes and to reinforce its
which now boasts more than 10,000 rooms.
short and medium-distance routes.
Acquisition of Iberrail and a stake in MK Tours.
2014
A contract is signed to acquire 8 Boeing 787 “Dream-
Air Europa signs a contract with Boeing to purchase
liner” aircraft.
fourteen B787-9 planes with delivery expected be-
2008
tween February 2020 and October 2022.
A contract is signed to acquire 11
Embraer 195 aircraft with 120
seats and with the most advanced technology. The Hotel
Division operates more than
11.400 rooms.
2009
Viajes Halcón begins the pro-
2014 Annual Report
7
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GLOBALIA IN FIGURES
CONSOLIDATED
INCOME
CONSOLIDATED PROFIT
BEFORE TAXES
3,021,362
2010
3,145,613
2011
2,981,500
2012
3,113,065
2013
3,348,982
2014
CONSOLIDATED
EBITDA
110,128
145,945
184,949
2014
CONSOLIDATED
FIXED ASSETS
637,811
605,396
2011
429,724
2012
579,076
2014
OPERATING
PROFIT
57,919
2010
8
2013
2014
184,442
175,437
149,283
168,836
191,298
23,310
1,350
87,708
110,645
14,968
2010
2011
2012
592,600
2013
2014
52,053
2014
AVERAGE NO.
OF EMPLOYEES
2010
2013
40,938
2013
2012
2013
2012
-37,419
2011
47,411
2011
2012
2010
74,820
2012
1,301
2011
CONSOLIDATED
SHAREHOLDER’S EQUITY
2010
2011
23,543
2010
14.258
11,925
2013
11,367
2014
11,319
back to index
tinental Airlines, Delta Airlines and Aeromexico, further
DETAILS REVENUE PER
DIVISION 2014
consolidating its market position as a scheduled airline.
4%
3%
9%
Air Division
35%
1%
Wholesale Incoming
Division
In 2008 a deal was signed to purchase 11 Embraer 195
with 120 seats and with the most advanced technology.
The Embraer fleet allows the company to optimise
routes with a low passenger density.
Retail Division
In 2010, Air Europa became a full member of the
Hotel Division
SkyTeam Alliance.
Handling Division
During 2014, the airline continued to expand and
Others
plan new routes to South America, with destinations
48%
such as Salvador de Bahía, Santiago de Chile and
Sao Paulo, and continued to bolster its lines in Europe and its short-range flights in Spain. New routes
DETAILS REVENUE PER
GEOGRAPHICAL MARKET 2014
Spain
to Morocco, Germany and Miami were also opened.
22%
AVERAGE FLEET AND
FLIGHT TIME COMPLETED
3%
Rest of Europe
America
Others
171,959
165,468
12%
156,509
63%
158,271
AIR DIVISION
40.6
151,251
42.4
40.4
40.9
2012
2013
44.5
As for Globalia’s traditional businesses (Wholesale, Retail
and Air), these have continued to maintain their leading
positions within their respective market segments.
Air Europa was the country’s first privately owned
company to operate domestic scheduled flights in
Spain. It broke into the tourist sector when demand
was at its greatest, and its expansion and growth
have made decisive contributions to the maturity of
Spain’s commercial aviation market, which there can
be no doubt would never have taken on
2010
2011
Air fleet
2014
Flight time
the form it has today if Air Europa had not
played its pioneering role.
In its ongoing drive to achieve progress,
PASSENGERS CARRIED
BY AIR EUROPA
focusing at all times on customer satisfac-
2010
tion, Air Europa today has one of the most
2011
modern fleets in the sector.
In 2007, Air Europa became an associate
member of the Sky Team alliance, alongside
such airlines as Air France, KLM, Alitalia, Con-
2012
2013
2014
8,866,135
8,744,512
8,114,059
8,690,044
9,586,044
2014 Annual Report
9
back to index
The remaining 50% of MK Tours was also acquired,
AVERAGE AIR FLEET
COMPOSITION
2010
2011
2012
2013
2014
bringing the equity stake held to 100%.
5.61
27.02
2.00 6.00
9.12
23.63
2.00
11.00
18.73
11.00
18.65
11.00
19.87
0.92
In 2014, Touring Club consolidated its position as
the second leading Disney operator in the market
7.63
and Latitudes continued to grow as the Division’s
Premium segment.
9.73
10.50 0.78
11.61
2.00
REVENUES WHOLESALE
DIVISION 2010-2014
735
2010
648
2011
Embraer E195
2012
545
Boeing 737
2013
588
Boeing 767
2014
591
Airbus A330
Airbus A333
WHOSALE DIVISION
INCOMING DIVISION
The Welcome Incoming Services brand was set up
in 2010 to provide us with our own infrastructure
Ever since it was set up as a wholesale travel agen-
in the most significant destinations where Globalia
cy in 1986, Travelplan has been one of the leading
currently operates.
tour operators on the Spanish market with regard to
both its number of destinations and number of pas-
Welcome Incoming Services has been offering com-
sengers. Its offer is based on Air Europa’s network of
prehensive incoming services through its network
scheduled and charter flights, but also covers every
of offices in Spain: North, South and East Coasts;
type of product and destination.
Balearic and Canary Islands; Madrid and Barcelona
since 2010.
As part of its expansion policy, in May 2007 Travelplan acquired a 50% stake in the US tour operator
In 2011 it provided services in France, Mexico, Do-
MK Tours, based in Miami, specialising in the Domin-
minican Republic and London, which were previous-
ican Republic as a destination.
ly managed by third parties. Also, during 2011 some
393,000 passengers contracted our own incoming
Greats advances have taken place since 2009 with
services, and saw the introduction of the online ho-
the introduction of new technologies allowing for
tel accommodation sales platform “WELCOMEBEDS”
the development of the Internet business, this chan-
which will be providing services to all third parties,
nel now accounting for 90% of total sales.
Travel Agencies and Tour Operators, with a focus on
markets where our own incoming operations have a
The Division rolled out an international expansion
physical presence.
process with the opening of offices and sale of
tourism packages in France in 2010, along with the
In 2012 WELCOMEBEDS increased its sales and
launch of a new top-end line: Latitudes.
established its position in the online market. The
Division also began to market the Coasts product,
During 2012 and 2013 the Wholesale Division un-
covering the Northern, Central Eastern, Catalan and
derwent a substantial restructuring of its companies.
Andalusian coastlines of Spain.
10
back to index
2014 represents the year in which the new online
Acquired by Globalia in 2003, Viajes Ecuador is one
accommodation sales business consolidated with
of Spain’s best-represented travel agencies thanks
1.4 million “room nights”.
to its strong presence across the country, in particular in the North. It provides its customers with comCuba
OWN DESTINATION
OFFICES
2010
2011
2012
2013
1
1
1
1
1
1
1
1
1
1
1
1
1
1
prehensive advice, guaranteeing the utmost quality
in travel and accommodation.
United Kingdom
5
Dominican Republic
The Retail Division is today the undisputed Iberian
Mexico
market leader.
France
Spain Coast
Spain
4
6
In 2009 the group acquired a 75% stake in Tubillete.
com, an online travel agency specialising in the sale
of airline tickets.
The Division embarked on a franchise branch expansion programme under the Viajes Halcón brand
name, making progress in the field of the “e-commerce”, through the following brands: halconviajes.
4
com, viajesecuador.com and tubillete.com.
6
With the objective of staying in the market and
adapting to changing circumstances, 2013 has been
a year that has seen the large-scale restructuring of
Viajes Halcón and Viajes Ecuador, both in terms of
4
number of offices and number of employees: ap-
6
proximately 214 sales points were closed and 570
employees were made redundant.
2014
1
1
1
1
1
Thanks to these tough and difficult measures, the
Division returned to profit in 2014.
4
6
RETAIL DIVISION
Although the company’s founder hailed from Sala-
YEAR-ENDED SALES
OFFICES
2010
manca, it was in Cáceres that the first Viajes Halcón
agency opened for business in 1971. Not long after-
2011
wards, Juan José Hidalgo set up his company’s second branch on Paseo de Anaya, in the city of his birth.
With the acquisition of Air Europa in 1991, Viajes Halcón experienced its great boom.
Today, Halcón Viajes is established as the undisputed leader on the Spanish holiday market in terms of
number of points of sale, creation of exclusive products and the outstanding training of its staff.
2012
2013
2014
937
108
967
98
941
79
799
68
246
813
64
239
376
328
294
Viajes Halcón
TCI Cortés XXI
Halcon Viagens
Viajes Ecuador
2014 Annual Report
11
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HOTEL ROOM INVENTORY
BY AREA 31/10/2014
11.6%
Spain-Peninsula
Balearic Islands
HOTEL DIVISION
with the construction of the Hotel Palace de Muro
Morocco
(Majorca) and the complete refurbishment of the
Dominican
Republic
Hotel Orotava (Tenerife).
Cuba
In 2010 the Division launched its new brand Be Live.
In 2011 Globalia’s portfolio of hotels included 22 establishments with almost 6.200 rooms, operating in
Spain (on the mainland, and in the Balearic and Canary Islands), the Mexican Caribbean, the Dominican Republic, Cuba and Morocco, with the brand Be
Live Hotels.
5.0%
5.8%
32.7%
Portugal
HANDLING DIVISION
Groundforce provides ground support services for
the Group’s airline and third parties.
In Spain, following the licences awarded at the end
of 2006, Groundforce has succeeded in position-
In 2012 the Division embarked on a new business
model with two franchise hotels. It meanwhile gave
up its Mexican Caribbean operations.
with a portfolio of 10 hotels under lease, 1 under
management and a total of 2,262 rooms. During that
year, the Group opened its first hotel in Portugal under a management contract and acquired ownership of the Canoa Hotel in the Dominican Republic.
Furthermore, the works for the extension and improvement of the hotels in the Dominican Republic
continued and consolidated.
The positive numbers seen in 2014 confirm the
change of trend in this Division’s results.
HOTELS PORTFOLIO
31/10/2014
7
SPAINMEDITERRANEAN
D. REPUBLIC
CUBA
Owned
3
ing itself as the second-biggest handling operator in
terms of volume and licences awarded, and is the
only operator with presence at the first two Spanish
airports, Madrid and Barcelona.
In 2013 the Division took on the Luabay Hotel Chain
12
6.2%
Canary Islands
Globalia started operating hotels in the year 2000,
34%
4.8%
The Group also acquired a 100% stake in Groundforce Cargo during 2006, providing cargo services at
Spanish airports.
In 2014 the Handling Division was operating in 7 airports in Spain and 1 in Morocco providing passenger
ground support services, while also providing cargo
services at 14 airports in Spain.
GROUND HANDLING EVOLUTION
AIRPORTS OPERATED AND AEA
SELF-HANDLING 2010-2014
2010
10
4
2011
2012
3
2013
2
2014
Leased
Management
7
7
3
9
7
7
3
9
7
1
6
7
1
7
7
1
8
Spain
Portugal
Mexico
Morocco
Autohandling
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Globalia Corporación Empresarial, S.A. and Subsidiaries
CONSOLIDATED BALANCE SHEETS 31 OCTOBER 2014 AND 2013 (EXPRESSED IN THOUSANDS OF EUROS)
ASSETS
note
2014
2013
Intangible assets Note 8
- Goodwill on consolidation
Note
- Concessions - Patents, licences, trademarks and similar rights - Goodwill Note 9
- Computer software - Greenhouse gas emission allowances - Other intangible assets Property, plant and equipment Note 10
- Land and buildings - Technical installations, machinery, equipment, furniture and other items - Under construction and advances Investment property Note 11
- Land - Buildings Non-current investments in Group companies and associates Note 15
70,450
15,537
2,513
513
11,087
30,724
6,777
3,299
504,333
237,648
242,674
24,011
4,294
798
3,496
384
78,295
20,938
2,506
1,014
13,258
34,494
3,566
2,519
507,767
236,400
252,640
18,727
6,538
779
5,759
257
- Equity instruments - Equity-accounted investees Non-current investments Note 17
- Equity instruments - Loans to third parties - Other financial assets Deferred tax assets Note 29
(9)
393
97,091
191
1,134
95,766
22,171
-
257
66,917
121
3,040
63,756
21,837
Total non-current assets
698,723
681,611
Non-current assets held for sale Note 7
Inventories Note 19
- Raw materials and other supplies - Advances to suppliers Trade and other receivables Note 17
- Trade receivables – current
Note 17
- Other receivables - Personnel - Current tax assets Note 29
- Public entities, other Note 29
Current investments
Note 17
- Equity instruments - Loans to companies - Debt securities - Derivatives Note 18
- Other financial assets Prepayments for current assets Note 20
Cash and cash equivalents Note 21
- Cash - Cash equivalents -
21,133
15,876
5,257
280,816
222,917
21,032
904
5,735
30,228
73,948
200
1,378
55
4,694
67,621
15,445
84,706
77,029
7,677
11,058
18,215
13,696
4,519
298,259
229,639
30,307
1,003
5,728
31,582
28,428
4,996
3,056
1,315
586
18,475
19,560
109,912
92,084
17,828
Total current assets
476,048
485,432
TOTAL ASSETS1,174,7711,167,043
The accompanying notes form an integral part of the annual accounts.
14
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CONSOLIDATED BALANCE SHEETS 31 OCTOBER 2014 AND 2013 (EXPRESSED IN THOUSANDS OF EUROS)
EQUITY AND LIABILITIES
note
2014
2013
Capital and reserves Note 22
191,297
- Capital - Registered capital 16,894
- Reserves 101,629
- Reserves in consolidated companies
51,223
- Reserves in equity-accounted companies
(133)
- Profit for the year attributable to the Parent 27,684
- (Interim dividend) (6,000)
Valuation adjustments 6,295
- Available-for-sale financial assets (236)
- Hedging transactions Note 18
3,071
- Translation differences Note 22
3,460
Grants, donations and bequests received
-
- Grants, donations and bequests received
-
Non-controlling interests
Note 23
1,839
168,836
Total equity 199,431
167,229
Non-current provisions Note 24
- Long-term employee benefits
- Other provisions
Non-current payables Note 26
- Loans and borrowings - Finance lease payables Note 12
- Derivatives Note 18
- Other financial liabilities Deferred tax liabilities Note 29
89,297
180
89,117
128,097
29,308
95,016
280
3,493
17,707
89,777
180
89,597
150,800
50,706
95,261
418
4,415
15,524
Total non-current liabilities 235,101
256,101
Liabilities associated with non-current assets held for sale Note 7
Current provisions Note 24
- Environmental actions - Other provisions Current payables Note 26
- Loans and borrowings - Finance lease payables Note 12
- Derivatives Note 18
- Other financial liabilities Trade and other payables Note 26
- Current payables to suppliers - Other payables - Personnel (salaries payable) - Current tax liabilities Note 29
- Public entities, other Note 29
- Advances from customers -
68,485
909
67,576
81,969
14,541
14,713
30,632
22,083
396,046
297,783
18,381
27,659
9,698
20,842
21,683
6,576
45,858
646
45,212
65,597
28,876
16,145
1,246
19,330
403,458
302,304
21,200
24,012
789
24,893
30,260
Total current liabilities
740,239
743,713
TOTAL EQUITY AND LIABILITIES
1,174,771
1,167,043
16,894
100,525
21,775
(188)
29,830
-
(3,406)
(224)
(775)
(2,407)
174
174
1,625
2014 Annual Report
15
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CONSOLIDATED INCOME STATEMENTS FOR THE YEARS ENDED 31 OCTOBER 2014 AND 2013
(EXPRESSED IN THOUSANDS OF EUROS)
note
2014
2013
Revenues Note 32
3,292,274
3,047,071
- Services rendered
3,292,274
3,047,071
Changes in inventories of finished goods and work in progress
-
(2)
Self-constructed assets11,55910,173
Supplies
Note 32(1,671,362)(1,569,493)
- Merchandise used
(1,529)
(1,575)
- Raw materials and consumables used
(1,631,524)
(1,533,250)
- Subcontracted work
(38,266)
(34,619)
- Impairment of merchandise, raw materials and other supplies
(43)
(49)
Other operating income
45,149
55,821
- Non-trading and other operating income
45,149
55,821
Personnel expenses
Note 32
(450,598)
(436,956)
- Salaries and wages
(355,925)
(347,195)
- Employee benefits expense
(94,673)
(89,757)
- Provisions
-
(4)
Other operating expenses
(1,043,286)
(959,721)
- Losses, impairment and changes in trade provisions
Note 17
- Other operating expenses
Amortisation and depreciation
Notes 8, 9 and 10
Impairment and gains/(losses) on disposal of fixed assets
- Impairment and losses
- Losses on disposal and other
Note 32
Other gains/(losses)
(3,725)
(1,039,561)
(53,661)
(20,642)
(7,442)
(13,200)
1,213
(6,532)
(953,189)
(57,466)
(771)
(211)
(560)
(948)
Results from operating activities
110,646
87,708
Finance income3,6873,228
- Marketable securities and other financial instruments
- Group companies and associates
159
409
- Other3,5282,819
Finance costs(29,821)(38,404)
- Other(27,465)(38,027)
- Provision adjustments
(2,356)
(377)
Change in fair value of financial instruments
(30,632)
-
- Trading portfolio and other
(30,632)
-
Exchange gains/(losses)(3,689)(8,172)
- Other exchange losses
(3,689)
(8,172)
Impairment and gains/(losses) on disposal of financial instruments
1,726
(3,477)
- Impairment and losses
Note 16
(42)
(5,531)
- Gains on disposal and other
Note 2
1,768
2,054
Net finance cost/income
(58,729)
(46,825)
Share of profits of equity-accounted investees
Profit before income tax
Income tax
Note 29
136
52,053
(24,086)
55
40,938
(10,791)
Profit for the year
27,967
30,147
Profit attributable to the Parent
Profit attributable to non-controlling interests
Note 22
27,684
283
29,830
317
16
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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED 31 OCTOBER 2014 AND 2013
A) CONSOLIDATED STATEMENTS OF RECOGNISED INCOME AND EXPENSE
FOR THE YEARS ENDED 31 OCTOBER 2014 AND 2013 (EXPRESSED IN THOUSANDS OF EUROS)
note
2014
2013
Consolidated profit for the year
27,967
30,147
Income and expense recognised directly in equity
- Cash flow hedges
4,658
(1,077)
- Translation differences
Differences on translation into presentation currency 5,854(4,791)
- Grants, donations and bequests
3,269
3,296
- Other(159)(353)
- Tax effect
(2,378)
(560)
Total income and expense recognised directly in consolidated equity
11,244
(3,485)
Amounts transferred to the consolidated income statement
- Cash flow hedges
- Grants, donations and bequests
- Tax effect
Total amounts transferred to the consolidated income statement
835
(3,289)
736
(1,718)
(5,334)
(3,499)
2,650
(6,183)
Total recognised consolidated income and expense
37,493
20,479
Total recognised income and expense attributable to the Parent
37,210
20,162
Total recognised income and expense attributable to non-controlling interests
283
317
2014 Annual Report
17
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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED 31 OCTOBER 2014 AND 2013
B) STATEMENT OF TOTAL CHANGES IN EQUITY FOR THE YEAR ENDED 31 OCTOBER 2014 (EXPRESSED IN THOUSANDS OF EUROS)
Balance at
31 October 2013
Corrections of errors in
2013 and prior years
Adjusted balance
at 1 November 2013
Recognised income
and expense
Transactions with
shareholders or owners
Grants,
Nondonations
and bequests controlling
interests
received
Capital
Reserves
and prior years’
profit and loss
Profit/(loss)
for the year
attributable to
the Parent
16,894
122,112
29,830
-
(3,406)
174
1,625
167,229
-
487
-
-
-
-
-
487
16,894 122,599
-
-
Interim
dividend
Valuation
adjustments
Total
1,625167,716
29,830
-(3,406)
174
27,684
-9,700 (174)
28337,493
Distribution of profit
for the year
Reserves
-
Changes to businesses
or companies
(see note 2 (b))
-
291
Other movements
-
16,894
Balance at
31 october 2014
29,830
(29,830)
-
-
-
-
-
-
-
-
-
-
291
-
-
(6,000)
-
-
(69)
(6,069)
152,720
27,684
(6,000)
6,294
-
1,839
199,431
B) STATEMENT OF TOTAL CHANGES IN EQUITY FOR THE YEAR ENDED 31 OCTOBER 2013 (EXPRESSED IN THOUSANDS OF EUROS)
Balance at
31 October 2012
Corrections of errors in
Adjusted balance
at 1 November 2012
Capital
Reserves
and prior years’
profit and loss
Profit/(loss)
for the year
attributable to
the Parent
16,894
151,895
(26,159)
-
(2,059)
-
16,894149,836
(26,159)
Grants,
donations
and bequests
received
Noncontrolling
interests
Total
6,120
316
1,412
150,478
-
-
-
(2,059)
Valuation
adjustments
6,120
316
1,412
148,419
Recognised income
and expense
-
- 29,830(9,526) (142) 317
20,479
Transactions with
shareholders or owners
Distribution of profit/
(Application of loss)
for the year
Reserves
- (26,159)
26,159
-
-
-
Disposals of businesses
or companies (see note 2 (b))
-
(1,565)
-
-
-
-
(1,565)
Other movements
Balance at
31 October 2013
-
-
-
-
-
(104)
(104)
16,894
122,112
29,830
(3,406)
174
1,625
167,229
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CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
31 OCTOBER 2014 AND 2013 (EXPRESSED IN THOUSANDS OF EUROS)
2014
2013
CONSOLIDATED CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated profit for the year before tax
52,053
40,938
Adjustments for:
- Amortisation and depreciation
53,661
57,466
- Impairment
30,993
6,532
- Change in provisions
2,356
2,500
- Grants recognised in the income statement
(174)
-
- Gains/losses on disposal of fixed assets
20,642
1,719
- Gains/losses on disposal of financial instruments
(1,768)
3,477
- Finance income
(3,687)
(3,226)
- Finance costs
27,465
21,352
- Exchange gains/losses
(23,579)
- Change in fair value of financial instruments
30,674
- Other income and expenses
778
(10,173)
- Share of profit/(loss) of equity accounted investees
(136)
Changes in consolidated operating assets and liabilities
- Inventories
(2,918)
(2,585)
- Trade and other receivables
13,718
(4,062)
- Other current assets
4,124
(5,563)
- Trade and other payables
(20,042)
(14,318)
- Other current liabilities
(11,494)
60,820
- Other non-current assets and liabilities
(57,505)
(1,198)
Other consolidated cash flows from operating activities
- Interest paid
(22,874)
(21,352)
- Dividends received
-
476
- Interest received
3,687
2,750
- Income tax paid/(received)
(15,752)
(9,739)
Consolidated cash flows from operating activities
80,222
125,814
CONSOLIDATED CASH FLOWS FROM INVESTING ACTIVITIES
Payments for investments
- Intangible assets
(14,582)
(731)
Property, plant and equipment
(35,976)
(72,796)
Investment property
(188)
(4,264)
Other financial assets
(35,849)
(11,050)
Proceeds from sale of investments
- Associates
-
2,145
Intangible assets
3,715
199
8,740
11,360
19,114
36,934
Non-current assets held for sale
11,058
41,682
Consolidated cash flows from investing activities
(43,968)
2,141
CONSOLIDATED CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from and payments for financial liability instruments
Issue
- Loans and borrowings
10,407
13,500
- Group companies and associates
-
13,297
- Others
2,753
- Redemption and repayment of
- Loans and borrowings
(46,488)
(101,971)
- Finance lease payables
(14,632)
- Others
(7,498)
Dividends and interest on other equity instruments paid Dividends
(6,000)
-
Consolidated cash flows used in financing activities
(61,458)
(75,174)
Net increase/decrease in cash and cash equivalents
(25,204)
52,781
Cash and cash equivalents at beginning of year
Cash and cash equivalents at year end
109,912
84,706
57,131
109,912
2014 Annual Report
19
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NOTES TO THE CONSOLIDATED
ANNUAL ACCOUNTS
1. NATURE, ACTIVITIES AND
COMPOSITION OF THE GROUP
Globalia Corporación Empresarial, S.A. (hereinafter
the Parent) was incorporated in Palma de Mallorca on
14 May 1997. Its statutory activity consists of the rendering of management, advisory and other business
services as well as the holding of fixed assets, investments, bonds, shares and interests in other companies. In 1998 the Parent changed its name from GAE
Corporación Empresarial, S.A. to its current name.
The Parent’s registered office is located in Polígono
de Son Noguera, Llucmajor, Balearic Islands.
The Globalia Group (hereinafter the Group) operates in the transportation, travel and tourism sector
and basically comprises: the Parent, as head of the
Group; Air Europa Líneas Aéreas, S.A.U., which acts
as an air carrier and has a fleet of 45 jet aircraft (44
aircraft in 2013); Globalia Business Travel, S.A.U. and
Globalia Travel Club Spain, S.L.U., which are present
in the tour operator sector Viajes Halcón, S.A.U. and
Viajes Ecuador S.A.U., with 1,052 points of sale in
Spain (1,045 points of sale in 2013) and Halcon Viagens e Turismo Lda, with 64 points of sale in Portugal
(68 points of sale in 2013), which sell tourism-related
products to travel agencies; Welcome Incoming Services, SLU, which provides incoming services; the
joint ventures along with other venturers. The government concessions operated by the temporary joint
ventures (UTEs), that provide passenger handling
services expire between the end of 2013 and 2014
although not the concession of Iberia Globalia Cargo Barcelona U.T.E., which provides cargo services.
These concessions are being extended until they are
awarded to a new operator through the tender processes that have been started this year. At the date
these consolidated annual accounts were authorised
for issue the handling services in Spanish airports had
not been awarded to a new concessionaire.
Hotel division, headed by Be Live Hotels, S.L.U. and
operating a total of 29 hotels in Spain and the Caribbean (31 hotels in 2013); Globalia Handling, S.A.U.,
as head of the Handling division, which provides
2. BASIS OF PRESENTATION
ground handling services at the main Spanish air-
a) FAIR PRESENTATION
ports; Globalia Autocares, S.L., which has a fleet of
The accompanying consolidated annual accounts
43 coaches (41 in 2013) and Globalia Mantenimiento
have been prepared on the basis of the accounting
Aeronáutico, S.L.U., which owns and operates the
records of Globalia Corporación Empresarial, S.A.
maintenance hangar located at Palma de Mallorca
and subsidiaries. The consolidated annual accounts
airport. The Group also includes other entities that
for the year ended 31 October 2014 (hereinafter
provide ancillary services for the core activities.
2014) have been prepared in accordance with prevailing legislation, the Spanish General Chart of Ac-
The Group also holds interests in associates and
counts approved by Royal Decree 1514/2007 of 16
jointly controlled entities and participates in several
November 2007, and Royal Decree 1159/2010 gov-
20
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erning the preparation of consolidated annual ac-
merger was 1 November 2013 and the absorbee
counts, to present fairly the consolidated equity and
has been included at its carrying amount in the con-
consolidated financial position at 31 October 2014
solidated accounts at 31 October 2013.
and consolidated results of operations, changes in
consolidated equity and consolidated cash flows for
Pepeviajes, S.L.U. has merged with Viajes Halcón,
the year then ended.
S.A.U. The effective date of the merger was 1 November 2013 and the absorbee has been included
The directors of the Parent consider that these con-
at its carrying amount in the consolidated accounts
solidated annual accounts, authorised for issue on
at 31 October 2013.
27 January 2015, will be approved by the Parent’s
shareholders.
Additions to the consolidated Group in 2013 were
as follows:
As required under prevailing legislation, the consolidated balance sheet, consolidated income state-
Canoa Spain, S.L. (head of Hotel Canoa, S.A., a Do-
ment, consolidated statement of changes in equity
minican company, which owns the Be Live Canoa
and consolidated statement of cash flows for 2014
Hotel in the Dominican Republic).
include comparative figures for the previous year approved by the shareholders at their annual general
Luabay Hoteles y Apartamentos, S.L. (head of Inver-
meeting held on 25 April 2014. The notes to the con-
siones Costa Adeje, S.A. and Explotadora Hotelera
solidated accounts also include quantitative informa-
Luabay, S.L., which operate hotels in the Balearic Is-
tion on the prior year, except where an accounting
lands and the Canary Islands).
standard specifically states that this is not necessary.
Temporary joint ventures belonging to Globalia
b) COMPARATIVE INFORMATION
Autocares, S.A. (Globalia Chapin UTE, La Hispano,
(i) Changes in the consolidated Group
Monforte, Castromil Globalia UTE; Mombus Globalia
Changes in the consolidated group in 2014 were as
Barcelona UTE; and Ecuador GBT Air Europa Auto-
follows:
cares UTE): airport transport management entities.
The consolidated income statement includes 16%
The percentage of interest held in Mundosenior IV
of the additional profit/loss from Mundosenior IV
UTE, Euroseniors UTE, Mundosenior III UTE, Euro-
UTE, Euroseniors UTE, Mundosenior III UTE, Euro-
senior UTE, Mundosocial, AIE, and Ocio y Turismo
senior UTE, Mundosocial, AIE, and Ocio y Turismo
Novotours, AIE, has been raised by 16%; in 2012 the
Novotours, AIE, because the interests therein were
interest held in each of these was 33%. At 31 Octo-
increased at the end of 2013 and, therefore, these
ber 2013 the Group has included 50% of the bal-
were included in the balance sheet.
ance sheet and 33% of the profit/loss for the year in
the consolidated annual accounts.
The following dormant companies have been wound
up: Ciba Inversiones, S.A., Julma Development, N.V.,
SR Technics Spain, S.A., accounted for under the eq-
and Halcon Mediaçao de Seguros, Lda.
uity method in 2012, was sold in 2013 for Euros 2,200
thousand, generating a profit of Euros 2,054 thousand.
The following temporary joint ventures, in which the
Mundosenior 3 UTE, Eurosenior UTE and UTE Euro-
c) FUNCTIONAL AND PRESENTATION
CURRENCY
senior 2011- 2012.
The figures disclosed in the consolidated annual
Group had a 50% interest, have been wound up:
accounts are expressed in thousands of Euros, the
Globalcentro Centro Especial de Empleo, S.L. has
functional and presentation currency of the Parent
merged with its sole shareholder Globalia Corpo-
and most of the Group companies, rounded off to
ración Empresarial, S.A. The effective date of the
the nearest thousand.
2014 Annual Report
21
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d) CRITICAL ISSUES REGARDING THE
VALUATION AND ESTIMATION OF
RELEVANT UNCERTAINTIES AND
JUDGEMENTS USED WHEN APPLYING
ACCOUNTING PRINCIPLES
rates. The key assumptions employed when deter-
Relevant accounting estimates and judgements and
on values and impairment.
mining fair value less costs to sell and value in use
include growth rates, the weighted average cost of
capital and tax rates. The estimates, including the
methodology used, could have a significant impact
other estimates and assumptions have to be made
when applying the Group’s accounting principles to
Group management estimates the useful life of as-
prepare the consolidated annual accounts. A sum-
sets and their residual value. Given the complexity
mary of the items requiring a greater degree of
and relevance of the residual value of the aircraft
judgement or which are more complex, or where the
owned or held under finance leases by the Group,
assumptions and estimates made are significant to
management uses reports prepared by independ-
the preparation of the consolidated annual accounts
ent third parties to estimate this value.
is as follows:
Valuation allowances for bad debts and the review of
(i) Relevant accounting estimates and assumptions
individual balances based on customers’ credit rat-
The Group tests goodwill for impairment on an
ings, current market trends and the historical analy-
annual basis. The calculation of the recoverable
sis of bad debts at an aggregated level are subject to
amount of a division to which goodwill has been al-
a high degree of judgement.
located requires the use of estimates. The recoverable amount is the higher of fair value less costs to
Air Europa Líneas Aéreas, S.A.U. is subject to regula-
sell and value in use. The Group generally uses cash
tory processes and inspections by government bod-
flow discounting methods to calculate these values.
ies in charge of air traffic. The Parent recognises a
Discounted cash flow calculations are based on five-
provision if it is probable that an obligation will ex-
year projections in the budgets approved by the
ist at year end which will give rise to an outflow of
Group. The cash flows take into consideration past
resources embodying economic benefits and the
experience and represent the Group’s best estimate
outflow can be reliably measured. Legal processes
of future market performance. From the fifth year
usually involve complex legal issues and are subject
cash flows are extrapolated using individual growth
to substantial uncertainties. As a result, management uses significant judgement when
determining whether it is probable that
the process will result in an outflow of
resources embodying economic benefits
and estimating the amount. The calculation of provisions for major repairs is
subject to a high degree of uncertainty
given that it is based on an individual
analysis of the different components
subject to review for each aircraft. Air
Europa Líneas Aéreas, S.A.U. recognises
provisions for major repairs when the total cost can be reliably measured.
Following usual sector practice, Air Europa Líneas Aéreas, S.A.U. prepares an
estimate of the revenues from tickets
sold and not used and that will not be
used in the future.
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3. DISTRIBUTION OF PROFIT
OF THE PARENT
nancial and operating policies of an entity so as to
The distribution of profit and reserves of the Parent
er entities that are exercisable or convertible at the
for the year ended 31 October 2013, approved by
end of each reporting period are considered.
obtain benefits from its activities. In assessing control potential voting rights held by the Group or oth-
the shareholders at their annual general meeting
held on 25 April 2014, is as follows:
For presentation and disclosure purposes only,
Group companies are considered to be those con-
THOUSANDS OF EUROS
Basis of distribution
Profit for the year
Distribution
Other reserves
trolled by one or more individuals or entities acting
jointly or under the same management through statutory clauses or agreements.
3,895
Control may also be exercised without ownership by
3,895
participating in the risks and rewards of the entity;
such companies are known as Special Purpose En-
The proposed distribution of the Parent’s profit for
2014 to be submitted to the shareholders for approval at their annual general meeting is as follows:
tities (SPE). Consequently, Pony Express Trust was
included in the consolidated Group. This trust was
set up in 2011 to provide guarantees to the manufacturer and the financial institution regarding compliance with the contract for the acquisition of five
THOUSANDS OF EUROS
aircraft until their delivery to Air Europa Líneas Aé-
Basis of distribution
Profit for the year
29,221
Distribution
Other reserves
23,221
Dividends 6,000
reas, S.A.U. The aircraft were delivered in 2013 and
Special Purpose Entity. However, the Group has not
2014, therefore at year end this entity was wound up
(see note 10 (f)). The balance sheet of Pony Express
Trust has been fully consolidated in the Group’s consolidated annual accounts, as it is considered to be a
29,221
consolidated the special purpose entity called Palma, Limited that has assumed the contractual posi-
At 31 December non-distributable reserves of the
tion for the acquisition of five Boeing 787-8 because
Parent are as follows:
it is controlled by a Japanese corporation, which retains the risks and rewards of this transaction. After
THOUSANDS OF EUROS
delivery Air Europa Líneas Aéreas, S.A.U. will operate
2014
2013
these aircraft under operating leases.
Parent reserves:
Legal reserve
3,379
3,379
The consolidated annual accounts include the profit/
loss of a subsidiary, See Europe Tours Limited, registered in the United Kingdom, which has availed of
the exemption from the audit of individual annual
4. SIGNIFICANT ACCOUNTING
POLICIES
accounts provided for in article 479a of the UK Com-
a) SUBSIDIARIES
Subsidiaries are fully consolidated.
Subsidiaries, including special purpose entities, are
Information on the subsidiaries included in the con-
those entities over which the Company, either di-
solidated Group is presented in Appendix I.
panies Act of 2006.
rectly or indirectly, through subsidiaries, exercises
control as defined in article 42 of the Spanish Code
Information on companies that have not been con-
of Commerce. Control is the power to govern the fi-
solidated because their impact on the fair presen-
2014 Annual Report
23
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tation of the consolidated annual
accounts is immaterial has been
included in Appendix II.
The income, expenses and cash
flows of subsidiaries are included
in the consolidated annual accounts from their acquisition date,
which is the date on which the
Group obtained effective control of
the aforementioned subsidiaries.
Subsidiaries are excluded from the
consolidated group from the date
on which control is lost.
Transactions and balances with subsidiaries and un-
Chart of Accounts, have been recognised using the
realised gains or losses have been eliminated upon
acquisition method. Business combinations that oc-
consolidation. Nevertheless, unrealised losses have
curred prior to that date were recognised in accord-
been considered as an indicator of impairment of
ance with accounting principles prevailing at that
the assets transferred.
time, taking into account the necessary corrections
and adjustments at the transition date.
The Parent and its subsidiaries form an integrated
group engaged in transport, travel and tourism and
However, mergers, spin-offs and non-monetary con-
therefore transactions between the airline, tour op-
tributions consisting of a business not previously in-
erators and travel agencies are very significant. All
cluded in the consolidated group carried out between
accounts and transactions between consolidated
Group companies are recognised as explained below.
entities, particularly the aforementioned businesses,
have been eliminated on consolidation, including in-
The acquisition date is the date on which the Group
vestments between these entities, giving rise, where
obtains control of the acquiree.
applicable, to the corresponding goodwill on consolidation.
The cost of the business combination is calculated as
the sum of the acquisition-date fair values of the as-
The subsidiaries’ accounting policies have been
sets transferred, the liabilities incurred or assumed,
adapted to Group accounting policies, for like trans-
the equity instruments issued and any consideration
actions and other events in similar circumstances.
contingent on future events or compliance with certain conditions in exchange for control of the busi-
The timing of the annual accounts or financial state-
ness acquired.
ments of subsidiaries has been harmonised and
relevant adjustments have been made to reflect
The cost of a business combination excludes any
the effect of transactions and significant events oc-
payments that do not form part of the considera-
curred between the closing date of subsidiaries and
tion given in exchange for the acquired business. Ac-
the closing date of the Parent.
quisition costs are recognised as an expense when
b) BUSINESS COMBINATIONS
incurred.
As the Group applied the third transitional provision
The Group recognises the assets acquired and li-
of Royal Decree 1514/2007, only those business
abilities assumed at fair value at the acquisition
combinations that occurred on or after 1 January
date. Non-controlling interests in the acquiree are
2008, the date of transition to the Spanish General
recognised at the proportionate interest in the fair
24
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value of the net assets acquired. Liabilities assumed
ance sheet within equity. Non-controlling interests’
include any contingent liabilities that represent pre-
share in profit or loss for the year is also presented
sent obligations arising from past events for which
separately in the consolidated income statement.
the fair value can be reliably measured. The Group
also recognises indemnification assets transferred
The profit or loss and changes in equity of the sub-
by the seller at the same time and following the
sidiaries attributable to the Group and non-control-
same measurement criteria as the item that is sub-
ling interests after consolidation adjustments and
ject to indemnification from the acquired business,
eliminations, is determined in accordance with the
taking into consideration, where applicable, the in-
percentage ownership at year end.
solvency risk and any contractual limit on the indemnity amount.
The profit or loss and recognised income and expense
of subsidiaries are allocated to equity attributable to
This criterion is not applicable to non-current assets
the Parent and to non-controlling interests in propor-
or disposal groups classified as held for sale, long-
tion to their investments, even if this results in a balance
term defined benefit obligations, share-based pay-
receivable from non-controlling interests. Agreements
ment transactions, deferred tax assets and liabilities,
entered into between the Group and non-controlling
intangible assets arising from reacquired rights pre-
interests are recognised as a separate transaction.
viously granted to the acquiree and intangible assets
for which quoted prices in active markets are una-
Transactions to increase or reduce non-controlling
vailable, where negative goodwill results from the
interests in a subsidiary in which control is retained
business combination.
are recognised as equity instrument transactions.
Consequently, no new acquisition cost arises on
With the exception of lease contracts, the assets
increases nor is a gain recorded on reductions;
acquired and liabilities assumed are classified and
rather, the difference between the consideration
designated for subsequent measurement based on
transferred or received and the carrying amount
contractual agreements, economic terms, account-
of the non-controlling interests is recognised in the
ing and operating policies and any other conditions
reserves of the Parent, without prejudice to reclas-
that exist at the acquisition date.
sifying consolidation reserves and reallocating other
income and expenses between the Group and the
The income, expenses and cash flows of the ac-
non-controlling interests. When a Group’s interest in
quiree are included in the consolidated annual ac-
a subsidiary increases, non-controlling interests are
counts from the acquisition date.
recognised at their share of the consolidated net assets, including goodwill on consolidation.
The business combinations that have arisen
during the year are explained in note 5.
c) NON-CONTROLLING INTERESTS
Non-controlling interests in subsidiaries
acquired after the transition date are recognised at the acquisition date at the proportional part of the fair value of the identifiable
net assets. Non-controlling interests in subsidiaries acquired prior to the transition date
were recognised at the proportional part of
the equity of the subsidiaries at the date of
first consolidation. Non-controlling interests
are presented separately from equity attributable to the Parent in the consolidated bal-
2014 Annual Report
25
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d) ASSOCIATES
terms of timing and measurement, applying the poli-
Associates are companies over which the Parent, ei-
cies described for subsidiaries.
ther directly, or indirectly through subsidiaries, exercises significant influence. Significant influence is the
The timing of the annual accounts or financial state-
power to participate in the financial and operating
ments of associates has been harmonised and
policy decisions of the investee but is not control or
joint control over those policies. The existence of po-
tential voting rights that are exercisable or convert-
curred between the closing date of associates and
ible at the end of each reporting period, including
the closing date of the Parent.
potential voting rights held by the Group or other
entities, are considered when assessing whether an
(i) Impairment
entity has significant influence.
The Group applies the impairment criteria set out
in the section on financial instruments to determine
Investments in associates are accounted for using
whether additional impairment losses to those al-
the equity method from the date that significant in-
ready recognised on the net investment in the asso-
fluence commences until the date that significant in-
ciate or on any other financial asset held should be
fluence ceases. However, associates classified at the
recognised as a result of applying the equity method.
acquisition date as non-current assets or disposal
groups held for sale are recognised at fair value less
Impairment is calculated by comparing the carrying
costs to sell.
amount of the net investment in the associate with its
recoverable amount. The recoverable amount is the
Details of equity-accounted investees are included
higher of value in use and fair value less costs to sell.
in Appendix III.
Value in use is calculated based on the Group’s
The Group’s share of the profit or loss of an associ-
share of the present value of future cash flows ex-
ate from the date of acquisition is recognised as an
pected to be derived from ordinary activities and
increase or decrease in the value of the investments,
from the disposal of the asset, or the estimated cash
with a credit or debit to share of the profit or loss for
flows expected to be received from the distribution
the year of equity-accounted investees in the con-
of dividends and the final disposal of the investment.
solidated income statement. The Group’s share of
all recognised income and expenses of associates
Nonetheless, and in certain cases, unless better evi-
obtained after the acquisition date is recognised as
dence of the recoverable amount of the investment
an increase or decrease in the
value of investments in associates, with a balancing entry in
consolidated equity. The distribution of dividends is recognised
as a decrease in the value of the
investment. The Group’s share of
profit or loss, including impairment losses recognised by the
associates, is calculated based
on income and expenses arising
from application of the acquisition method.
The accounting policies of associates have been harmonised in
26
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is available, when estimating impairment of these
also include the proportional part corresponding to
types of assets, the investee’s equity is taken into
the Group by virtue of the agreements reached.
consideration, adjusted, where appropriate, to generally accepted accounting principles and standards
Reciprocal transactions, balances, income, expenses
in Spain, corrected for any net unrealised gains ex-
and cash flows have been eliminated in proportion
isting at the measurement date.
to the interest held by the Group in joint ventures.
All dividends have been eliminated.
e) JOINT VENTURES
Joint ventures are those in which there is a statutory
Unrealised gains and losses from non-monetary
or contractual agreement to share the control over
contributions or downstream transactions in joint
an economic activity, in such a way that strategic fi-
ventures are recognised based on the substance of
nancial and operating decisions relating to the activ-
the transaction. Where assets are retained by the
ity require the unanimous consent of the Parent and
joint ventures and the Group has transferred the
the remaining ventures.
significant risks and rewards of ownership, only the
portion of the gain or loss that is attributable to the
The joint ventures of the Group take the form of in-
interests of the other venturers is recognised. Unre-
terests in jointly controlled entities and jointly con-
alised losses are not eliminated if they provide evi-
trolled operations and assets.
dence of an impairment loss.
Details of jointly controlled entities are provided in
The Group only recognises the portion of gains and
Appendix IV.
losses on transactions in joint ventures that is attributable to the interests of the other venturers. In
Jointly controlled operations and assets are those in
the event of losses, the Group applies the same rec-
which there is a statutory or contractual agreement
ognition criteria as those described in the previous
to share the control over an economic activity, such
paragraph.
that strategic financial and operating decisions relating to the activity require the unanimous consent of
The Group has made the necessary measurement
the Group and the other venturers.
and timing harmonisation adjustments to incorporate its joint ventures into the consolidated annual
Information relating to jointly controlled operations,
accounts.
referred to as temporary joint ventures, is presented
in Note 6.
The timing of the annual accounts or financial statements of joint ventures has been harmonised and
Investments in jointly controlled entities are pro-
portionately consolidated from the date on which
joint control is obtained until the date joint control
curred between the closing date of joint ventures
ceases. However, investments that are classified as
and the closing date of the Parent.
non-current assets or disposal groups held for sale
at the date joint control is obtained are recognised
at fair value less costs to sell.
The Group recognises assets controlled and liabilities
incurred in respect of jointly controlled operations,
f) FOREIGN CURRENCY TRANSACTIONS,
BALANCES AND CASH FLOWS
(i) Foreign currency transactions, balances
and cash flows
as well as the proportional part of jointly controlled
Foreign currency transactions have been translated
assets and liabilities and of expenses incurred and
into Euros using the exchange rate prevailing at the
income earned from the sale of goods or services
transaction date. Some Spanish Group companies
by the joint venture. The consolidated statement of
which operate in US Dollars recognise purchases
changes in equity and the statement of cash flows
and sales using a standard exchange rate, in ac-
2014 Annual Report
27
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cordance with the Group policy of contracting the
ary 2008 have been classified under reserves of the
appropriate financial instruments to hedge against
investor. Consequently, the historical exchange rate
fluctuations in the US Dollar exchange rate. The dif-
applicable to the translation of foreign operations is
ferences between the standard exchange rate and
the exchange rate prevailing at the transition date.
the settlement or hedging rate are recognised as
exchange gains or losses in the income statement.
As of that date, foreign operations whose functional
currency is not the currency of a hyperinflationary
Monetary assets and liabilities denominated in for-
economy have been translated into Euros as follows:
eign currencies have been translated into Euros at
- Assets and liabilities, including goodwill and net asset adjustments derived from the acquisition of the operations are translated at
the closing rate at the reporting date;
- Income and expenses are translated
at the average exchange rate for the period; and
- All resulting exchange differences are
recognised as translation differences in
consolidated equity.
These criteria are also applicable to the
translation of the financial statements of
equity-accounted investees, with translation differences attributable to the Parent recognised in consolidated equity.
The translation into Euros described in
the preceding paragraph using the clos-
the closing rate, while non-monetary assets and li-
ing exchange rate is performed on the functional
abilities measured at historical cost have been
currency. Given the economic and financial charac-
translated at the exchange rate prevailing at the
teristics of certain companies’ activities, the function-
transaction date.
al currency is considered to be the US Dollar rather
than the official currency of the country where the
Non-monetary assets measured at fair value have
registered office is located.
been translated into Euros at the exchange rate at
the date that the fair value was determined.
The translation from local currency to functional currency implies the use of historical exchange rates for
In the consolidated statement of cash flows, foreign
the non-monetary balance sheet and income state-
currency transaction cash flows have been translat-
ment items and the exchange rate prevailing at year
ed into Euros at the exchange rates at the dates the
end for monetary items. Cash and those items that
cash flows occur.
are representative of accounts receivable and payable are considered to be monetary items.
(ii) Translation of foreign operations
In accordance with the exception relating to accumu-
When the date of the financial statements of foreign
lated translation differences foreseen in the second
operations differs from that of the Parent, the as-
transitional provision of Royal Decree 1514/2007
sets and liabilities, including goodwill and net asset
approving the Spanish General Chart of Accounts,
adjustments derived from the acquisition of the op-
translation differences recognised in the consoli-
erations, are translated at the rate prevailing at the
dated annual accounts generated prior to 1 Janu-
reporting date of the foreign operation and any nec-
28
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essary adjustments are made to balances and trans-
ties necessary to prepare the qualifying asset for its
actions with the Group in respect of exchange rate
intended use, operation or sale are complete, irre-
fluctuations up to the reporting date.
spective of whether the necessary administrative
permits have been obtained and without consider-
g) CAPITALISED BORROWING COSTS
ing interruptions.
As permitted by the second transitional provision of
Royal Decree 1514/2007 approving the Spanish Gen-
h) INTANGIBLE ASSETS
eral Chart of Accounts, the Group opted to apply this
Intangible assets are measured at cost of acquisition
accounting policy to work in progress at 1 January
or production, using the same criteria as for determin-
2008 that would not be available for use, capable of
ing the cost of production of inventories. Capitalised
operating or available for sale for more than one year.
production costs are recognised under self-construct-
Until that date, the Group opted to recognise borrow-
ed assets in the consolidated income statement.
ing costs as an expense as they were incurred.
Intangible assets are carried at cost, less any accumulated amortisation and accumulated impairment.
Borrowing costs related to specific and general financing that are directly attributable to the acquisi-
Expenditure on activities that contribute to increas-
tion, construction or production of intangible assets,
ing the value of the Group’s business as a whole,
property, plant and equipment, investment proper-
such as goodwill, trademarks and other similar items
ty, and inventories that will not be available for use,
generated internally, as well as establishment costs,
capable of operating or available for sale for more
is recognised as expenses when incurred.
than one year are included in the cost of the asset.
(i) Industrial property, patents and trademarks
To the extent that funds are borrowed specifically
Industrial property rights primarily consist of land rights
for the purpose of obtaining a qualifying asset, the
over the plot on which the Be Live Smart Talavera Hotel
amount of borrowing costs eligible for capitalisation
was built, amounting to Euros 2,505 thousand. These
is determined as the actual borrowing costs incurred.
land rights are valid for 75 years starting 16 November
Non-commercial general borrowing costs eligible for
2005 and are amortised over the remaining useful life
capitalisation are calculated as the weighted aver-
of this concession from the date on which the Group
age of the borrowing costs applicable to the Parent’s
acquired the company, that is, 70 years.
outstanding borrowings during the period, other
than those specifically for the purpose of obtaining
This heading also includes the Iberrail trademark,
a qualifying asset and the portion financed using
which was acquired from Viajes Unalia, S.A. in Octo-
consolidated equity. The borrowing costs capitalised
ber 2009 and is amortised over five years.
cannot exceed the borrowing costs incurred during that period. When determining borrowing costs
Administrative concessions include the costs in-
eligible for capitalisation, adjustments to the finance
curred in their procurement.
costs corresponding to the effective portion of hedges entered into by the Group are considered. These
(ii) Goodwill on consolidation and goodwill
calculations are determined based on the financial
Goodwill on consolidation arises from the consolida-
structure of the Group.
tion of subsidiaries and joint ventures. Goodwill is
generated on business combinations recognised in
The Group begins capitalising borrowing costs as
the individual annual accounts of the consolidated
part of the cost of a qualifying asset when it incurs
companies.
expenditures for the asset, interest is accrued, and
it undertakes activities that are necessary to prepare
Goodwill is not amortised but is tested for impair-
the asset or part of the asset for its intended use,
ment annually or more frequently where events or
operation or sale. It ceases to capitalise borrow-
circumstances indicate that an asset may be im-
ing costs when all or substantially all of the activi-
paired. Goodwill on business combinations is allo-
2014 Annual Report
29
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cated to the cash-generating units (CGUs) or groups
al Allocation Plan pursuant to Law 1/2005 of 9 March
of CGUs which are expected to benefit from the
2005, amended by Regulation (EU) No. 421/2014 of
synergies of the business combination applying the
the European Parliament and of the Council, which
criteria described in section (I) (impairment). After
among other amendments for 2013 to 2016 reduced
initial recognition, goodwill is measured at cost less
the scope of the emission allowance scheme to flights
any accumulated impairment losses.
operated within the EEA and excluded emissions from
flights operated between an aerodrome located in an
(iii) Computer software
outer region and an aerodrome located in another
Computer software acquired and produced by the
EEA region from 2013 to 2016. Thus, the number of
Company, including website costs, is recognised
free-of-charge allowances that operators should re-
when it meets the conditions for consideration as
ceive will be reduced in proportion to the reduced
development costs. Computer software maintenance
scope of the trading scheme for 2013 to 2016.
costs are charged as expenses when incurred.
The Company recognised these allowances at the
date they were assigned as greenhouse gas emis-
(iv) Emission rights
subsequent
sion allowances under intangible assets at approxi-
amendments of the Directive of the European Par-
mately Euros 6,777 thousand (Euros 3,269 thousand
liament and of the Council, which established a trad-
in 2013), in accordance with their fair market value.
ing scheme for greenhouse gas emission allowances
At the same time it recognised a non-refundable
in the European Community, measures aimed at
capital grant for this amount.
Under
Directive
2003/87/EC
and
reducing the impact of aviation on climate change
came into effect in 2012, requiring airlines to as-
After initial recognition, emission allowances are car-
sume certain costs for CO2 emissions from flights
ried at the value attributed to them upon their re-
from or to any country in the European Union.
ceipt or acquisition and are not amortised.
In February 2014 the Commission informed the
The expenses associated with greenhouse gas emis-
Company of the proposed Directive whereby in 2013
sions for the year are recognised under non-cur-
emissions from flights between EU countries and oth-
rent provisions with a balancing entry under other
er countries would be excluded from the EU emission
operating expenses in the consolidated income
allowance trading scheme (EU ETS). However, emis-
statement. Where allowances for such emissions
sions from flights operated between airports within
are available, these provisions are measured at the
the European Economic Area (EEA) in 2013 would
amount at which the allowances were granted or
be subject to the obligations of the EU ETS, including
acquired. Where allowances are not available the
flights to or from EEA outermost regions.
Group recognises the best possible estimate of the
cost to be incurred to cover the shortfall.
The proposed Directive also establishes an extraordinary compliance cycle for 2013 emissions, which
(a) Firstly, through emission allowances transferred
postpones the 2013 cycle for one year, thus it coin-
under a National Allocation Plan to the Group’s ac-
cides with the 2014 compliance cycle for emissions.
count in the National Emission Allowances Register,
Accordingly, at the end of March 2015 aircraft opera-
which are then used to cover actual emissions in
tors must report their emissions in 2013 and 2014
proportion to total forecast emissions for the entire
and surrender the equivalent number of allowances
period to which they have been allocated. The ex-
for these emissions by the end of April 2015. After
pense corresponding to this part of the obligation
this process, the annual compliance cycle will return
is determined based on the carrying amount of the
to normal for 2015 emissions.
transferred emission allowances.
The greenhouse gas emission allowances granted to
(b) Secondly, through the remaining emission allow-
the Company free of charge under the Spanish Nation-
ances recorded. Expenditure on this part of the ob-
30
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ligation is measured as the weighted average cost of
Intangible assets with indefinite useful lives are not
the emission allowances.
amortised, but are instead tested for impairment on
an annual basis or whenever there is an indication
Emission allowances acquired for the purpose of be-
that the intangible asset may be impaired.
ing sold are classified and measured based on the
standards applicable to inventories.
Intangible assets with finite useful lives are amortised by allocating the depreciable amount of an
The non-refundable grants associated with emission
asset on a systematic basis over its useful life, by ap-
allowances received free of charge are taken to prof-
plying the following criteria:
it and loss in line with the recognition of the expenses derived from the gas emissions related
to the subsidised allowances.
(v) Leaseholds
Leaseholds are rights to lease premises which
have been acquired through an onerous contract assumed by the Group.
Industrial property, patents and trademarks Concessions
Computer software
Leaseholds
AMORTISATION
METHOD
ESTIMATED YEARS
OF USEFUL LIFE
Straight-line
Straight-line
Straight-line
Straight-line
5
6
6
10
(vi) Subsequent costs
The depreciable amount of intangible assets is mea-
Subsequent costs incurred on intangible assets are
sured as the cost of the asset, less any residual value.
recognised in profit and loss, unless they increase
the expected future economic benefits attributable
The Group reviews the residual value, useful life and
to the intangible asset.
amortisation method for intangible assets at each financial year end. Changes to initially established criteria
(vii) Useful life and amortisation rates
are accounted for as a change in accounting estimates.
The Group assesses whether the useful life of each
intangible asset acquired is finite or indefinite. An in-
(viii) Impairment losses
tangible asset is regarded by the Group as having
The Group measures and determines impairment to
an indefinite useful life when there is no foreseeable
be recognised or reversed based on the criteria in
limit to the period over which the asset will generate
section (l) Impairment of non-financial assets subject
net cash inflows.
to amortisation or depreciation.
2014 Annual Report
31
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i) PROPERTY, PLANT AND EQUIPMENT
amount is the cost of an asset, less its residual value.
(i) Initial recognition
The Group determines the depreciation charge se-
Property, plant and equipment are measured at cost
parately for each component of an item of property,
of acquisition or production, using the same criteria
plant and equipment with a cost that is significant in
as for determining the cost of production of inven-
relation to the total cost of the asset and with a useful
tories. Capitalised production costs are recognised
life that differs from that of the remainder of the asset.
under self-constructed assets in the consolidated income statement. Property, plant and equipment are
Property, plant and equipment are depreciated
carried at cost less any accumulated depreciation
using the following criteria:
and impairment.
The cost of an item of property, plant and equipment includes the estimated costs of dismantling
or removal and restoration of the site on which it
is located, provided that the obligation is incurred
as a consequence of having used the item and
for purposes other than to produce inventories.
Spare parts used to replace similar parts in faci-
Buildings
Technical installations and machinery
(aircraft, engines, aircraft spare parts,
maintenance equipment and
handling equipment)
Other installations, equipment and furniture
Other property, plant and equipment
DEPRECIATION
METHOD
ESTIMATED YEARS
OF USEFUL LIFE
Straight-line
20-50
Straight-line
Straight-line
Straight-line
8-20
8-12
4-10
lities, equipment and machinery are measured
applying the aforementioned criteria. Parts with
a warehouse cycle of less than one year are recognised as inventories. Parts with a warehouse cycle
The Group reviews residual values, useful lives and
of more than one year that are related to certain
depreciation methods at each financial year end.
specific assets are recognised and depreciated on
Changes to initially established criteria are accoun-
a systematic basis consistent with the depreciation
ted for as a change in accounting estimates. Mana-
policy for the assets in question, and those not rela-
gement of the Air division determine the residual
ted to specific assets are recognised as other fixed
value of the aircraft on the basis of reports drawn up
assets and depreciated using the same process as
by independent experts.
for the part to be replaced, if this can be identified.
In general, these latter spare parts are depreciated
For property, plant and equipment subject to major
from the date they are incorporated into the asset,
repairs, on acquiring aircraft through ownership or
considering their technical obsolescence and the
under a finance lease, the Group separates the cost
weighted technical or economic useful life of the as-
of items subject to periodic review from that of the
sets in which they are to be incorporated.
aircraft itself. This cost is depreciated on a straightline basis over the period between the purchase of
Non-current investments in property held by the
the aircraft and the first inspection. The cost of the
Group under operating leases are classified as pro-
first inspection is capitalised and depreciated over
perty, plant and equipment. Investments are depre-
the period between the first inspection and the next
ciated over their useful lives, provided these are not
maintenance event.
expected to exceed the duration of the lease contract or the contract is renewed indefinitely for a pe-
(iii) Subsequent costs
riod greater than their useful lives.
Subsequent to initial recognition of the asset, only
the costs incurred which increase capacity or pro-
(ii) Depreciation
ductivity or which lengthen the useful life of the asset
Property, plant and equipment are depreciated by
are capitalised. The carrying amount of parts that are
allocating the depreciable amount of the asset on a
replaced is derecognised. Costs of day-to-day servi-
systematic basis over its useful life. The depreciable
cing are recognised in profit and loss as incurred.
32
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k) NON-CURRENT ASSETS HELD
FOR SALE AND DISCONTINUED
OPERATIONS
(i) Non-current assets held for sale
The Group recognises non-current assets
or disposal groups as held for sale if their
carrying amounts will be recovered principally through a sales transaction rather
than through continuing use. Non-current
assets or disposal groups are classified as
held for sale, provided that they are available for immediate sale in their present
condition subject to terms that are usual
and customary for sales of such assets
and that the disposal is highly probable.
(iv) Impairment
The Group measures and determines impairment to
be recognised or reversed based on the criteria in
section (l) Impairment of non-financial assets subject
to amortisation or depreciation.
Non-current assets or disposal groups classified as
held for sale are measured at the lower of the carrying amount and fair value less costs to sell and are
not depreciated.
Impairment losses on initial classification and sub-
j) INVESTMENT PROPERTIES
Investment property comprises property which is
earmarked totally or partially to earn rentals or for
capital appreciation or both, rather than for use in
the production or supply of goods or services, for
administrative purposes or for sale in the ordinary
course of business.
sequent remeasurement of assets classified as held
for sale are recognised under profit or loss from
continuing operations in the consolidated income
statement, except in the case of discontinued operations. Impairment losses on a cash-generating
unit (CGU) are allocated first to reduce the carrying
amount of goodwill and then to reduce pro rata the
Property that is being constructed or developed for
future use as investment property is classified as
property, plant and equipment under development
until construction or development is complete. Nevertheless, redevelopment work to extend or improve property is classified as investment property.
The Group measures and recognises investment
property following the policy for property, plant and
equipment.
carrying amounts of other assets in the unit. Impairment of goodwill recognised may not be reversed.
A gain on increases in the fair value less costs to sell
(either due to remeasurement of fair value or to impairment losses that occurred before classification
of the asset as held for sale) is recognised in the income statement to the extent that it reverses any
impairment of the asset.
The Group measures a non-current asset that ceases
Investment property is depreciated applying the following policies:
to be classified as held for sale or to form part of a
disposal group at the lower of the carrying amount
before the asset was classified as held for sale, adjusted for any depreciation, amortisation or impairment
Buildings
DEPRECIATION
METHOD
ESTIMATED YEARS
OF USEFUL LIFE
Lineal
33
that would have been recognised had the asset not
been classified as held for sale, and its recoverable
amount at the date of reclassification. Any required
adjustment to the carrying amount of a non-current
2014 Annual Report
33
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asset that ceases to be classified as held-for-sale is
rying amount of an asset attributable to a reversal
included in profit or loss from continuing operations.
of an impairment loss may not exceed the carrying
amount that would have been determined, net of
l) IMPAIRMENT OF NON-FINANCIAL ASSETS SUBJECT TO AMORTISATION
OR DEPRECIATION
depreciation or amortisation, had no impairment
The Group evaluates whether there are indications
A reversal of an impairment loss for a CGU is allo-
of possible impairment losses on non-financial as-
cated to the non-current assets of each unit, except
sets subject to amortisation or depreciation to
goodwill, pro rata with the carrying amounts of those
verify whether the carrying amount of these assets
assets. The carrying amount of an asset may not be
exceeds the recoverable amount. The recoverable
increased above the lower of its recoverable amount
amount is the higher of the fair value less costs to
and the carrying amount that would have been dis-
sell and the value in use.
closed, net of amortisation or depreciation, had no
loss been recognised.
impairment loss been recognised.
The Group tests goodwill and intangible assets with
indefinite useful lives for impairment at least annu-
After an impairment loss or reversal of an impair-
ally, irrespective of whether there is any indication
ment loss is recognised, the depreciation (amor-
that the assets may be impaired.
tisation) charge for the asset is adjusted in future
periods based on its new carrying amount.
Impairment losses are recognised in the consolidated income statement.
However, if the specific circumstances of the assets
indicate an irreversible loss, this is recognised di-
Recoverable amount is determined for each individ-
rectly in losses on the disposal of fixed assets in the
ual asset, unless the asset does not generate cash
consolidated income statement.
inflows that are largely independent of those from
other assets or groups of assets. If this is the case,
Valuations from independent appraisers or the cash
recoverable amount is determined for the cash-gen-
flow discounting method have been used to deter-
erating unit to which the asset belongs.
mine the recoverable amount. Discounted cash flow
calculations are based on five-year projections in the
Impairment losses for cash-generating units are allo-
budgets approved by management plus a residual
cated first to reduce the carrying amount of goodwill
value. The cash flows take into account past expe-
allocated to the unit and then to the other non-cur-
rience and represent management’s best estimate
rent assets of the unit pro rata with their carrying
of future market performance. The key assumptions
amounts. The carrying amount of each asset may
employed when determining value in use include
not be reduced below the highest of its fair value
growth rates, the weighted average cost of capital
less costs to sell, its value in use and zero.
and tax rates. The discount rate applied for the impairment test on the Group’s hotel assets and for
At the end of each reporting period the Group as-
goodwill has been 10%. In order to calculate the
sesses whether there is any indication that an im-
recoverable amount of certain hotel properties, ex-
pairment loss recognised in prior periods may no
ternal valuations by renowned appraisal companies
longer exist or may have decreased. Impairment
have been obtained
losses on goodwill are not reversible. Impairment
losses on other assets are only reversed if there has
m) LEASES
been a change in the estimates used to calculate the
(i) Lessee accounting records
recoverable amount of the asset.
Leases in which, upon inception, the Group assumes
substantially all the risks and rewards incidental to
A reversal of an impairment loss is recognised in the
ownership are classified as finance leases, otherwise
consolidated income statement. The increased car-
they are classified as operating leases.
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The Group assesses the economic substance of contracts that confer the right to
use certain assets, to identify any implicit
leases. A contract is or contains a lease if
compliance with the agreement depends
on the use of a specific asset or assets. In
these cases, at the inception of the lease
the Group separates future lease payments
and the consideration relating to the lease
from those for the rest of the items included
in the agreement, based on their fair values.
Lease payments are recognised by applying
the criteria set out in this section.
The Group has the right to use aircraft, hotels, handling equipment and travel agency offices
on a straight-line basis over the lease term, unless
through lease contracts.
another systematic basis is more representative of
the time pattern of the lease’s benefit.
Financial assets and financial liabilities under lease
contracts are subject to the same derecognition cri-
Contingent rents are recognised as an expense
teria as financial instruments.
when it is probable that they will be incurred.
- Finance leases
(ii) Sale and leaseback transactions
At the commencement of the lease term, the Group
Asset sale and leaseback transactions that meet the
recognises finance leases as assets and liabilities at
conditions for classification as a finance lease are
the lower of the fair value of the leased asset and
considered as financing operations and, therefore,
the present value of the minimum lease payments.
the type of asset is not changed and no profit or loss
Initial direct costs are added to the asset’s carrying
is recognised.
amount. Minimum lease payments are apportioned
between the finance charge and the reduction of the
n) FINANCIAL INSTRUMENTS
outstanding liability. Interest is expensed using the
(i) Classification and separation of financial instruments
effective interest method.
Financial instruments are classified on initial recognition as a financial asset, a financial liability or an
Contingent rents are recognised as an expense
equity instrument in accordance with the economic
when it is probable that they will be incurred.
substance of the contractual arrangement and the
definitions of a financial asset, a financial liability and
The accounting policies applied to the assets used
an equity instrument.
by the Group by virtue of finance lease contracts are
the same as those set out in sections (i) and (j) (Prop-
The Group classifies financial instruments into dif-
erty, plant and equipment or Investment property).
ferent categories based on the nature of the instru-
However, if there is no reasonable certainty that the
ments and its intentions on initial recognition.
Group will obtain ownership by the end of the lease
term, the assets are depreciated over the shorter of
(ii) Offsetting principles
the lease term and their useful lives.
A financial asset and a financial liability are offset
only when the Group currently has an enforceable
- Arrendamientos operativos
right to offset the recognised amounts and intends
Lease payments under an operating lease, net of
either to settle on a net basis or to realise the asset
incentives received, are recognised as an expense
and settle the liability simultaneously.
2014 Annual Report
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(iii)Financial assets and financial liabilities held
for trading
Financial assets or financial liabilities held for trad-
value, including transaction costs, and are subsequently measured at amortised cost using the effective interest method.
ing are those which are classified as held for trading
from initial recognition.
Nevertheless, financial assets which have no established interest rate, which mature or are expected
A financial asset or financial liability is classified as
to be received in the short term, and for which the
held for trading if i:
effect of discounting is immaterial, are measured at
- It originates or is acquired or incurred principally
their nominal amount.
for the purpose of selling or repurchasing it in the
near term
(v) Held-to-maturity investments
- It forms part of a portfolio of identified financial
Held-to-maturity investments are debt securities
instruments that are managed together and for
with fixed or determinable payments and fixed ma-
which there is evidence of a recent actual pattern
turity traded on an active market that the Group has
of short-term profit-taking or
the positive intention and ability to hold to maturity,
- It is a derivative, except for a derivative that is a
other than those classified in other categories. The
financial guarantee contract or a designated and
measurement criteria applicable to financial instru-
effective hedging instrument. In 2014 jet fuel de-
ments classified in this category are the same as
rivatives have been considered as financial assets
those applicable to loans and receivables.
held for trading.
The Group has not reclassified or sold any held-toFinancial assets and financial liabilities held for trad-
maturity investments during the year.
ing are initially recognised at fair value. Transaction
costs directly attributable to the acquisition or issue
are recognised as an expense when incurred.
(vi) Financial assets and financial liabilities
carried at cost
Investments in equity instruments for which the fair
After initial recognition, they are recognised at fair
value cannot be reliably measured and derivative in-
value through profit or loss. Fair value is not reduced
struments that are linked to and must be settled by
by transaction costs incurred on sale or disposal. Ac-
delivery of such unquoted equity instruments, are
crual interest and dividends are recognised sepa-
measured at cost less any accumulated impairment.
rately.
Nonetheless, if the financial assets or financial liabili-
The Group does not reclassify any financial asset or financial liability into
or out of this category while it is recognised in the consolidated balance
sheet, except when there is a change
in the classification of hedging financial instruments.
(iv) Loans and receivables
Loans and receivables comprise
trade and non-trade receivables with
fixed or determinable payments that
are not quoted in an active market
other than those classified in other
financial asset categories. These assets are initially recognised at fair
36
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ties can subsequently be reliably measured on an
them. If the dividends are clearly derived from prof-
ongoing basis, they are accounted for at fair value
its generated prior to the acquisition date because
and any gain or loss is recognised in accordance
amounts higher than the profits generated by the
with their classification.
investment since acquisition have been distributed,
the carrying amount of the investment is reduced.
(vii) Investments in non-consolidated group companies, associates and jointly controlled entities
(ix) Derecognition of financial assets
Investments in Group companies, associates and
Financial assets are derecognised when the contrac-
jointly controlled entities are initially recognised at
tual rights to the cash flows from the financial asset
cost, which is equivalent to the fair value of the con-
expire or have been transferred and the Group has
sideration given, including transaction costs in the
transferred substantially all the risks and rewards of
case of investments in associates and jointly con-
ownership.
trolled entities, and are subsequently measured at
cost net of any accumulated impairment. The cost
On derecognition of a financial asset in its entirety,
of investments in Group companies acquired be-
the difference between the carrying amount and the
fore 1 January 2010 includes any transaction costs
sum of the consideration received, net of transac-
incurred.
tion costs, including any new asset obtained less any
new liability assumed and any cumulative gain or loss
The cost of acquisition of an investment in a Group
deferred in consolidated recognised income and ex-
company, associate or jointly controlled entity in-
pense, is recorded in consolidated profit or loss.
cludes its carrying amount immediately before classification as such. Amounts previously recognised
(x) Impairment of financial assets
in equity are transferred to the income statement
A financial asset or a group of financial assets is im-
when the investment is derecognised or when an
paired and impairment losses are incurred if there is
impairment loss is recognised or reversed.
objective evidence of impairment as a result of one
or more events that occurred after the initial recog-
If an investment no longer qualifies for classification
nition of the asset and the event or events have an
under this category, it is reclassified as available-for-
impact on the estimated future cash flows of the fi-
sale and is measured as such from the reclassifica-
nancial asset or group of financial assets that can be
tion date.
reliably estimated.
Investments in equity instruments for which the fair
The Group recognises impairment of loans and re-
value cannot be reliably measured and derivative in-
ceivables and debt instruments when estimated
struments that are linked to and must be settled by
future cash flows are reduced or delayed due to
delivery of such unquoted equity instruments, are
debtor insolvency.
measured at cost less any accumulated impairment.
Nonetheless, if the financial assets or financial liabili-
For equity instruments, objective evidence of impair-
ties can subsequently be reliably measured on an
ment exists when the carrying amount of an asset
ongoing basis, they are accounted for at fair value
is uncollectible due to a significant or prolonged de-
and any gain or loss is recognised in accordance
cline in its fair value. In any case, the instrument is
with their classification.
considered to be impaired after a decline of a year
and a half or of forty percent of its quoted price,
(viii) Interest and dividends
when its value has not recovered.
Interest is recognised using the effective interest
method.
In any case, the instrument is considered to be impaired after a decline of a year and a half or of forty
Dividends from investments in equity instruments
percent of its quoted price, when its value has not
are recognised when the Group is entitled to receive
recovered.
2014 Annual Report
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Impairment of financial assets carried at amortised cost
The amount of the impairment loss of financial as-
(xi) Financial liabilities
sets carried at amortised cost is measured as the
Financial liabilities, including trade and other paya-
difference between the asset’s carrying amount and
bles, that are not classified as held for trading or as
the present value of estimated future cash flows
financial liabilities at fair value through profit or loss
(excluding future credit losses that have not been
are initially recognised at fair value less any trans-
incurred) discounted at the financial asset’s original
action costs directly attributable to the issue of the
effective interest rate. For variable income financial
financial liability. After initial recognition, liabilities
assets, the effective interest rate corresponding to
classified under this category are measured at am-
the measurement date under the contractual condi-
ortised cost using the effective interest method.
tions is used. For held-to-maturity debt instruments,
the Group uses the market value providing it is suf-
Nevertheless, financial liabilities which have no es-
ficiently reliable to be considered representative of
tablished interest rate, which mature or are expect-
the recoverable amount.
ed to be settled in the short term, and for which the
effect of discounting is immaterial, are measured at
The impairment loss is recognised in profit and loss
their nominal amount.
and may be reversed in subsequent periods if the
decrease can be objectively related to an event oc-
The Group measures financial liabilities at amortised
curring after the impairment has been recognised.
cost provided that reliable estimates of cash flows
The loss can only be reversed to the limit of the am-
can be made based on the contractual terms.
ortised cost of the assets had the impairment loss
not been recognised.
(xii) Security deposits
Security deposits paid in relation to operating lease
Investments in non-consolidated group companies,
contracts on aircraft, hotels and travel agencies are
associates and jointly controlled entities and equity
measured using the same criteria as for financial as-
instruments carried at cost
sets. The difference between the amount paid and
An asset is impaired when its carrying amount ex-
the fair value is classified as a prepayment and rec-
ceeds its recoverable amount, the latter of which is
ognised in consolidated profit or loss over the lease
understood as the higher of the asset’s value in use
term (over the period for which the service is ren-
and fair value less costs to sell.
dered). Non-current advances are restated at the
end of each reporting period based on the
market interest rate on initial recognition.
(xiii) Derecognition and modifications of
financial liabilities
The Group derecognises all or part of a financial liability when it either discharges the liability by paying the creditor, or is legally released
from primary responsibility for the liability either by process of law or by the creditor.
o) HEDGE ACCOUNTING
Derivative financial instruments which qualify
for hedge accounting are initially measured at
fair value, plus any transaction costs that are
directly attributable to the acquisition, or less
any transaction costs directly attributable to
the issue of the financial instruments. None-
38
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theless, transaction costs are subsequently recog-
strument that is determined to be an effective hedge
nised in profit and loss providing they do not change
in consolidated recognised income and expense.
the effectiveness of the hedge.
The ineffective portion and the specific component
of the gain or loss or cash flows on the hedging in-
The Group undertakes foreign currency (US Dollar)
strument, excluding the measurement of the hedge
cash flow hedges and interest rate hedges.
effectiveness, are recognised under change in fair
value of financial instruments.
At the inception of the hedge the Group formally
designates and documents the hedging relation-
The separate component of consolidated equity
ships and the objective and strategy for undertak-
associated with the hedged item is adjusted to the
ing the hedges. Hedge accounting is only applicable
lesser of the cumulative gain or loss on the hedg-
when the hedge is expected to be highly effective
ing instrument from inception of the hedge and the
at the inception of the hedge and in subsequent
cumulative change in fair value or present value of
years in achieving offsetting changes in fair value or
the expected future cash flows on the hedged item
cash flows attributable to the hedged risk, through-
from inception of the hedge. However, if the Group
out the period for which the hedge was designated
expects that all or a portion of a loss recognised in
(prospective analysis), and the actual effectiveness is
consolidated equity will not be recovered in one or
within a range of 80%-125% (retrospective analysis)
more future periods, it reclassifies the amount that
and can be reliably measured.
is not expected to be recovered to change in fair
value of financial instruments.
For cash flow hedges of forecast transactions, the
Group assesses whether these transactions are highly
If a hedge of a forecast transaction subsequently re-
probable and if they present an exposure to variations
sults in the recognition of a financial asset or a finan-
in cash flows that could ultimately affect profit or loss.
cial liability, the associated gains or losses that were
recognised in consolidated equity are reclassified
The Group only designates as hedged items assets, li-
from equity to profit or loss in the same period or
abilities, firm commitments and forecast transactions
periods during which the asset acquired or liability
that involve a non- Group party. Nevertheless, the for-
assumed affects profit or loss and under the same
eign currency risk of a consolidated foreign operation
caption of the consolidated income statement.
monetary item qualifies as a hedged item in the consolidated annual accounts if it results in an exposure
If a hedge of a forecast transaction subsequently re-
to foreign exchange rate gains or losses that are not
sults in the recognition of a non-financial asset or a
fully eliminated on consolidation. The foreign curren-
non-financial liability, the Group reclassifies the as-
cy risk of a highly probable forecast transaction of a
sociated gains and losses that were recognised in
consolidated foreign operation qualifies as a hedged
consolidated equity and includes them in the initial
item in the consolidated annual accounts provided
cost or carrying amount of the non-financial asset
that the transaction is denominated in a currency
or liability.
other than the functional currency of the entity entering into that transaction and the foreign currency risk
The Group prospectively discontinues hedge ac-
will affect the consolidated income statement. As a re-
counting if the foreseen circumstances affecting fair
sult, amounts from the hedging operation deferred in
value hedges arise. In these cases, the cumulative
recognised income and expense are taken to profit or
gain or loss on the hedging instrument that has been
loss when the transaction is carried out with parties
recognised in consolidated equity remains separate-
external to the Group.
ly in equity until the forecast transaction occurs. If
the transaction is no longer expected to occur, the
(i) Cash flow hedges
cumulative gain or loss that had been recognised in
The Group recognises the portion of the gain or loss
consolidated equity is reclassified to profit or loss as
on the measurement at fair value of a hedging in-
a change in the fair value of financial instruments.
2014 Annual Report
39
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p) INVENTORIES
r) DEFINED BENEFIT PLANS
Inventories are initially measured at cost of purchase
In accordance with prevailing Spanish employment
or production.
regulations applicable to travel agencies, tour operators and ground transport companies, employ-
The consolidated companies measure their invento-
ees are entitled to retirement bonuses based on
ries using the last invoice price, which does not differ
years of service and retirement age. Management of
significantly from the cost calculated on a FIFO basis.
these retirement bonus commitments has been out-
The valuation of slow-moving inventories has been
sourced to non-Group companies. This outsourcing
lowered to their estimated probable realisable value.
is based on an actuarial study of these commitments
applying the Projected Unit Credit method using
When the cost of inventories exceeds net realisable
PERM00 mortality tables, a capitalisation rate of 2%
value, materials are written down to net realisable
and an annual salary increase of 0%.
value.
Certain collective bargaining agreements applicable
to Group companies with activities other than those
mentioned in the preceding paragraph basically establish that permanent personnel retiring between
the age of 60 and 65 are entitled to a long-service
bonus equivalent to a certain number of monthly payments depending on the number of years
worked. All length-of-service bonuses have been externalised to non-Group companies.
s) PROVISIONS
(i) General criteria
Provisions are recognised when the Group has a
present obligation (legal, contractual, constructive or
tacit) as a result of a past event; it is probable that
an outflow of resources embodying economic benefits will be required to settle the obligation; and a
reliable estimate can be made of the amount of the
obligation.
The amount recognised as a provision is the best
estimate of the expenditure required to settle the
present obligation at the end of the reporting period,
taking into account all risks and uncertainties surrounding the amount to be recognised as a provi-
q) CASH AND CASH EQUIVALENTS
sion and, where the time value of money is material,
the financial effect of discounting provided that the
Cash and cash equivalents include cash on hand and
expenditure to be made each period can be reliably
demand deposits in financial institutions. They also
estimated. The discount rate is a pre-tax rate that re-
include other short-term, highly liquid investments
flects the time value of money and the specific risks
that are readily convertible to known amounts of
for which future cash flows associated with the provi-
cash and which are subject to an insignificant risk of
sion have not been adjusted at each reporting date.
changes in value. An investment normally qualifies
as a cash equivalent when it has a maturity of less
Single obligations are measured using the individual
than three months from the date of acquisition.
most likely outcome. When the provision involves
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a large population of identical items, the
obligation is estimated by weighting all
possible outcomes by their associated
probabilities. Where there is a continuous range of possible outcomes, and each
point in that range is as likely as any other,
the mid-point of the range is used.
The financial effect of provisions is recognised as a finance cost in the consolidated
income statement.
The tax effect and gains on the expected
disposal of assets are not taken into account in measuring a provision.
Reimbursements from third parties of
the expenditure required to settle a provision are recognised as a separate asset
provided that it is virtually certain that the
reimbursement will be received. The reimbursement is recognised as income in the
consolidated income statement based on the nature
of the expenditure up to the amount of the provision.
(iii) Provisions for termination benefits and
restructuring costs
Termination benefits are recognised as a liability when
the Group has a detailed formal plan for the termina-
Where a risk is externalised to a third party by means
tion and there is a valid expectation among the affected
of a legal or contractual agreement, provision is only
employees that termination will arise either because
made for the part of the risk assumed by the Group.
the plan has already started to be implemented or be-
If it is not probable that an outflow of resources will
cause its main characteristics have been published.
be required to settle an obligation, the provision is
reversed.
Restructuring provisions are recognised as a liability
when the Group has a detailed formal plan for the ter-
(ii) Provisions for customer loyalty programmes
mination and there is a valid expectation among the
Air Europa Líneas Aéreas, S.A.U. has externalised its
employees that termination will arise either because
main customer loyalty programme, “Flying Blue”, and
the plan has already started to be implemented or
recognises the cost of this programme on a monthly
because its main characteristics have been published.
basis when the supplier informs it of the amount
accrued over the period. Air Europa Líneas Aéreas,
On 21 February 2014 Viajes Halcón, S.A.U. signed a
S.A.U. recognises a provision for its other custom-
collective redundancy programme that affected 131
er loyalty programmes based on the cost of the li-
employees and led to the closure of points of sale
abilities accrued at the reporting date. This balance,
located in Alcampo hypermarkets throughout Spain.
amounting to Euros 909 thousand (Euros 646 thou-
At 31 October 2014, the Travel Agency division has
sand for 2013), is recognised under current provi-
recognised the cost of termination benefits for em-
sions (see note 24).
ployees affected by the programme.
Air Europa Líneas Aéreas, S.A.U. recognises the
On 23 October 2013, Viajes Halcón, S.A.U. and Viajes
transport revenue when points from any of its pro-
Ecuador, S.A.U. signed respective collective redun-
grammes are redeemed on an Air Europa flight.
dancy programmes affecting a total of 367 employees
2014 Annual Report
41
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agencies. At 31 October 2013, the Travel Agency divi-
t) REVENUE FROM THE SALE OF GOODS
AND RENDERING OF SERVICES
sion recognised the cost of termination benefits for
Revenue from the sale of goods or services is meas-
employees affected by the programme and the unre-
ured at the fair value of the consideration received
coverable net carrying amount of the installations in
or receivable. Volume rebates, prompt payment and
office premises to be closed.
any other discounts, as well as the interest added to
as well as the closure or optimisation of 120 travel
the nominal amount of the consideration, are recogOn the matter of employee transfers, under the
nised as a reduction in the consideration.
collective bargaining agreement governing airport
ground handling services, on expiry of a concession
Revenues associated with the rendering of services are
the new concession holder for the service must as-
recognised in the income statement by reference to
sume the position of employer of all personnel who
the stage of completion at the reporting date when rev-
exercise their rights and voluntarily choose to be
enues, the stage of completion, the costs incurred and
transferred to the new operator. In the unlikely event
the costs to complete the transaction can be estimated
that employees voluntarily decide not to be trans-
reliably and it is probable that the economic benefits
ferred to the new operator, the transferring opera-
derived from the transaction will flow to the Group.
tor, in this case entities forming part of the Handling
division, will be obliged to indemnify them with an
Following usual sector practice, Air Europa Líneas
amount equivalent to 21 days’ pay for each year of
Aéreas, S.A.U. prepares an estimate of tickets sold
service up to a maximum of 12 months’ salary. The
and not used and that will not be used in the future.
directors of the Parent do not expect any significant
This estimate is drawn up on the basis of historical
liabilities to arise in connection with these indemnity
statistical information on this aspect.
payments given the favourable terms and conditions
governing transfers set forth in the aforementioned
Air Europa Líneas Aéreas, S.A.U. recognises revenues
collective bargaining agreement. Consequently, no
from air transport services rendered when the pas-
provision has been recognised in the consolidated
senger has actually flown. The amount received from
annual accounts.
tickets sold for future flights is recognised under current accruals on the accompanying consolidated bal-
(iv) Provisions for major repairs on aircraft under
operating lease contracts
ance sheet. Current accruals reflect the estimated
liability associated with tickets sold prior to 31 Octo-
In accordance with the aircraft operating lease con-
ber of each year and not yet used at that date. The
tracts, the Group recognises a provision for the to-
revenues from these tickets, as well as the estimate
tal cost to be incurred for scheduled inspections of
of the tickets sold that will not be used, are recog-
aircraft (general inspections of aircraft, engines and
nised on the dates for which the flights are booked.
components), expensing these costs on a straightline basis over the period that elapses between
Viajes Halcón, S.A.U., Viajes Ecuador, S.A.U., Viajes Tu
two successive inspections. Under some of the
Billete, S.L.U. and Halcón Viagens e Turismo, Lda. pro-
contracts between Air Europa Líneas Aéreas, S.A.U.
vide travel agency services. Since these companies bill
and the aircraft lessors, most of the inspection
customers, transactions are presented at their sales
costs are paid to the lessor in regular instalments.
amount and cost of supplies when the travel docu-
Air Europa then settles the cost of these periodic
ments or documents for other services to be pro-
inspections through the lessor’s reimbursement of
vided are delivered to the customer, which is when
the amounts that were previously advanced. The
the accrual of income and cost of supplies is deemed
monthly amounts paid to the lessors as advances
to take place, irrespective of when the customer is to
on account are recognised as other financial assets
travel or when the contracted services are to be used.
under either non-current investments or current
investments, depending on the period in which
Globalia Travel Club Spain, S.A.U., Globalia Business
they are offset.
Travel, S.A.U. and Iberotours, S.A.U. recognise in-
42
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Government assistance provided in the
form of deductions and other tax relief
applicable to income tax payable and
considered as government grants is
recognised in accordance with the prevailing regulations.
The Parent files consolidated tax returns with other companies belonging
to the Globalia business group. This
tax group is headed by Globalia Corporación Empresarial, S.A., as Parent,
and includes the following subsidiaries:
Air Europa Líneas Aéreas, S.A.U.; Viajes
Halcón, S.A.U.; Globalia Business Travel, S.A.U.; Globalia Formación, S.L.U.;
come and expenses on an accruals basis. As these
Globalia Mantenimiento Aeronáutico, S.L.U.; Globalia
companies contract tourism services as tour opera-
Autocares, S.A.; Globalia Broker Services, S.A.U.; Glo-
tors, sales and cost of supplies are recognised when
balia Activos Inmobiliarios, S.A.U.; Globalia Sistemas
services are rendered to end customers.
y Comunicaciones, S.L.U.; Globalia Hotel Orotava,
S.L.U.; Iberhandling, S.A.; Globalia Call Center, S.A.U.;
Be Live Hotels, S.L.U., Inversiones Costa Adeje,
Be Live Hotels, S.L.U.; Globalia Handling, S.A.U.; Glo-
S.L.U., Explotadora Hotelera Luabay, S.L.U., Smart
balia Artes Gráficas, S.L.; Globalia Hotel Talavera,
Inversiones S.A.S., Inversiones La Albufera, S.A.S. and
S.A.U.; Globalia Hotel Palace de Muro, S.A.U.; ; Media
Intertravel, S.A.R.L. operate hotel complexes. These
& Design, S.A.U.; Viajes Unalia, S.A.U.; Groundforce
companies recognise revenue from their activity in
Cargo, S.L.U.; Globalia Servicios Corporativos, S.L.U.;
line with their customers’ overnight stays.
Viajes Ecuador, S.A.U.; Globalia Gestión Seguros,
S.L.U.; Welcome Incoming Services, S.L.U.; Pepe-
Transactions between consolidated companies have
chofer, S.L.U.; Globalia Travel Club Spain, S.L.U.; Glo-
been eliminated from the consolidation process as
balia Hotel La Niña, S.L.; Synergy Glb Comex, S.L.U.;
explained in section a) of this note.
Viajes Tu Billete, S.L.; Globalia Trading Services, S.L.U.;
u) INCOME TAX
Iberotours, S.A.U.; León Activos Aeronáuticos, S.L.U.
and Sunion Proyectos y Construcción, S.L.U.
The income tax expense or tax income for the year
comprises current tax and deferred tax.
(i) Taxable temporary differences
Taxable temporary differences are recognised in all
Current tax assets or liabilities are measured at the
cases except where:
amount expected to be paid to or recovered from
-They arise from the initial recognition of goodwill
the taxation authorities, using the tax rates and tax
or an asset or liability in a transaction that is not
laws that have been enacted or substantially enact-
a business combination and, at the time of the
ed at the reporting date.
transaction, affects neither accounting profit nor
taxable income;
Current and deferred tax are recognised as income
-They are related to investments or subsidiar-
or an expense and included in profit or loss for the
ies, associates and jointly controlled entities over
year, except to the extent that the tax arises from
which the Group is able to control the timing of
a transaction or event which is recognised, in the
the reversal of the temporary difference and it is
same or a different year, directly in consolidated eq-
not probable that the difference will reverse in the
uity, or from a business combination.
foreseeable future.
2014 Annual Report
43
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(iii) Measurement
Deferred tax assets and liabilities are measured at the tax rates that are expected to
apply to the years when the asset is realised or the liability is settled, based on tax
rates and tax laws that have been enacted
or substantially enacted. The tax consequences that would follow from the manner in which the Group expects to recover
or settle the carrying amount of its assets or
liabilities are also reflected in the measurement of deferred tax assets and liabilities.
(iv) Offset and classification
The Group only offsets current tax assets
(ii) Deductible temporary differences
and liabilities if it has a legally enforceable
Deductible temporary differences are recognised
right to offset the recognised amounts and intends
provided that:
either to settle on a net basis or to realise the assets
- It is probable that sufficient taxable income will be
and settle the liabilities simultaneously.
available against which the deductible temporary
difference can be utilised, unless the differences
Deferred tax assets and liabilities are recognised in
arise from the initial recognition of an asset or li-
the consolidated balance sheet under non-current
ability in a transaction that is not a business com-
assets or liabilities, irrespective of the expected date
bination and, at the time of the transaction, affects
of recovery or settlement.
neither accounting profit nor taxable income.
controlled entities that will reverse in the foresee-
v) CLASSIFICATION OF ASSETS
AND LIABILITIES AS CURRENT
AND NON-CURRENT
able future and sufficient taxable income is expect-
The Group classifies assets and liabilities in the consol-
ed to be generated against which the temporary
idated balance sheet as current and non-current. Cur-
differences can be offset.
rent assets and liabilities are determined as follows:
- The temporary differences are associated with investments in subsidiaries, associates and jointly
- Assets are classified as current when they are
Tax planning opportunities are only considered on
expected to be realised or are intended for sale
evaluation of the recoverability of deferred tax as-
or consumption in the Group’s normal operating
sets and if the Group intends to use these opportu-
cycle, they are held primarily for the purpose of
nities or it is probable that they will be utilised.
trading, they are expected to be realised within
twelve months of the reporting date or are cash
However, unused tax losses exceeding taxable tem-
or a cash equivalent, unless the assets may not be
porary differences reversed are only recognised
exchanged or used to settle a liability for at least
when the following conditions are met:
twelve months from the reporting date.
- The tax losses have arisen as a result of an unusual
event in Group management.
- Liabilities are classified as current when they are
expected to be settled in the Group’s normal op-
-It is reasonably considered that the causes origi-
erating cycle, they are held primarily for the pur-
nating the tax losses no longer exist and that tax
pose of trading, they are due to be settled within
benefits will be obtained which permit them to be
twelve months of the reporting date or the Group
offset within a period which does not exceed that
does not have an unconditional right to defer set-
established by tax legislation, up to a maximum
tlement of the liability for at least twelve months
limit of ten years from year end
after the reporting period.
44
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- Financial liabilities are classified as current when
they are due to be settled within twelve months
assets acquired was Euros 2,185 thousand, thus no
goodwill was generated in the transaction.
after the reporting date, even if the original term
was for a period longer than twelve months, and
At 31 October 2013, the Parent acquired 100% of
an agreement to refinance or to reschedule pay-
Canoa Spain, S.L.U. for Euros 44,428 thousand. This
ments on a long-term basis is completed after the
company is the owner of Hotel Canoa, S.A., a compa-
reporting date and before the annual accounts are
ny domiciled in the Dominican Republic, which owns
authorised for issue.
the four-star Be Live Canoa Hotel. The fair value of
the previous investment in the acquiree was Euros
w) ENVIRONMENTAL ISSUES
21,339 thousand and the fair value of the net assets
The Group takes measures to prevent, reduce or re-
acquired was Euros 23,089 thousand, thus no good-
pair the damage caused to the environment by its
will was generated in the transaction.
activities.
On 31 October 2013 f Viajes Halcón, S.A.U. acquired
Expenses derived from environmental activities are
16.67% of Mundosenior IV UTE, Euroseniors UTE,
recognised as other operating expenses in the pe-
Mundosenior III UTE, Mundosocial, AIE, and Ocio y Tu-
riod in which they are incurred.
rismo Novotours, AIE, in which it already held a 33.33%
interest for Euros 4,668 thousand. The fair value of the
See note 30 for further details on these activities.
previous investment in the acquiree was Euros 466
thousand and the fair value of the net assets acquired
x) TRANSACTIONS BETWEEN NON-CONSOLIDATED GROUP COMPANIES
was zero, thus goodwill of Euros 4,202 thousand was
Transactions between non-consolidated Group
carried out on 31 October 2013, no profit or loss was
companies, except those related to mergers, spin-
contributed to the Group in that year.
generated in the transaction. As the acquisition was
offs and non-monetary contributions, are recognised at the fair value of the consideration given or
received. The difference between this value and the
amount agreed is recognised in line with the underlying economic substance of the transaction.
5) BUSINESS COMBINATIONS
During 2014 no new business combinations have
6) JOINT VENTURES
Information on joint ventures in the form of jointly
controlled entities is presented in Appendix IV.
Information on joint ventures in the form of temporary joint ventures is presented in Appendix V.
occurred.
a) FOREIGN CURRENCY
The following business combinations were under-
currency of the countries in which such operations
taken in 2013
On 19 December 2012 the Group company Techite
Inversiones 2012, S.L.U. acquired Luabay Hoteles y
Apartamentos, S.L., which wholly owns Inversiones
Costa Adeje, S.A.U. and Hotelera Luabay, S.L.U., from
The functional currency of foreign operations is the
are domiciled.
7) NON-CURRENT ASSETS HELD
FOR SALE
sand. All of the aforementioned company’s invest-
a) ASSETS AND LIABILITIES HELD FOR
SALE
ments and receivables have been acquired. The fair
At 31 October 2013 the Group classified advances
value of the previous investment in the acquiree was
paid to Boeing through Pony Express Trust for deliv-
Euros 8,509 thousand and the fair value of the net
ery of a 737-800 aircraft under this heading. This air-
Orizonia Travel Group, S.L.U. for Euros 10,694 thou-
2014 Annual Report
45
back to index
craft was received in January 2014 and subsequently
sold to a non-group third party for more than the
recognised carrying amount.
Details of assets and liabilities held for sale are as
follows:
THOUSANDS OF EUROS
20142013
Assets held for sale:
Advances Boeing 737-800
-
11,058
Total assets
-
11,058
Bank debt to finance advances B 737-800
-
(6,576)
Total liabilities
-
(6,576)
Liabilities directly associated with
non-current assets held for sale:
In 2013 non-current assets held for sale include capitalised interest amounting to Euros 667 thousand.
8) INTANGIBLE ASSETS
Details of intangible assets, excluding goodwill and goodwill on consolidation, and movement are as follows:
THOUSANDS OF EUROS
2014
CONCESSIONS
PATENTS, LICENCES, TRADEMARKS AND SIMILAR RIGHTS
COMPUTER
SOFTWARE
EMISSION
ALLOWANCES
OTHER INTANGIBLE
ASSETS
TOTAL
2,855
3,233
89,143
3,566
4,073
102,870
Additions
44
40
11,467
3,508
3,013
18,072
Disposals
-
(2)
(21,311)
-
(883)
(22,196)
Transfers
-
-
1,667
(297)
(1,370)
-
2,899
3,271
80,966
6,777
4,833
98,746
(349)
(2,218)
(54,649)
-
(1,554)
(58,770)
Cost at 1 November 2013
Cost at 31 October 2014
Accumulated amortisation
at 1 November 2013
(37)
(540)
(10,929)
-
(30)
(11,536)
Disposals
-
-
16,338
-
50
16,388
Transfers
-
-
(1,003)
-
-
(1,003)
Amortisations
Accumulated
at 31 October 2014
Carrying amount at 31 October 2014
46
amortisation
(386)
2,513
(2,758)
513
(50,242)
-
30,7246,777
(1,534)
(54,920)
3,299 43,826
back to index
THOUSANDS OF EUROS
CONCESSIONS
PATENTS, LICENCES, TRADEMARKS AND SIMILAR RIGHTS
COMPUTER
SOFTWARE
2,855
3,211
79,661
Additions
-
22
11,047
3,566
770
15,405
Disposals
-
-
(1,565)
(4,805)
(123)
(6,493)
2,855
3,233
89,143
3,566
4,073
102,870
-
(1,964)
(45,812)
-
(1,517)
(49,293)
2013
EMISSION
ALLOWANCES
OTHER INTANGIBLE
ASSETS
4,805
3,426
TOTAL
93,958
at 1 November 2012
(37)
(566)
(10,111)
-
(37)
(10,751)
Disposals
-
-
1,274
-
-
1,274
Transfers
(312)
312
-
-
-
-
(349)
(2,218)
(54,649)
-
(1,554)
(58,770)
1,014
34,4943,566 2,51944,099
Amortisations
at 31 October 2013
Carrying amount at
31 October 2013
2,506
a) EMISSION ALLOWANCES
The main additions for 2014 comprise:
Movement in the number of allowances is as follows:
Emission allowances: Amount paid to public entities and charged to the provision for
THOUSANDS OF EUROS
emission allowances.
DESCRIPTION
Computer software: Additions in 2014 amount
to Euros 11,467 thousand and essentially reflect IT development for online business and
business development for the various Group
divisions.
The main disposals in 2014 reflect IT programmes that have been substituted by
FREE OF CHARGE
PURCHASED
TOTAL
Balances at 1 November 2012
640,313
-
640,313
Additions
608,297
105,794
714,091
Allowances derecognised
(599,504)
(105,794)
(705,298)
Balance at 31 October 2013
649,106
Additions
Balance at 31 October 2014
591,058
1,240,164
-649,106
-
591,058
-1,240,164
those developed in recent years.
The main additions for 2013 comprised:
Emission allowances: Amount paid to public entities
and charged to the provision for emission allowances.
Computer software: Additions in 2013 amounted to
Euros 11,047 thousand and essentially reflect IT development for online activity and for the business in
the various Group divisions.
Disposals in 2013 mainly reflect the usage of emission rights from the previous year.
2014 Annual Report
47
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a cumulative balance of Euros 6,777 thousand and
Euros 7,555 thousand, respectively.
b) FULLY AMORTISED ASSETS
The cost of fully amortised intangible assets in use at
31 December is as follows:
THOUSANDS OF EUROS
In 2014, the Company has recognised 591,058 emission allowances received free of charge, equivalent
to Euros 3,508 thousand (608,297 emission allowances equivalent to Euros 2,962 thousand in 2013).
20142013
Patents and trademarks
2,314
2,390
22,768
24,016
217
-
1,356
-
Computer software
Administrative concessions
Other intangible assets
26,65526,406
At year end 1,240,164 emission allowances had not
been surrendered because the calendar for surrendering 2013 emission allowances has been postponed until 30 April 2015.
According to the notification dated 21 December
2011 received by the Company from the Spanish
9) GOODWILL, GOODWILL OF
CONSOLIDATED COMPANIES
AND IMPAIRMENT
Details of goodwill and movement are as follows:
Ministry for the Environment and Rural and Marine
Affairs, the Company was allocated 1,297,611 greenhouse gas emission allowances free of charge for
the trading year 2012 and will be awarded 1,226,003
THOUSANDS OF EUROS
16,722
12,520
Additions
18
4,202
Disposals (2,189)
-
Environment and relating to the European Commis-
Cost at 31 October
14,551
16,722
sion’s proposal to temporarily derogate from article
Accumulated impairment at 1 November (3,464)
(3,464)
allowances for each year from 2013 to 2020. According to the notification dated 8 January 2013 issued
by the Spanish Ministry for Agriculture, Food and the
16 of the EU ETS Directive with respect to certain
types of flights, 640,313 of the Company’s allowanc-
Accumulated impairment at 31 October
(3,464)
(3,464)
es for 2012 would not be affected by this derogation.
Carrying amount at 31 October 11,087
13,258
In 2014 the expenses recognised in relation to
greenhouse gases totalled Euros 4,506 thousand
(Euros 3,049 thousand in 2013). These expenses
have been recognised under the provision for emission allowances (see note 24).
Given that in 2014 the emission allowances have
Details of the goodwill of consolidated companies
and movement are as follows:
THOUSANDS OF EUROS
20142013
Cost at 1 November
20,938
21,012
Disposals
(5,401)
(74)
ing 2013 that are recognised on the accompanying
Cost at 31 October 15,537
20,938
consolidated balance sheet under intangible assets
Accumulated impairment at 31 October 15,537
20,938
not been settled, at the date of preparing these consolidated annual accounts, the rights received dur-
as greenhouse gas emission allowances and under
non-current provisions as other provisions present
48
Carrying amount at 31 October
back to index
A summary of the allocation of goodwill is as follows:
the handling company in Morocco, Morocco GHS.
Additions to goodwill in 2013 reflect the goodwill
THOUSANDS OF EUROS
generated on the acquisition of 16% of the entities
20142013
CGUCGU
forming part of the Mundosocial business.
Groundforce CGU
8,410
8,410
The Group tests goodwill for impairment on an
Mundosocial CGU
8,617
8,617
annual basis. The calculation of the recoverable
Viajes Ecuador CGU
4,069
4,069
amount of a division to which goodwill has been allo-
MK Tours CGU
2,845
8,190
cated requires the use of estimates by management.
Tu Billete CGU
833
833
The recoverable amount is the higher of fair value
-
2,170
less costs to sell and value in use. The Group gener-
1,850
1,907
ally uses cash flow discounting methods to calculate
Estival Tours CGU
Other CGUs
these values. Discounted cash flow calculations are
26,62434,196
based on five-year projections in the budgets approved by management. The cash flows take into
The goodwill derecognised in the year related to Esti-
account past experience and represent manage-
val Tours. The amounts derecognised from goodwill
ment’s best estimate of future market performance.
of consolidated companies reflect the irrecoverable
The key assumptions used to determine fair value in
portion of the goodwill of the MK Tours group and
2015 are as follows:
THOUSANDS OF EUROS
Results from operating activities (thousand os Euros)
CGU
GROUNDFORCE
MUNDO SOCIAL
CGU
VIAJES ECUADOR
CGU
MK TOURS
CGU
VIAJES TU BILLETE
CGU
3,303
7,319 1,017
186
498
Average growth rate of sales (%) during
the projected period
Discount rate (%)
Terminal growth rate (%)
2
1
1
14
2
10
10
10
10
10
1
1
1
1
1
The Groundforce and Mundosocial CGUs have re-
United States, it has positive forecasts for the com-
ported stable earnings in recent years and have met
ing years.
profit forecasts for 2014.
After failing to achieve budgeted results in 2014 for
After the restructuring in 2013, Viajes Ecuador, S.A.U.
the first time since its acquisition, Viajes Tu Billete is
has started to generate profits in line with projec-
changing its business structure and at the date of
tions for 2014.
preparing these annual accounts was on target to
meet the 2015 budget.
The goodwill of the CGU, MK Tours, presents significant impairment as it has failed to meet forecasts
For the remaining CGUs management applies pru-
for 2014. Nevertheless as this group is located
dent assumptions, as well as the same discount
in Miami and specialises in the Cuban market in
rates and terminal growth rate as for the aforemen-
Florida, given the current situation with the lifting
tioned CGUs, and none present any indications of
of commercial restrictions between Cuba and the
goodwill impairment.
2014 Annual Report
49
back to index
10) PROPERTY, PLANT AND EQUIPMENT
Details of property, plant and equipment and movement are as follows:
THOUSANDS OF EUROS
LAND
BUILDINGS
TECHNICAL INSTALLATIONS AND
MACHINERY
56,613
240,997
425,306
Additions
18
5,644
7,604
2,012
13,169
7,529
35,976
Disposals
-
(82)
(13,908)
(3,082)
(30)
(795)
(17,897)
Transfers
1,862
(1,862)
1,225
1,995
(7,855)
213
(4,422)
835
3,131
16,461
839
-
486
21,752
59,328
247,828
436,688
58,332
24,011
at 1 November 2013
-
(61,210)
(192,185)
(44,009)
-
(17,990)
(315,394)
Depreciation
-
(7,682)
(29,143)
(3,199)
-
(1,925)
(41,949)
Disposals
-
17
6,984
1,463
-
693
9,157
Transfers
-
432
(268)
(871)
-
(189)
(896)
Translation differences
-
(1,065)
(3,145)
(569)
-
119
(4,660)
-
(69,508)
(217,757)
(47,185)
-
(19,292)
(353,742)
at 1 November 2013
-
-
(2,112)
-
-
-
(2,112)
Impairment losses
-
-
(495)
-
-
-
(495)
-
-
(2,607)
-
-
-
(2,607)
59,328
178,320
216,324
11,147
24,011
15,203
504,333
2014
OTHER INSTALLATIONS, EQUIPMENT
AND FURNITURE
UNDER CONSTRUCTION AND
ADVANCES
OTHER PROPERTY, PLANT AND
EQUIPMENT
TOTAL
56,568
18,727
27,062
825,273
34,495860,682
Accumulated depreciation
at 31 October 2014
Accumulated impairment
at 31 October 2014
Carrying amount
at 31 October 2014
50
back to index
THOUSANDS OF EUROS
OTHER INSTALLATIONS, EQUIPMENT
AND FURNITURE
UNDER CONSTRUCTION AND
ADVANCES
OTHER PROPERTY,
PLANT AND
EQUIPMENT
TOTAL
2013
LAND
BUILDINGS
TECHNICAL INSTALLATIONS AND
MACHINERY
46,474
193,869
264,358
45,407
29,905
26,763
606,776
54
5,086
12,796
5,243
2,700
3,555
29,434
Additions
Business combinations
Disposals
10,638
43,649
4,342
7,702
-
-
66,331
(530)
(1,113)
(20,140)
(1,784)
(13,867)
(2,916)
(40,350)
-
241
167,890
-
(11)
(340)
167,780
(23)
(735)
(3,940)
-
-
-
(4,698)
56,613
240,997
425,306
56,568
18,727
27,062
825,273
-
(41,185)
(158,460)
(35,020)
-
(16,836)
(251,501)
Transfers
at 1 November 2012
Depreciation
-
(8,659)
(30,581)
(3,881)
-
(3,466)
(46,587)
Disposals
-
40
20,061
1,044
-
2,579
23,724
Business combinations
-
(14,106)
(2,444)
(6,152)
-
(267)
(22,969)
Transfers
-
-
(22,992)
-
-
-
(22,992)
-
2,700
2,231
-
-
-
4,931
-
(61,210)
(192,185)
(44,009)
-
(17,990)
(315,394)
at 31 October 2013
at 1 November 2012
-
-
(1,974)
-
-
-
(1,974)
Impairment losses
-
-
(211)
-
-
-
(211)
Disposals of companies -
-
73
-
-
-
(73)
-
-
(2,112)
-
-
(2,112)
56,613
179,787
231,009
12,559
18,727
9,072
507,767
at 31 October 2013
Carrying amount
at 31 October 2013
a) GENERAL
The main disposals in 2014 are basically the fo-
llowing:
Improvements to Hotel Be Live Canoa (the Domi-
Investment in installations of the Hotel Esmeralda due
nican Republic) that have significantly increased its
to the termination of the lease contract with the com-
accommodation capacity.
pany that owns it, which is in insolvency proceedings.
Inversiones Costa Adeje, S.A. has received compensa-
Aircraft components for the fleet operated by Air Eu-
tion of Euros 8,000 thousand as a result of this event.
ropa Líneas Aéreas, S.A.U., recognised under technical installations and machinery.
Installations in the travel agency division’s offices as
a result of the termination of the operating contract
Additionally, as a result of the agreement entered into
of agencies in Alcampo hypermarkets.
in September 2013 for the purchase of new aircraft
(see (f) of this note), Air Europa Líneas Aéreas, S.A.U. has
Aircraft components.
made additional payments during 2014 of USD 16,478
thousand (equivalent to Euros 12,823 thousand).
2014 Annual Report
51
back to index
Improvements to the Be Live
Punta Cana Grand Hotel.
Aircraft components for the
fleet operated by Air Europa Líneas Aéreas, S.A.U.
Improvements to central office
and travel agency premises.
Business combinations reflect
the acquisition of the Be Live
Canoa Hotel and to capital appreciation on hotel properties
operated under the Luabay
brand (see note 5).
c) FULLY DEPRECIATED ASSETS
Details of the cost of fully depreciated property, plant
Transfers reflect the change in the status of the sale
and equipment in use at 31 October are as follows:
of the Embraer 195 aircraft, which in 2012 were recognised as non-current assets held for sale (see
THOUSANDS OF EUROS
note 7).
Disposals in 2013 mainly comprise premises due to
Buildings
the closure of travel agency offices by Viajes Halcón,
899
873
69,777
54,953
and furniture
28,481
23,619
12,041
9,349
Technical installations and machinery
S.A.U. and Viajes Ecuador, S.A.U.
20142013
Other installations, equipment
b) PROPERTY, PLANT AND EQUIPMENT
LOCATED ABROAD
Details of property, plant and equipment located
111,19888,794
abroad at 31 October are as follows:
d) IMPAIRMENT
THOUSANDS OF EUROS
The Group has not recognised any major im-
2014
DESCRIPTION
COST
ACCUMULATED
DEPRECIATION
Be Live Grand Punta Cana Hotel
94,652
(27,718)
66,934
Aircraft and advances on aircraft TOTAL
e) PROPERTY, PLANT AND EQUIPMENT PLEDGED AS COLLATERAL
186,041
(55,529)
130,512
Be Live Canoa Hotel
81,231
(26,577)
54,654
17,876
(8,586)
9,290
plant and equipment with a carrying amount
379,800
(118,410)
261,390
of Euros 96,444 thousand (Euros 96,112
2013
At 31 October 2014 the Group has property,
thousand in 2013) which have been pledged
as collateral for several mortgage-backed
loans and credit facilities (see note 26 (b)).
Be Live Grand Punta Cana Hotel
89,918
(23,314)
66,604
Aircraft and advances on aircraft 170,546
(41,188)
129,358
Be Live Canoa Hotel
67,825
(22,786)
45,039
21,063
(10,855)
10,208
Under construction and advances include
349,352
(98,143)
251,209
for the construction and assembly of aircraft.
52
pairment losses in 2014 and 2013.
f) COMMITMENTS
payments made to the aircraft manufacturer
back to index
11) INVESTMENT PROPERTY
At 31 October 2014 and 2013 the Company
has the following commitments to purchase
Details of investment property and movement dur-
aircraft:
ing the year are as follows:
AIRCRAFT
20142013
Boeing 737-800
8
9
Boeing 787-8
3
8
1117
On 14 May 2014 Air Europa Líneas Aéreas,
S.A.U. entered into an agreement with a
company unrelated to the Group, whereby
it transferred its purchase positions of five
Boeing 787-8, due to be delivered in 2016
and 2017, to a special purpose entity controlled by that company. After delivery Air Europa Líneas Aéreas, S.A.U. will operate these
aircraft under operating leases.
The advance payments made to date under the agreement will be used for security
THOUSANDS OF EUROS
2014
DESCRIPTION
LAND
779
BUILDINGS
TOTAL
5,9596,738
Additions
19
171
190
Disposals
-
(712)
(712)
798
5,418
6,216
at 1 November 2013
-
(201)
(201)
Depreciation
-
(174)
(174)
at 31 October 2014
-
(375)
(375)
Impairment losses -
(1,547)
(1,547)
-
(1,547)
(1,547)
798
3,496
4,294
at 31 October 2014
deposits for the lease of the aircraft and
therefore have been transferred to other
financial assets under non-current investments on the accompanying consolidated
balance sheet.
THOUSANDS OF EUROS
2013
DESCRIPTION
The advances paid to date amount to USD
24,413 thousand for the fleet of 737-800
Additions
(USD 7,675 thousand in 2013) and USD 5,792
Transfers from assets held for sale thousand for the fleet of 787-8 (USD 15,262
thousand in 2013), totalling an equivalent of
Euros 22,938 thousand at 31 October 2014
BUILDINGS
TOTAL
1,744
1,763
3,5034,263
-
712
712
779
5,959
6,738
at 1 November 2013
Air Europa Líneas Aéreas intends to finance
its purchase commitments using funds gen-
at 31 October 2013
can be entered into with aircraft lessors.
19
760
(Euros 18,159 thousand in 2013).
erated by the Group and transactions that
LAND
Depreciation
-
(73)
(73)
(174)
(128)
(302)
-
(201)
(201)
779
5,759
6,538
g) INSURANCE
The Group has taken out insurance policies to cover
a) GENERAL
the risk of damage to its property, plant and equip-
The main additions for 2013 comprise commercial
ment. The coverage of these policies is considered
premises and parking spaces in several locations in
sufficient.
Spain.
2014 Annual Report
53
back to index
b) IMPAIRMENT
In 2014 impairment totalling Euros 1,547 thousand
has been recognised on property investments in relation to commercial premises and parking spaces in
several locations in Spain.
c) INSURANCE
The Group has taken out various insurance policies
12) FINANCE LEASES – LESSEE
The Group has leased the following types of assets
under finance leases:
to cover the risk of damage to its investment pro-
THOUSANDS OF EUROS
perty. The coverage of these policies is considered
OTHER PROPERTY, PLANT
AND EQUIPMENT
sufficient.
TOTAL
Initially recognised at:
192,100
192,100
(58,122)
(58,122)
133,978
133,978
177,801
177,801
37,192)
(37,192)
140,609
140,609
Fair value
and impairment losses
Carrying amount at
31 October 2014
Initially recognised at:
Fair value
and impairment losses
Carrying amount at
31 October 2013
The Group has leased assets under finance leases,
basically aircraft, maintenance equipment and handling equipment. The assets acquired under finance
leases are included under property, plant and equipment on the consolidated balance sheet.
Future minimum lease payments are reconciled with
their present value as follows:
THOUSANDS OF EUROS
54
20142013
Future minimum payments
123,495
126,605
Unaccrued finance costs
(13,766)
(15,199)
Present value
109,729
111,406
back to index
Details of minimum payments and the
present value of finance lease liabilities,
THOUSANDS OF EUROS
by maturity date, are as follows:
2014
2013
MINIMUM PAYMENTS
PRESENT VALUE
17,643
14,713
18,635
16,145
One to five years
74,706
65,031
69,887
59,679
Over five years
31,146
29,985
38,083
35,582
123,495
109,729
126,605
111,406
Less current portion
(17,643)
(14,713)
(18,635)
(16,145)
Total non-current
105,852
95,016
107,970
95,261
Less than one year
MINIMUM PAYMENTS PRESENT VALUE
Finance lease liabilities are effectively secured as the
100,203 thousand and Euros 43,291 thousand, re-
rights to the leased assets revert to the lessor in the
spectively. (In 2013 Euros 600,950 thousand, Euros
event of default.
68,687 thousand and Euros 49,507 thousand, respectively).
13) OPERATING LEASES - LESSEE
The Group has leased aircraft, hotels and travel
14) RISK MANAGEMENT POLICY
agency sales offices from third parties under ope-
a) FINANCIAL RISK FACTORS
rating leases.
The Group’s activities are exposed to various financial risks: market risk (including currency risk, inter-
Operating lease payments have been recognised as
est rate risk and aircraft fuel price risk), credit risk
an expense for the year as follows:
and liquidity risk. The Group’s global risk manage-
THOUSANDS OF EUROS
Minimum lease payments
20142013
182,120
171,544
ment programme focuses on uncertainty in the financial markets and aims to minimise the potential
adverse effects on the Group’s profits. The Group
uses derivatives to mitigate certain risks.
Risks are managed by the Group’s Finance Depart-
Future minimum payments under operating leases
are as follows:
20142013
Less than one year
168,919
147,587
One to five years
475,541
445,384
Over five years
102,011
126,173
board of directors. This department identifies, evaluates and mitigates financial risks in close collabora-
THOUSANDS OF EUROS
ment in accordance with policies approved by the
746,471719,144
tion with the Group’s operational units. The board of
directors issues global risk management policies, as
well as policies for specific issues such as currency
risk, interest rate risk, liquidity risk, the use of derivatives and non-derivative instruments, and investments of cash surpluses.
(i) Market risk
Market risk is mainly derived from trends in the
These payments basically relate to lease commit-
Spanish tourist market, although to minimise this
ments for aircraft, hotels and travel agency offices
risk the Group’s area of influence is also diversified
and other items, for Euros 602,976 thousand, Euros
into Europe and the USA/Canada.
2014 Annual Report
55
back to index
(ii) Currency risk
debts at an aggregate level require a high level of
The Group operates internationally and is therefore
judgement. The credit rating of the country, based
exposed to foreign currency risks, especially with re-
on information provided by external agencies, is
gard to the US Dollar. Currency risk is associated with
used to calculate the individual country-specific valu-
future commercial transactions, recognised assets and
ation allowance for bad debts. Any decrease in the
liabilities, and net investments in foreign operations.
volume of outstanding balances entails a reduction
in impairment resulting from an aggregate analysis
In order to control currency risk associated with fu-
of historical bad debts, and vice versa.
ture commercial transactions, the Group uses forward currency contracts. Currency risk arises when
Trade and other receivables from third parties mainly
future commercial transactions are presented in a
comprise balances receivable from travel agents and
foreign currency other than the Group’s functional
private clients for passenger transport in the Air di-
currency. The Group’s financial management is re-
vision, receivables from private clients in the Travel
sponsible for controlling the net position of each
Agency division, receivables from airlines in the Han-
foreign currency by entering into external forward
dling division, receivables from travel agencies in the
currency contracts. Details of the amounts of trans-
Tour Operator division and receivables from tour
actions in foreign currency are provided in note 32.
operators and travel agencies in the Hotel division.
Transactions with travel agencies in the Air division are
carried out using a settlement system managed by
(iii) Credit risk
the International Air Transportation Association (lATA),
The Group is not significantly exposed to credit risk.
which in each country also imposes credit conditions
The Group has policies to ensure that its tour opera-
involving risk hedging on travel agencies using the
tor customers have adequate credit records. Sales
scheme. The Group has a policy of arranging credit in-
to travel agencies are paid in cash or by credit card.
surance for most other trade and credit transactions
Derivative and cash transactions are only performed
in each division, which partially covers these balances.
with financial institutions that have high credit ratings. The Group has policies to limit the amount of
(iv) Liquidity risk
risk with any one financial institution.
The Group applies a prudent policy to cover its liquidity risks, based on having sufficient cash and
Valuation allowances for bad debts, the review of
marketable securities as well as sufficient financing
individual balances based on customers’ credit rat-
through credit facilities to settle market positions.
ings, market trends, and historical analysis of bad
The excess of current liabilities compared to current
56
back to index
assets common among groups operating in the travel sector reflects the difference in average collection
days from customers and average payment days to
16) FINANCIAL ASSETS
BY CATEGORY
situation by controlling these average periods and
a) CLASSIFICATION OF FINANCIAL
ASSETS BY CATEGORY
by obtaining and drawing funds from credit facilities
The classification of financial assets by category and
with financial institutions (see note 26).
class, as well as a comparison of the fair value and
suppliers. The Finance department manages this
the carrying amount, are provided in Appendix VII.
(v) Cash flow and fair value interest rate risks
Interest rate risk arises from non-current borrowings. Borrowings at variable interest rates expose the
Group to cash flow interest rate risks. The Group has
taken out interest rate swaps to partially hedge the interest rate risk derived from bank debt (see note 18).
17) INVESTMENTS AND TRADE
RECEIVABLES
a) INVESTMENTS
Details of investments are as follows:
The Group is sensitive to fluctuations in
THOUSANDS OF EUROS
the price of the jet fuel for the aircraft
2014
it operates. To minimise this risk, the
Group contracted short-term jet fuel
futures during the reporting period to
hedge between 20% and 50% of forecast consumption.
NON-CURRENT
NON-CURRENT
CURRENT
Related parties
Loans
-
Unrelated parties
1,378
417
2,513
191
200
121
16,174
(11,178)
Equity instruments
15) EQUITY-ACCOUNTED
INVESTEES
CURRENT
2013
Impairment
Loans
1,134
5,573
2,623
6,074
Impairment
(5,573)
(5,531)
Debt securities
55
1,315
Details of equity-accounted investees
Hedging derivatives (note 18)
4,694
586
are provided in Appendix VI.
Deposits and guarantees
95,766
67,621
63,756
18,475
In 2013 S.R. Technics Spain, S.A. was
Total
97,09173,948 66,917 28,428
sold for Euros 2,200 thousand, generating a profit on the sale of Euros 2,054 thousand,
which was recognised in the consolidated income
At 31 October 2014 current loans to related parties
statement.
reflect outstanding balances with Fondo de Alquileres, S.L. and Pepemobile, S.L.U. amounting to Euros
600 thousand and Euros 417 thousand, respectively
(Euros 1,000 thousand and Euros 1,250 thousand in
2013 thousand, together with Euros 680 thousand
owed by JHG Investment Models, S.L.U.).
Deposits and guarantees basically comprise longterm deposits delivered to owners of travel agency
sales offices amounting to Euros 1,806 thousand
(Euros 2,236 thousand in 2013), long- and shortterm deposits on aircraft leases that Air Europa
Líneas Aéreas, S.A.U. has delivered to the lessors
equivalent to Euros 19,313 thousand and Euros 0
2014 Annual Report
57
back to index
At 31 October 2014 the
Group has recognised
impairment on advances totalling Euros 1,510
thousand (Euros 1,510
thousand in 2013) that
were pending refund
thousand, respectively, at 31 October 2014 (Euros
from a supplier undergoing insolvency proceedings.
16,089 thousand and Euros 1,880 thousand, re-
This amount was partially secured by a mortgage on
spectively in 2013) and long- and short-term depos-
a building owned by the supplier (see note 35).
its paid to aircraft owners as periodic maintenance
guarantees equivalent to Euros 35,962 thousand
and Euros 31,682 thousand, respectively, at 31
c) IMPAIRMENT
October 2014 (Euros 41,278 thousand and Euros
An analysis of the changes in allowance accounts re-
8,792 thousand, respectively in 2013). Globalia Cor-
lated to impairment of financial assets measured at
poración Empresarial, S.A., the Parent, also holds
amortised cost due to credit risk is as follows:
current bank deposits maturing in more than three
months amounting to Euros 15,600 thousand (Euros
3,048 thousand at 31 October 2013).
THOUSANDS OF EUROS
2014
b) TRADE AND OTHER RECEIVABLES
Details of trade and other receivables are as follows:
LOANS
2014
2013
CURRENT
CURRENT
Balance at 1 November 2013 (5.531)
(56.720)
(62.251)
(42)
(3.725)
(3.767)
(5.573)
(60.445)
(66.018)
Balance at
31 October 2014
2013
Unrelated parties
Trade receivables
283,362
286,360
Other receivables
21,032
30,307
Current
Balance at 1 November 2012
904
1,003
Charges
5,735
5,728
30,228
31,583
Balance at
Impairment
(60,445)
(56,720)
Total
280,816298,259
Personnel
Taxation authorities, income tax Public entities, other TOTAL
Current
Charges
THOUSANDS OF EUROS
TRADE RECEIVABLES
31 October 2013
-
(50.189)
(50.189)
(5.531)
(6.532)
(12.063)
(5.531)
(56.720)
(62.251)
d) CLASSIFICATION BY MATURITY
The classification of financial assets by maturity is
Other receivables from unrelated parties includes
shown in Appendix VIII.
advances paid to suppliers by companies from the
tee operational capability to render services in the
e) AMOUNTS DENOMINATED IN FOREIGN CURRENCIES
coming season, as is common practice in the sector.
Details of monetary financial assets denominated in
These advances are subsequently cancelled.
foreign currencies are as follows:
travel agency and tour operator divisions to guaran-
58
back to index
THOUSANDS OF EUROS
2014
US DOLLAR
MEXICAN
PESO
DOMINICAN
PESO
VENEZUELAN
BOLIVAR
OTHER
CURRENCY
TOTAL
Non-current investments
66,411
11
26
-
23
66,471
Total non-current financial assets
66,411
11
26
-
23
66,471
Trade and other receivables
Trade receivables – current
Other receivables
16,272
1,303
643
-
4,880
23,098
35
3,053
13
-
-
3,101
Current investments
34,284
1
13
-
658
34,956
Cash and cash equivalents
Cash
Cash equivalents
Total current financial assets
Total financial assets
9,042
29
1,554
19,848
10,353
40,826
-
-
-
4,788
-
4,788
59,633
4,386
2,223
24,636
15,891
106,769
126,044
4,397
2,249
24,636
15,914
173,240
THOUSANDS OF EUROS
2013
US DOLLAR
MEXICAN
PESO
DOMINICAN
PESO
OTHER
CURRENCY
TOTAL
64,295
2
25
25
64,347
Total non-current financial assets
64,295
2
25
25
64,347
Trade receivables – current
Other receivables
18,008
208
2,058
1,904
22,178
(140)
2,848
931
(2)
3,637
Current investments
9,701
1
1
818
10,521
Cash and cash equivalents
Cash
Total current financial assets
3,638
45
2,131
89,482
95,296
31,207
3,102
5,121
92,202
131,632
95,502
3,104
5,146
92,227
195,979
Trapped cash in Venezuela pending repatriation
these financial instruments, after recognising in the
that originally amounted to VEF 1,272 million is
accompanying balance sheet the devaluation and
recognised as financial instruments (cash and cash
the estimated recoverable amount of these instru-
equivalents, current investments and non-current
ments that have an impact on the income statement
investments). Air Europa Líneas Aéreas, S.A.U. pre-
for 2014 of Euros 41,695 thousand (Euros 17,103
sents a net balance of Euros 61,471 thousand for
thousand in 2013).
2014 Annual Report
59
back to index
18) DERIVATIVE FINANCIAL
INSTRUMENTS
THOUSANDS OF EUROS
Details of derivative financial instruments are as follows:
FAIR VALUES
LIABILITIES
ASSETS
2014
NOTIONAL AMOUNT
Derivatives held for trading and at fair value through profit or loss CURRENT
NON-CURRENT
CURRENT
a) Jet fuel derivatives
Aircraft fuel futures
281,332
-
-
(30,632)
Total derivatives traded on OTC markets
281,332
-
-
(30,632)
281,332
-
-
(30,632)
Total derivatives at fair value through profit or loss
Hedging derivatives Cash flow hedges
Foreign currency swaps
Interest rate swaps
Total derivatives at fair value through changes in equity
Total derivatives 134,246
4,694
-
-
7,500
-
(280)
-
141,746
4,694
(280)
-
141,746
4,694
(280)
30,632
2013
Hedging derivatives Cash flow hedges
Foreign currency swaps
142,329
-
-
(1,246)
Interest rate swaps
7,500
-
(418)
-
Aircraft fuel futures
146,690
586
-
-
Total
296,519
586
(418)
(1,246)
296,519
586
(418)
(1,246)
Total hedging derivatives (notes 16 (a) and 25 (a))
a) INTEREST RATE SWAPS
poración Empresarial, S.A. has entered into US Do-
To manage its interest rate risks, Globalia Activos
llar forward exchange contracts.
Inmobiliarios, S.A.U. has signed a variable-to-fixed
interest rate swap for a notional amount of Euros
The fair values of these forward contracts are based
7,500 thousand. The contract matures in 2016.
on the market values of equivalent instruments. All
forward exchange contracts are effective as cash
The fair value of the financial swaps is based on the
market values of equivalent derivative financial instruments at the consolidated reporting date. All interest rate swaps are effective as cash flow hedges.
flow hedges.
c) HEDGING CONTRACTS OF JET FUEL
LIABILITIES:
To hedge the risk of fuel price fluctuations Air Euro-
b) FORWARD EXCHANGE CONTRACTS
pa Líneas Aéreas, S.A.U. has entered into a number
In order to manage its currency risks, Globalia Cor-
of jet fuel futures contracts. These contracts expire
60
back to index
19) INVENTORIES Details of inventories are as follows:
THOUSANDS OF EUROS
in the short term. The fair values of these forward
contracts are based on the market values of equivalent instruments.
2014
Production and distribution business
2013
Raw materials and other supplies
15,876
13,696
5,257
4,519
Advances
21,133 18,215
At 31 October 2014 Air Europa Líneas Aéreas, S.A.U.
has measured the jet fuel futures at Euros 30,632
thousand in the consolidated income statement.
ce consumables, aircraft catering materials and hotel
consumables.
d) CASH FLOW HEDGES
The total amount of cash flow hedges recognised in
equity is as follows:
these policies is considered sufficient.
20142013
Exchange rate hedge
3,267
(893)
Interest rate swaps
(196)
(292)
-
410
3,071
(775)
The total amount of cash flow hedges which has
been transferred from recognised income and expense to consolidated profit or loss is as follows:
THOUSANDS OF EUROS
GAINS/(LOSSES)
20142013
Exchange rate hedge
1,246
-
175
503
(586)
(5,837)
835
(5,334)
Interest rate swaps
Fuel price hedge
The Group has taken out insurance policies to cover
the risk of damage to its inventories. The coverage of
THOUSANDS OF EUROS
INCOME/(EXPENSES)
Fuel price hedge
The Group’s inventories mainly comprise maintenan-
20) PREPAYMENTS Details of prepayments are as follows:
THOUSANDS OF EUROS
2014
2013
CURRENT
CURRENT
Prepayments for
operating leases
7,074
9,716
Prepayments for unused
flight tickets
2,829
4,195
Aircraft maintenance
3,339
3,061
Other
2,203
2,588
Total
15,44519,560
21) CASH AND CASH
EQUIVALENTS
Details of cash and cash equivalents are as follows:
The foreign currency futures and the interest rate
THOUSANDS OF EUROS
swap are transferred to the income statement under exchange differences and finance costs, respectively. Fuel price hedges are transferred to supplies.
All the aforementioned hedge instruments are contracted by subsidiaries.
Cash in hand and at banks Current bank deposits
2014
2013
77,029
92,084
7,677
17,828
84,706
109,912
2014 Annual Report
61
back to index
22) EQUITY
which requires that companies transfer 10% of prof-
Details of consolidated equity and movement during
reaches an amount equal to 20% of share capital.
the year are shown in the consolidated statement of
changes in equity.
a) CAPITAL
At 31 October 2014 the share capital of Globalia
Corporación Empresarial, S.A., the Parent, is represented by 168,944,700 registered shares of Euros
0.1 par value each, fully subscribed and paid.
its for the year to a legal reserve until this reserve
The legal reserve is not distributable to shareholders and if it is used to offset losses, in the event that
no other reserves are available, the reserve must be
replenished with future profits.
(ii) Voluntary reserves
These reserves are freely distributable.
Mr. Juan José Hidalgo Acera owns 51.58% of the Parent’s share capital. No legal person holds 10% or
more of the Parent’s share capital.
c) TRANSLATION DIFFERENCES
Details of translation differences by origin are as follows:
b) RESERVES
Details of reserves and profit for the year and movement are shown in Appendix IX.
The Parent has reclassified the balance of freely
available reserves, i.e. the reserves resulting from
first-time adoption of the Spanish General Chart of
Accounts, changes in criteria, the correction of misstatements and the translation of capital to Euros, to
voluntary reserves.
(i) Legal reserve
The legal reserve has been appropriated in compliance with article 274 of the Spanish Companies Act,
THOUSANDS OF EUROS
2014
2013
Bajuba de México Consultores S de RL de CV
Be Live Trading. INC.
CH Marketing, Corp.
Ciba Inversiones, S.A.
Globalia Hotels & Resorts Dominicana.
Globalia Incoming Services Dominicana, S.A.
Globalia Incoming Services Mexico, S.R.L. de C.V.
Globalia Lease Finance, Limited
Globalia Lease Finance Two, Limited
Globalia Lease Finance Three, Limited
Globalia Lease Finance Four, Limited
Globalia Lease Finance Five, Limited
Globalia Lease Finance Six, Limited
Globalia Servicios Corporativos Dominicana, S.A.
Hotel Canoa, S.A.
Intertravel, S.R.L
Inversiones Bávaro, S.A.
Inversiones Inmobiliarias RCJ, S.A.
Inversiones La Albufera, S.A.S
Julma Development, N.V.
MK Dominicana USA INC
MK Media Corp.
MK Puerto Rico, S.A.
MK Tours INC
MK Travel & Tours INC
Morocco, G.H.S.
Operadora Globalia México, S.A. de C.V.
Servicios D&A DE R.L. de C.V.
Smart Inversiones, S.A.S
(127)
8
(339)
-
(298)
(2)
(32)
754
6
247
541
551
231
(19)
516
119
2,912
160
(266)
-
(355)
(118)
7
(163)
(70)
(267)
(677)
(178)
319
(82)
5
(341)
(5)
321
(20)
(72)
(303)
(91)
85
98
121
(256)
(34)
(544)
(900)
(54)
95
248
467
(61)
(113)
62
(141)
14
(423)
(817)
(103)
437
Total
62
3,460 (2,407)
back to index
23) NON-CONTROLLING INTERESTS
Details of non-controlling interests by company and movement for the year are as follows:
THOUSANDS OF EUROS
2014
COMPANY
BALANCE AT 1
NOVEMBER
Viajes Tu Billete, S.L.
825
Globalia Autocares, S.A.
SHARE OF PROFITS/
(LOSSES)
DISPOSALS
BALANCE AT
31 OCTOBER
DIVIDENDS
-
(85)
(69)
671
772
-
369
-
1,141
Geomoon, S.L.
30
-
(1)
-
29
City Transfers, S.A.S
(2)
-
-
-
(2)
1,625
-
283
(69)
1,839
DIVIDENDS
BALANCE AT
31 OCTOBER
2013
COMPANY
BALANCE AT 1
NOVEMBER
763
Globalia Autocares, S.A.
SHARE OF PROFITS/
(LOSSES)
DISPOSALS
-
138
(76)
825
592
-
179
1
772
Pepeticket, S.L.
29
(29)
-
-
-
Geomoon, S.L.
30
-
-
-
30
City Transfers, S.A.S
(2)
-
-
-
(2)
317
(75)
1,625
1,412
(29)
The companies or natural persons, both related to the Group and unrelated parties, with a direct
or indirect interest of at least 10% in the share capital of a Group company are as follows:
· Transportes Chapín, S.L. (10% Globalia Autocares, S.A.).
· Mr. Francisco Manuel Rodríguez García (25% Viajes Tu Billete, S.L.).
· Dominio de Proyectos, S.L.U. (49% Geomoon, S.L.).
24) PROVISIONS
Details of provisions are as follows:
THOUSANDS OF EUROS
2014 NON-CURRENT
Provisions for other
employee benefits
Provisions for major repairs
2013
CURRENT
NON-CURRENT
CURRENT
180
-
180
-
81,562
67,576
86,548
45,212
Provisions for customer
loyalty programmes
-
909
-
646
Provisions for emission
allowances
7,555
-
3,049
-
Total
89,297 68,48589,777 45,858
2014 Annual Report
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The provision for major repairs includes the provision for inspections to be made in the coming years
considering the regulatory maintenance commitments for aircraft under operating leases.
26) PAYABLES AND TRADE
PAYABLES
a) PAYABLES
Details of payables are as follows:
An amount of Euros 7,555 thousand (Euros 3,049
thousand in 2013) is also recognised
THOUSANDS OF EUROS
in relation to the provision for green-
house gas emissions.
2014 NON-CURRENT
2013
CURRENT
NON-CURRENT
CURRENT
Unrelated parties
25) FINANCIAL LIABILITIES BY CATEGORY
Loans and borrowings
29,308
14,541
50,706
28,876
Finance lease payables
95,016
14,713
95,261
16,145
-
-
-
1,246
a) CLASSIFICATION OF
FINANCIAL LIABILITIES
BY CATEGORY
Trading derivatives
Hedging derivatives
280
30,632
418
-
Other financial liabilities
3,493
-
4,415
-
The classification of financial liabilities
Guarantees and deposits
received
-
22,083
-
19,330
by category and class and a compari-
Total
son of the fair value with the carrying
128,09781,969 150,80065,597
amount are shown in Appendix X.
b) OTHER INFORMATION ON PAYABLES
(i) Main characteristics of payables
The terms and conditions of loans and payables are
provided in Appendix XII.
Credit facilities with a limit of Euros 7,750 thousand
held by a Group company were cancelled in 2014.
During 2014 the Parent arranged new current loans
amounting to Euros 8,157 thousand, which accrue
interest at market rates.
During 2013, the Parent arranged a new loan for Euros 13,500 thousand. This loan falls due on 28 October 2021 and accrues interest at market rates.
The Parent has extended guarantees to third parties
on behalf of Group companies amounting to Euros
52,753 thousand (Euros 87,487 thousand in 2013).
As these are operating guarantees, the Parent’s directors do not expect them to generate any liabilities
for the Parent.
The Group has the following credit facilities and discount lines at 31 October:
64
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THOUSANDS OF EUROS
2014
DRAWN DOWN
Credit facilities:
Globalia Corporación Empresarial, S.A. Globalia Mantenimiento Aeronáutico, S.L.U.
Air Europa Líneas Aéreas, S.L.U.
Inversiones Costa Adeje, S.A.U.
Globalia Activos Inmobiliarios, S.A.U.
Pipa Holding, B.V.
Monforte, Castromil, Globalia UTE
Globalia Handling, S.A.U.
Globalia Hotel Palace de Muro, S.L.
La Hispano, Monforte, Castromil,Globalia UTE
-
6,390
134
-
-
-
-
-
2,496
-
2013
LIMIT
DRAWN DOWN
LIMIT
73,000
7,610
5,000
-
1,200
-
-
6,000
2,500
-
11,628
8,453
-
1,176
-
7,771
-
-
-
-
40,400
8,675
2,149
2,400
7,750
300
6,000
150
Discount lines
Travelplán Club Spain, S.L.U.
-
-
-
3,000
Travelplán Business, S.A.U.
-
3,500
-
4,000
9,02098,81029,02874,824
The following payables are secured as shown below
(see note 10):
THOUSANDS OF EUROS
CREDITOR
GUARANTEE
2014
2013
Spanish bank Hotel Be Live La Niña 2,522
4,628
Spanish bank Maintenance hangar 6,390
8,453
Spanish bank Pozuelo business centre and central offices in Llucmajor
11,879
15,428
Spanish bank Hotel Be Live Orotava
11,645
13,393
32,43641,902
c) TRADE AND OTHER PAYABLES
Details of trade and other payables are
d) CLASSIFICATION BY
MATURITY
as follows:
The classification of financial liabilities by
THOUSANDS OF EUROS
2014
2013
CURRENT
CURRENT
maturity is shown in Appendix XI.
Unrelated parties Suppliers
297,783
302,304
Payables
18,381
21,200
Personnel
27,659
24,012
9,698
789
Public entities, other 20,842
24,893
Advances
21,683
30,260
Taxation authorities, income tax Total
396,046403,458
2014 Annual Report
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e) AMOUNTS DENOMINATED IN FOREIGN CURRENCIES
Details of financial liabilities denominated in foreign currencies are as follows:
THOUSANDS OF EUROS
2014
2013
TOTAL
US DOLLAR
Non-current payables THOUSANDS OF EUROS
US DOLLAR
TOTAL
Non-current payables Finance lease payables
94,207
94,207
4,241
4,241
2,232
2,232
93,300
93,300
96,43996,439
Total non-current liabilities
Total non-current liabilities
Current payables Finance lease payables
Current payables 12,870
12,870
6,638
6,638
685
685
11,506
11,506
736
736
23,004
23,004
1,478
1,478
34,121
34,121
988
988
Trade and other payables
Suppliers
Other payables
Suppliers
Other payables
38,03738,037
Total financial liabilities
97,54197,541
134,476
53,98953,989
134,476
151,530
151,530
27) LATE PAYMENTS TO SUPPLIERS. “REPORTING REQUIREMENT”,
THIRD ADDITIONAL PROVISION OF LAW 15/2010 OF 5 JULY 2010
Details of late payments to suppliers by Spanish consolidated companies are as follows:
Payments made and outstanding at the reporting
2014
Within maximum legal period
Other
Total payments for the year
AMOUNT
%
AMOUNT
%
1,918,376
86%
1,729,127
85%
311,119
14%
317,064
15%
2,229,495
100%
2,046,191
100%
49
- %
43
-%
39,683
- %
46,950
-%
Weighted average late payment days
Late payments exceeding the maximum
legal period at the reporting date
2013
Royal Decree-Law 4/2013, of 22 February 2013,
tend this period but under no circumstances may
states that if no payment date or period has been es-
the agreed payment period exceed 60 calendar days
tablished in the contract, payment should be made
(according to the agreement with the suppliers). The
within 30 calendar days from the date the goods or
Group has agreements with its suppliers for deferral
services are received. The parties may agree to ex-
of payment by more than 30 days.
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28) ACCRUALS
El Grupo tiene pendientes de inspección por las
autoridades fiscales los siguientes ejercicios de los
Details of accruals are as follows:
principales impuestos que le son aplicables:
THOUSANDS OF EUROS
Income received in advance
2014
2013
CURRENT
CURRENT
(193,739)
(222,224)
TAX
YEARS OPEN TO INSPECTION
Income tax
2012-2014
Value added tax
2012-2014
Personal income tax
2012-2014
Current accruals in the consolidated balance sheet
Capital gains tax
2012-2014
at 31 October 2014 primarily include payments re-
Business activities tax
2011-2014
ceived in advance totalling Euros 186,831 thousand
Social Security
2012-2014
(Euros 212,573 thousand in 2013) derived from how
Non-residents
2011-2013
Air Europa Líneas Aéreas, S.A.U. handles scheduled
flight tickets sold and not used.
29) TAXATION
THOUSANDS OF EUROS
Details of balances with public entities are as follows:
2014
NON-CURRENT
2013
CURRENT
NON-CURRENT
CURRENT
Assets
Deferred tax assets
22,171
-
21,837
-
Current tax assets
-
5,735
-
5,728
Value added tax and similar taxes
-
30,228
-
31,582
22,171
35,963
21,837
37,310
Liabilities
Deferred tax liabilities
17,707
-
15,524
-
Current tax liabilities
-
9,698
-
789
Value added tax and similar taxes
-
20,842
-
24,893
17,707
30,540
15,524
25,682
In 2011 the tax inspection of León Activos Aeronáu-
Moreover, the tax prescription period for the Spanish
ticos in connection with transport registration tax
companies that file consolidated tax returns (which
(Impuesto Especial sobre Determinados Medios
are detailed below) has been interrupted due to the
de Transporte) was completed. The result was a
tax authorities opening inspections in 2012 of corpo-
disputed tax assessment which proposed a settle-
rate income tax for the years 2008, 2009, 2010 and
ment of Euros 893 thousand and a penalty of Eu-
2011. They also initiated inspections of VAT, withhold-
ros 592 thousand. After receiving the ruling of the
ings and payments on account for personal income
Central Economic Administrative Court (Tribunal
tax and withholdings and payments on account for
Económico-Administrativo Central or TEAC), during
capital gains tax from July 2008 until December 2011.
the coming months the company will file a judicial
review claim. These annual accounts do not include
In 2014 assessments with tax payments totalling
an accounting provision for this contingency as it is
Euros 8,440 thousand plus late payment interest of
considered probable that the Court will rule in fa-
Euros 1,943 thousand have been accepted, while as-
vour of the company.
sessments that amount to Euros 39,985 thousand
2014 Annual Report
67
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plus Euros 6,836 thousand in late payment interest
Activos Inmobiliarios, S.A.U.; Globalia Sistemas y Co-
have been contested The Group companies that
municaciones, S.L.U.; Globalia Hotel Orotava, S.L.U.;
have contested the assessments have filed for a ju-
Iberhandling, S.A.; Globalia Call Center, S.A.U.; Be
dicial review, the outcome of which is pending. The
Live Hotels, S.L.U.; Globalia Handling, S.A.U.; Globalia
only case for which no assessment decision has been
Artes Gráficas, S.L.; Globalia Hotel Talavera, S.A.U.;
received is that related to corporate income tax for
Globalia Hotel Palace de Muro, S.L.U.; Media & De-
2010-2011 and VAT of Group Company, Iberotours,
sign, S.A.U.; Viajes Unalia, S.A.U.; Groundforce Cargo,
S.A.U. The Company’s directors and tax advisers con-
S.L.U.; Globalia Servicios Corporativos, S.L.U.; Viajes
sider that it is not likely that any significant liabilities
Ecuador, S.A.U.; Globalia Gestión Seguros, S.L.U.;
would arise as a result of the above and therefore no
Welcome Incoming Services, S.L.U.; Pepechofer,
provision has been recognised in this regard.
S.L.U.; Globalia Travel Club Spain, S.L.U.; Globalia Hotel La Niña, S.L.; Synergy Glb Comex, S.L.U.; Viajes Tu
In 2011, a tax inspection began on the hotel com-
Billete, S.L.; Globalia Trading Services, S.L.U.; Ibero-
pany located in the Dominican Republic. The inspec-
tours, S.A.U.; León Activos Aeronáuticos, S.L.U. and
tion relates to income tax and the industrialised
Sunion Proyectos y Construcción, S.L.U.
goods and services tax for the years 2008 and 2009
and a tax assessment has been issued for USD 14.6
A reconciliation of net income and expenses for the
million plus charges and late payment interest. On
year and taxable income is provided in Appendix XIII.
15 January 2014 an agreement was reached with the
The relationship between the tax expense and ac-
Dominican Directorate-General for Taxation (DGII)
counting profit for the year is as follows:
regarding the 2008 and 2009 tax years as part of
the agreement on the 2010 and 2011 tax years. The
Details of the tax expense in the consolidated in-
agreed amount was RD$ 147,565,498, equivalent
come statement are as follows:
to Euros 2,674 thousand, recognised in the consolidated income statement for the year. The Group’s
consolidated balance sheet includes no additional
THOUSANDS OF EUROS
2014
2013
provision for this contingency as Group manage-
Current tax
ment and legal counsel consider that if a liability
For the year 15,829
8,990
were confirmed, its effect on the consolidated an-
Foreign taxes 2,360
-
nual accounts would be immaterial.
Tax arising from tax inspections 11,153
-
Due to the treatment permitted by fiscal legislation of certain transactions, additional tax liabilities
could arise in the event of inspection. In any event,
the directors of the Parent consider that any such liabilities that could arise would not have a significant
effect on the consolidated annual accounts.
a) INCOME TAX
29,342
8,990
Deferred tax Source and reversal of temporary differences
Maximum amortisation and depreciation (2,390)
-
Other (2,866)
1,801
Previously unrecognised deferred tax assets
24,086 10,791
The Parent files consolidated tax returns with oth-
Details of the tax income recognised in consolidated
er companies belonging to the Globalia business
equity are as follows:
group. This tax group is headed by Globalia Cor-
THOUSANDS OF EUROS
poración Empresarial, S.A., as Parent, and includes
the following subsidiaries : Air Europa Líneas Aé-
reas, S.A.U.; Viajes Halcón, S.A.U.; Globalia Business
Current tax
Travel, S.A.U.; Globalia Formación, S.L.U.; Globalia
Mantenimiento Aeronáutico, S.L.U.; Globalia Autocares, S.A.; Globalia Broker Services, S.A.U.; Globalia
68
2014
2013
Adjustments for changes to equity
-
(2,090)
-
(2,090)
back to index
Details of deferred tax assets and
liabilities by type of asset and liability
THOUSANDS OF EUROS
are as follows:
ASSETS
2014
Accelerated depreciation and amortisation and leasing
Amortisation (Law 16/2012)
Financial hedging instruments
LIABILITIES
2013
2014
NET
2013
2014
2013
(11,569)
626
626
(11,609)
(12,195)
(10,983)
2,427
2,427
176
176
(1,907)
(499)
(1,731)
(323)
10,711
14,570
-
-
10,711
14,570
498
4,073
-
-
498
4,073
Allocation of results of temporary joint ventures
-
-
(2,687)
(2,687)
(2,687)
(2,687)
Deferral of reinvestment
-
-
(82)
(82)
(82)
(82)
Grants
-
-
(61)
(61)
(61)
(61)
7,733
2,392
(1,361)
-
6,372
2,392
22,171
21,837
(17,707)
(15,524)
4,464
6,313
Tax loss carryforwards
Deductions pending application
Provisions and others
Net assets and liabilities
The Group has tax loss carryforwards for offset from
accrue. Most deductions were generated between
individual companies before they joined the conso-
2008 and 2013 and amount to Euros 4,733 thou-
lidated tax group, the amounts and reversal periods
sand, which are included in the Euros 1,488 thou-
of which are as follows:
sand recorded under assets on the consolidated
balance sheet.
THOUSANDS OF EUROS
YEAR
2014
2013
LAST YEAR
2000
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
109
1,700
1,573
494
1,244
1,524
433
31
394
303
2,021
1
5,014
109
1,998
1,573
-
1,227
1,467
432
30
394
302
2,021
-
-
2017
2019
2020
2022
2023
2022
2025
2026
2027
2028
2029
2030
2031
14,8419,553
In 2003- 2004, The Parent (Globalia Corporación
Empresarial, S.A.) and its subsidiaries Travelplán,
S.A.U., Air Europa Líneas Aéreas, S.A.U. and Viajes
Halcón, S.A.U. made outlays for advertising and marketing covering a period of several years as part of
the activity plans and programmes approved by the
Jacobean Council to celebrate the 2004 Jubilee Year,
giving rise to and applying the following income tax
deductions for that year.
Globalia Corporación Empresarial, S.A.
Euros 150 thousand
Air Europa Líneas Aéreas, S.A.U.
Euros 111 thousand
An amount of Euros 6,706 thousand (Euros 5,237
thousand in 2013) has been capitalised in respect
of these tax loss carryforwards. The Group also capitalised the entire amount of tax loss carryforwards
Viajes Halcón, S.A.U.
Euros 1,522 thousand
Travelplán, S.A.U.
Euros 577 thousand
calculated for 2012 for the consolidated tax group
in Spain. The tax loss carryforwards recognised at
In July 2005, the taxation authorities, through the
31 October 2014 amount to Euros 29,650 thousand
central management unit for large companies (Uni-
(Euros 43,029 thousand at 31 October 2013)
dad Central de Gestión de Grandes Empresas), notified the above companies that, among other things,
Deductions pending application expire within be-
they had been refused the right to apply the deduc-
tween five and 15 years from the year in which they
tion set forth in section of Two 1 (c) of the second
2014 Annual Report
69
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additional provision of Law 53/2002 to advertising
governing travel agencies. In accordance with account-
and marketing expenses for the period from 1 No-
ing regulations, the Parent applies the following crite-
vember 2003 to 31 October 2004, on the grounds
ria with respect to the aforementioned special regime:
that the application for recognition of the tax benefit
had been submitted after the deadline.
i) Input VAT on acquisitions of goods and services as
a part of transactions subject to the special regime in-
As they were not in agreement with the tenor of these
creases the amount of goods and services acquired.
rulings, the companies filed administrative appeals
which were overruled, first by the National Inspection
ii) Output VAT on transactions included in the spe-
Office and subsequently by the TEAC, forcing the enti-
cial regime is recognised together with income from
ties to file appeals for judicial review in order to have
the transaction.
their rights recognised. These were heard and favourable rulings dated 15 July 2010, 7 October 2010 and 28
iii) The VAT amount settled in accordance with
October 2010 were handed down by the Judicial Review
the special regime, that is, the VAT for which the
Chamber (second section) of the Spanish High Court.
taxable base is the Parent’s gross margin, is deducted from recorded income.
Specifically, in all cases, the Spanish High Court overruled the contested TEAC decisions, recognising
The Parent files consolidated tax returns for VAT with
the parties’ right to reimbursement of any excess
the aforementioned Globalia Group companies that
amounts paid, together with the corresponding late
compose the consolidated tax group for income tax,
payment interest.
except for Iberotours, S.A.U., Be Live Hotels, S.L.U.
and Globalia Travel Club Spain, S.L.U.
The amount pending collection on this account including late payment interest at 31 October 2012 is
tax assets in the consolidated balance sheet.
30) ENVIRONMENTAL
INFORMATION
b) VALUE ADDED TAX
Aware of the importance of the environment in sus-
Euros 3,406 thousand and is shown under current
Most transactions by the travel agency and tour op-
tainable development, in January 2006 Air Europa
erator divisions are subject to the special VAT regime
Líneas Aéreas,S.A.U. became the first Spanish airline
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to receive the ISO 14001 Environmental Management
tion of Directive 2008/101/EC of 19 November 2008.
Systems certificate. In 2012 reaffirming our commit-
It also complies with the requirements of the EMAS
ment to the environment, the Company was entered
Regulation (EC) No. 1221/2009, thus the Environ-
in the EMAS register. The Environmental Declaration
mental Declaration is audited annually.
is published on our website www.aireuropa.com.
The main aim of this system is to minimise the environmental impact of all activities, focusing on a
decrease in the consumption of natural resources,
31) RELATED PARTY BALANCES
AND TRANSACTIONS
correct waste management and the optimisation of
a) RELATED PARTY BALANCES
procedures to reduce both noise and C02 emissions.
Details of balances by category are as follows:
Reducing air pollution as much as possible
THOUSANDS OF EUROS
is a priority for the Company, as evidenced
by, among other actions, the effort and
major commitment the company has demonstrated by purchasing the most modern
OTHER RELATED
PARTIES
2014
TOTAL
397
397
Loans to companies
1,060
1,060
The main aim of the Environmental Man-
1,457
1,457
agement System is to implement the com-
Total assets
1,457
1,457
Suppliers
(83)
(83)
Total current liabilities (83)
(83)
aircraft, which unquestionably results in a
more efficient use of jet fuel.
pany’s Environmental Policy, ensuring its
compliance with prevailing environmental
legislation, managing environmental aspects, controlling indicators and fulfilling
Current trade receivables Current investments
the objectives proposed through continuous improvement.
OTHER RELATED
PARTIES
2013
The company has approved procedures
in place to guarantee compliance with
TOTAL
Loans to third parties
417
417
sion Decision 2007/589/EC of 18 July 2007
Total non-current assets
417
417
and Commission Decision 2009/339/EC of
Current investments
Loans to companies
2,513
2,513
2,513
2,513
2,930
2,930
the requirements established in Commis-
16 April 2009, which establish the guidelines for the monitoring and reporting of
greenhouse gas emissions, and are in line
with Law 1/2005 of 9 March 2005, which
Total assets
regulates the scheme for greenhouse gas
emission allowance trading. European Union Parliament and Council Directive 2003/87/EC of
13 October 2003, establishing the greenhouse gas
emission allowance trading scheme, was introduced
Current and non-current loans to companies in
2014 and 2013 are the loans explained in note 17
(a), granted by the Parent.
into Spanish law via Law 1/2005. Law 13/2010 of 5
July 2010 amends Law 1/2005 of 9 March 2005, perfecting and expanding the greenhouse gas emission
allowance trading scheme and including the aviation
industry in this scheme as a result of the publica-
2014 Annual Report
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b) GROUP RELATED PARTY TRANSACTIONS
c) INFORMATION ON THE
PARENT’S DIRECTORS AND
SENIOR MANAGEMENT
PERSONNEL
The Group’s transactions with related parties are as follows:
THOUSANDS OF EUROS
2014
DIRECTORS
SENIOR MANAGEMENT
PERSONNEL
OTHER RELATED
PARTIES
Information on remuneration is provided
TOTAL
in the preceding section. No advances or
loans have been extended to directors
Income
or senior management personnel.
Net sales
Sales
-
-
1,538
1,538
d) INVESTMENTS AND
Financial instruments -
-
39
39
POSITIONS HELD BY THE
Finance income
Total income
-
-
1,577
1,577
Expenses Net purchases (7,717)
(7,717)
Operating lease expenses
-
-
(3,523)
(3,523)
Personnel expenses Salaries
(1,737)
(1,446)
-
(3,183)
(311)
Allowances
(311)
-
-
Total expenses (2,048)
(1,446)
(11,240)
(14,734)
DIRECTORS OF THE PARENT
AND THEIR RELATED PARTIES IN OTHER COMPANIES
Details of investments held by the directors in companies with identical, similar
or complementary statutory activities to
that of the Parent and positions held as
well as functions and activities performed
in these companies are shown in Appendix XV, which forms an integral part of this
2013
DIRECTORS
SENIOR MANAGEMENT
PERSONNEL
OTHER RELATED
PARTIES
TOTAL
note to the consolidated annual accounts.
Income
Net sales 32)
Sales
-
-
2,576
2,576
Financial instruments Finance income
-
-
2,064
2,064
Total income
-
-
4,640
4,640
Expenses Operating lease expenses
-
-
(13,365)
(13,365)
Fixed asset purchases and
other services received
-
-
(49,368)
(49,368)
Personnel expenses Salaries
(3,071)
(1,402)
-
(4,473)
(309)
Allowances
(309)
-
-
Total expenses 3,380
(1,402)
(62,733)
a) REVENUES
Details of revenues by category of activity and geographical market are included
in Appendix XVI.
b) SUPPLIES
Details of merchandise, raw materials
and other supplies used are as follows:
(67,515)
Operating lease expenses reflect hotel operating
lease expenses and advisory fees for Caribbean hotel
properties operated by the Group for companies related to the Parent’s majority shareholder.
In 2013 expenses for fixed asset purchases and other services received mainly reflect the acquisition of
Hotel Be Live Canoa, S.A. (see note 5).
Transactions with related parties are carried out at
arm’s length.
72
INCOME AND
EXPENSES THOUSANDS OF EUROS
2014
2013
Merchandise used
Domestic purchases
1,529
1,575
Raw materials and other supplies used
Domestic and other purchases
1,152,724
Purchases of jet fuel
478,800
Change in inventories
-
1,101,327
431,921
2
1,631,524
1,533,250
1,633,053
1,534,825
back to index
c) EMPLOYEE BENEFITS
EXPENSE AND PROVISIONS
At year end the distribution by gender of personnel
is as follows:
Details of employee benefits
expense and provisions
are as follows:
Employee benefits expense
Social Security and other benefits
Provisions
Other
NUMBER
THOUSANDS OF EUROS
2014
94,673
-
94,673
2013
89,757
4
89,761
THOUSANDS OF EUROS
2014
(6,108)
(7,092)
(13,200)
2013
-
(560)
(560)
e) FOREIGN CURRENCY TRANSACTIONS
Details of income and expenses
denominated in foreign
2013
Consolidated companies
Male
Female
6,331
5,901
6,197
6,005
12,232
12,202
The distribution by gender of the Group’s directors
The average number of Group employees with a di-
Details of gains and losses
assets are as follows:
Losses
Intangible assets
2014
is five men and two women.
d) GAINS/LOSSES ON DISPOSAL
OF FIXED ASSETS
on the disposal of fixed
THOUSANDS OF EUROS
sability rating of 33% or higher (or equivalent local
rating) in 2014 and 2013, was 73 and 67, respectively.
34) AUDIT FEES
The auditors of the annual accounts of the Group
have invoiced the following fees and expenses for
professional services during the years ended 31 October 2014 and 2013:
THOUSANDS OF EUROS
currencies are as follows:
2014
2013
2014
2013
Income
Net sales
505,257
436,886
Audit services
293
280
Services rendered
10,212
13,295
Other audit services
12
Expenses
Other tax services
163
Net purchases
(317,486)
(286,439)
468
280
Operating lease expenses
(143,357)
(130,827)
Personnel expenses
(11,850)
(11,744)
Other services received
(173,350)
(154,447)
(130,574) (133,276)
Furthermore, other entities affiliated with KPMG In-
33) EMPLOYEE INFORMATION
The average headcount of the Group in 2014 and
2013, distributed by category,
ternational have invoiced the Group the following
fees for professional services during the years ended 31 October 2014 and 2013:
NUMBER
THOUSANDS OF EUROS
is as follows:
2014
2013
2014
2013
Consolidated companies
Audit services
82
65
Management
129
117
Middle management
344
332
Hotel personnel
2,105
2,260
Ground handling personnel
2,349 2,265
Fees and expenses for professional services rende Travel agency personnel
1,839 2,155
Pilots
556 461
red by other audit firms for the years ended 31 Oc Flight attendants
1,156 1,054
tober 2014 and 2013 are as follows:
Mechanics
330 286
Drivers
147 97
THOUSANDS OF EUROS
Other
83 165
IT programmers
122 122
2014
2013
Administration
353
281
Audit services
73
30
Other office personnel
1,586 1446
Call centre operators
220
325
11,319
11,367
2014 Annual Report
73
back to index
35) OTHER CONTINGENCIES
The Group is involved in legal proceedings with a
company with which it had entered into a collaboration agreement to extend its travel agency network,
and which has filed for insolvency. This company
lodged a claim for Euros 3,759 thousand in consequential damages and loss of profit, in light of the
rescission of the contract between the parties. On
12 February 2013 the Valencia Provincial Court
ruled against the Group, requiring it to pay the
specified amount to the claimant, plus 30% in interest and costs. The guarantees have been executed
and this amount has therefore been recognised in
the accompanying consolidated income statement.
However, the Company has filed an appeal against
the ruling with the Supreme Court, which has been
admitted for processing. As such, the amount is expected to be reduced in the final judgment and the
final figure adjusted accordingly.
The Group was involved in legal proceedings with a
supplier that lodged a claim for Euros 1,437 thousand
for an alleged breach of contract, and which has filed
for insolvency. On 17 February 2015 an agreement
was reached whereby the Group has undertaken to
pay Euros 425 thousand during the coming year.
The Group was involved in legal proceedings with a
customer claiming Euros 1,195 thousand in respect of
expenses incurred due to breach of contract and for
loss of profit. On 30 September 2014 an agreement
was reached with this customer whereby amounts of
Euros 175 thousand and Euros 425 thousand are to
be paid in the future in respect of hotel rooms.
The Group is involved in legal proceedings with a supplier that has lodged a claim for Euros 7,558 thousand
due to breach of contract. On 13 June 2013, the London Court of International Arbitration ruled in favour
of the Group, although the supplier has appealed this
Trade receivables include Euros 964 thousand reflecting an advance to suppliers, all forming part of
the same group, which were subsequently declared
insolvent. A guarantee has been deposited in favour
of the Group in respect of these advance payments.
This group’s insolvency administrators have confirmed that the suppliers are unable to honour the
obligations undertaken and the guarantee deposited by the defendant has therefore been executed.
However, the financial institution has not fulfilled its
obligation and the directors have therefore been
obliged to seek a court enforcement to execute the
guarantee. During the year, provision was made
for the balance receivable. However, at the date on
which these consolidated annual accounts were authorised for issue, negotiations were underway to
reach an agreement with the financial institution so
as to recover the majority of this balance.
Current investments include advances to suppliers
totalling Euros 1,510 thousand. Although these suppliers are undergoing insolvency proceedings, the
insolvency administrators have classified this debt
as having special preference, since it is secured by a
mortgaged property owned by the supplier. The directors have not recognised any impairment on this
receivable, as they expect to be able to execute the
mortgage guarantee and recover the loans.
The Group is involved in legal proceedings with a
debtor that is claiming a total of Euros 826 thousand
of principal plus interest and costs in connection
with a breach of contract, and an amount of Euros
701 thousand in respect of the settlement of invoices on rescission of the contract. On 1 October
2014 the Group filed its response to the lawsuit and
a counterclaim for Euros 649 thousand. The directors do not consider that any significant liabilities will
arise from these proceedings and therefore no provision has been made in this respect.
ruling. The Group’s external lawyers do not deem it
necessary for the Group’s legal advisory department
managing these proceedings consider the likelihood
36) EVENTS AFTER THE
REPORTING PERIOD
of the appeal being upheld against the Group to be
On 23 December 2014 Air Europa Líneas Aéreas,
less than 50%. As such, the directors have not recog-
S.A.U. entered into an agreement with Boeing, the air-
nised any provision for this item in the accompanying
craft manufacturer, to acquire 14 B787-9 aircraft to be
consolidated balance sheet.
delivered between February 2020 and October 2022.
to make any provision and the external legal advisers
74
back to index
APPENDIX 1
DETAILS OF INVESTMENTS IN SUBSIDIARIES FOR THE YEAR ENDED 31 OCTOBER 2014
Investment
Group company
holding the
interest
%
ownership
% effective
interest of
the Group
Thousands
of Euros
Globalia Corporación
Empresarial, S.A.
100
100
18,260
KPMG
Empresarial, S.A.
100
100
4,546
Ground handling
services
KPMG
Empresarial, S.A.
100
100
13,000
Palma de
Mallorca
Travel
agency
KPMG
Empresarial, S.A.
100
100
30,335
Palma de
Mallorca
Hotel
management
KPMG
Empresarial, S.A.
100
100
45,157
Globalia Lease Finance,
Limited (2)
Ireland
Aircraft
owner
KPMG
Empresarial, S.A.
100
100
1
Globalia Lease Finance
Two, Limited (2)
Ireland
Aircraft
owner
KPMG
Empresarial, S.A.
100
100
1
Three, Limited (2)
Ireland
Aircraft
owner
KPMG
Empresarial, S.A.
100
100
1
Four, Limited (2)
Ireland
Aircraft
owner
KPMG
Empresarial, S.A.
100
100
1
Five, Limited (2)
Ireland
Aircraft
owner
KPMG
Empresarial, S.A.
100
100
1
Six, Limited (2)
Ireland
Aircraft
owner
KPMG
Empresarial, S.A.
100
100
1
Globalia Servicios
Corporativos, S.L.U.
Palma de
Mallorca
General
services
KPMG
Empresarial, S.A.
100
100
1,083
Globalia Hotel
La Niña, S.L.
Palma de
Mallorca
Real
estate
KPMG
Empresarial, S.A.
99.99 100
19,047
Globalia Call Center,
S.A.U.
Palma de
Mallorca
Call
Centre
KPMG
Empresarial, S.A.
100
100
61
Welcome Incoming
Services, S.L.U.
Palma de
Mallorca
Incoming
services
KPMG
Empresarial, S.A.
100
100
10,727
Media & Design,
S.A.U.
Palma de
Mallorca
Communication
and advertising
-
Empresarial, S.A.
100
100
153
Globalia Gestión de
Seguros, S.L.U.
Palma de
Mallorca
Insurance
brokerage
-
Empresarial, S.A.
100
100
185
Globalia Hotel Talavera,
S.A.U.
Palma de
Mallorca
Hotel
owner
-
Empresarial, S.A.
100
100
3,462
Globalia Sistemas y
Comunicaciones, S.L.U.
Palma de
Mallorca
IT services
KPMG
Empresarial, S.A.
100
100
3,004
Registered
office
Activity
Auditor
Air Europa Líneas Aéreas,
S.A.U.
Palma de
Mallorca
Airline
company
KPMG
Globalia Business Travel,
S.A.U.
Palma de
Mallorca
Tour
operator
Globalia Handling,
S.A.U.
Palma de
Mallorca
Viajes Halcón,
S.A.U.
Be Live Hotels,
S.L.U. Company
(1) The company’s reporting date is at 31 December. (2) The company’s reporting date is at 30 June.
This appendix forms an integral part of note 4 to the consolidated financial statements,
in conjunction with which it should be read.
2014 Annual Report
75
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APPENDIX 1
Investment
Company
Registered
office
Activity
Auditor
Group company
holding the
interest
%
ownership
% effective
interest of
the Group
Thousands
of Euros
Globalia Formación,
S.L.U.
Palma de
Mallorca
Training
-
Empresarial, S.A.
100
100
670
Globalia Activos
Inmobiliarios, S.A.U.
Palma de
Mallorca
Real
estate
KPMG
Empresarial, S.A.
100
100
14,774
Pipa Holding,
B.V.
Holland
Holding
company
-
Empresarial, S.A.
100
100
55,811
Globalia Hotel Palace
de Muro, S.L.U.
Palma de
Mallorca
Hotel
owner
-
Empresarial, S.A.
100
100
26,697
Vizcaya
Tour
operator
KPMG
Empresarial, S.A.
100
100
649
Salamanca
Passenger
transport
KPMG
Empresarial, S.A.
90
90
1,661
Globalia Hotel Orotava,
S.L.U.
Tenerife
Hotel
owner
-
Empresarial, S.A.
100
100
13,434
Viajes Unalia,
S.A.U.
Madrid
Tour
operator
-
Empresarial, S.A.
100
100
63
Globalia Broker Services,
S.A.U.
Palma de
Mallorca
Aircraft
broker
-
Empresarial, S.A.
100
100
1205
Globalia Mantenimiento
Aeronaútico, S.L.U.
Palma de
Mallorca
Maintenance
KPMG
Empresarial, S.A.
100
100
3000
Globalia France,
S.A.S.
Paris
Travel
agency
Auditeurs &
Conseils Ass
Empresarial, S.A.
100
100
0
Pepeticket, S.A.
Palma de
Mallorca
Sales of
items
-
Empresarial, S.A.
51
51
27
Pepechofer, S.L.
Palma de
Mallorca
Travel
agency
-
Empresarial, S.A.
100
100
200
Marhandling, S.A.
Morocco
Ground handling
services
KMPG
Globalia Handling,
S.A.U.
100
100
3,246
Iberhandling, S.A.
Palma de
Mallorca
Ground handling
services
-
Globalia Handling,
S.A.U.
95
95
571
Halcon Viagens e
Turismo, Lda.
Lisbon
Travel
agency
KMPG
100
100
928
Geomoon, S.L.
Madrid
Travel agency
-
51
51
30
Luxembourg
Hotel management
-
Globalia Travel, B.V.
100
100
218
Viajes Ecuador,
S.A.U.
Vizcaya
Travel
agency
KPMG
Empresarial, S.A.
100
100
13,700
Globalia Artes
Gráficas, S.L.
Salamanca
Printing
KPMG
Viajes Halcón,
S.A.U.
100
100
1,730
Iberotours,
S.A.U.
Globalia Autocares,
S.A.
Intertravel, S.A.R.L.
76
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APPENDIX 1
Investment
Activity
Auditor
Group company
holding the
interest
Paris
Land transport
of goods and
passengers
Auditeurs &
Conseils Ass
Globalia
Autocares, S.A.U
100
100
-
Tenerife
Travel
agency
KPMG
Empresarial, S.A.
75
75
1,600
CH Marketing, Corp
Panama
Hotel management
-
Orlean, B.V.
100
100
-
Operadora Globalia de
México, S.R. de C.V.
Mexico
Hotel
operation
Baker Tilly
Mexico
Be Live
Hotels, S.L.
100
100
-
Orlean, B.V.
Holland
Holding of
securities portfolio
-
Be Live
Hotels, S.L.
100
100
10,759
Bajuba de México Consultores, S de R.L. de C.V.
Mexico
Rendering of
personnel services
Baker Tilly
Mexico
Media &
Design, S.A.
100
100
-
D & A Servicios Integrales, S.
de E.L. de C.V.
Mexico
Rendering of
personnel services
Baker Tilly
Mexico
Media &
Design, S.A.
100
100
-
Dominican
Republic
Hotel
operation
Urrutia
Liriano & Asoc.
Be Live
Hotels, S.L.
100
100
-
Globalia Travel, B.V.
Holland
Holding of
assets
-
Be Live
Hotels, S.L.
100
100
-
Globalia Trading Services,
S.L.U.
Palma de
Mallorca
Tour
operator
KPMG
Empresarial, S.A.
100
100
4
Groundforce Cargo,
S.L.U.
Palma de
Mallorca
Handling
KPMG
Globalia Handling,
S.A.U.
100
100
13,488
GlobaliaClub Spain,
S.L.U.
-
Tour
operator
KPMG
Empresarial, S.A.
100
100
180
Florida
Holding
of shares
-
Be Live
Hotels, S.L.
100
100
8
Smart Inversiones,
S.A.S.
Dominican
Republic
Hotel
operation
-
Orlean, B.V.
100
100
521
Inversiones
La Albufera, S.A.S.
Dominican
Republic
Hotel
operation
-
Orlean, B.V.
100
100
216
Inversiones
La Albufera, S.A.S.
Palma de
Mallorca
Passenger and
cargo air transport
-
Empresarial, S.A.
100
100
2,753
“Globalia Servicios Corporativos Dominicana, S.A. (1)”
Santo
Domingo
General
services
Urrutia Liriano
& Asoc.
Empresarial, S.A.
100
100
153
Punta
Cana
Hotel
owner
Urrutia Liriano
& Asoc.
Pipa
Holding, B.V
100
100
-
Santo
Domingo
Real
estate
Urrutia Liriano
& Asoc.
Pipa
Holding, B.V
100
100
-
Company
City Transfer,
S.A.S.
Globalia Hotels & Resort
Dominicana, S.A.
Be Live Trading,
INC
Inversiones Bávaro,
S.A.(1)
Inversiones Inmobiliarias
RCJ, S.A.(1)
Registered
office
%
ownership
% effective
interest of
the Group
Thousands
of Euros
2014 Annual Report
77
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APPENDIX 1
Investment
Company
Registered
office
Group company
holding the
interest
%
ownership
% effective
interest of
the Group
Thousands
of Euros
Activity
Auditor
Palma de
Mallorca
Imports
-
Empresarial, S.A.
100
100
1,503
Italy
Tour
operator
-
Empresarial, S.A.
100
100
-
Travelplán Portugal, Agencia
de Viagens e Turismo, Sociedade Unipessoal Lda.
Lisbon
Tour
operator
-
Empresarial, S.A.
100
100
-
Globalia Incoming Services
Mexico, S.R.L. de C.V.
Mexico
Incoming
services
Baker Tilly
Mexico
Welcome Incoming
Services, Slu
100
100
51
Globalia Incoming
Services Dominicana, S.A.
Dominican
Republic
Incoming
services
Urrutia Liriano
& Asoc. (R.D.)
Welcome Incoming
Services, Slu
100
100
22
See Europe Tours
Limited
United
Kingdom
Incoming
services
-
Welcome Incoming
Services, Slu
100
100
731
MK Media Corp.
United States
Tour operator
-
MK Tours, S.A.
100
100
1
MK Puerto Rico,
S.A.
United
States
Tour
operator
-
Travelplan Business,
S.A.U.
100
100
149
MK Tours, S.A.
United
States
Tour
operator
-
Travelplan Business,
S.A.U.
100
100
5,514
MK Tours Dominicana
USA INC.
United
States
Tour
operator
-
MK Tours,
S.A.
100
100
1
MK Travel &
Tours, INC
United
States
Tour
operator
-
MK Tours,
S.A.
100
100
1
Pony Express
Trust
United
States
Corporate
services
-
Air Europa Líneas
Aéreas, S.A.U.
100
Control
Sunion Proyectos y
Construcciones, S.L.U.
Spain
Corporate
services
-
Empresarial, S.A.
100
100
0
Canoa Spain, S.L.
Dominican
Republic
Hotel
business
-
Empresarial, S.A.
100
100
44,428
Hotel Canoa, S.A.
Spain
Hotel business
-
Canoa Spain, S.L.
100
100
17,771
Explotadora Hotelera
Luabay, S.L.U.
Spain
Hotel
business
KPMG
Luabay Hoteles y
Apartamentos, S.L.U.
100
100
Luabay Hoteles y
Spain
Hotel
business
-
Techite Inversiones
2012, Sl.U.
100
100
5,990
Inversiones Costa Adeje,
S.A.U.
Spain
Hotel
business
KPMG
Luabay Hoteles y
100
100
4,506
Techite Inversiones
2012,Sl.U.
Spain
Hotel
business
-
Empresarial, S.A.
100
100
7,003
Synergy Glb Comex,
S.L.U.
Travelplán Italia,
S.R.L.
3
78
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APPENDIX II
DETAILS OF INVESTMENTS IN NON-CONSOLIDATED SUBSIDIARIES
FOR THE YEAR ENDED 31 OCTOBER 2014
Ownership
Company
Globalia Tunesie,
S.A.R.L.
Registered
office
Activity
Tunisia
In liquidation
Thousands of euros
Group
company
%
ownership
Capital and
share premium
Reserves
Other
equity
Total
Empresarial, S.A.
100.00
(89)
(89)
(5,554)
(5,732)
APPENDIX III
DETAILS OF INTERESTS IN ASSOCIATES FOR THE YEAR ENDED 31 OCTOBER 2014
Ownership
Group
company
%
ownership
Effective %
ownership of
the Company
Amount of
interest
Unaudited
Globalia
Handling, S.A.U.
49.0
49.0
288
Unaudited
Viajes Halcón,
S.A.U.
40.0
40.0
(31)
Registered
office
Activity
Auditor
Maintenance of
Equipment on Tarmac
Service, S.A
Madrid
(Spain)
Maintenance
and Handling
Palacio de Congresos
de Tenerife Sur
Tenerife
(Spain)
Dormant
Name
APPENDIX IV
DETAILS OF INTERESTS IN JOINTLY CONTROLLED ENTITIES FOR THE YEAR ENDED 31 OCTOBER 2014
Ownership
Name
Registered
office
Activity
Auditor
Group
company
%
ownership
Effective %
ownership of
the Company
Amount of
interest
Mundo Social,
A.I.E
Balearic Islands
(Spain)
Travel
agency
Moya
Auditores
Viajes Halcón,
S.A.U.
50
50
1,046
Ocio y Turismo
Novotours, A.I.E.
Balearic Islands (Spain)
Travel
agency
Moya
Auditores
Viajes Halcón,
S.A.U.
50
50
313
2014 Annual Report
79
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APPENDIX V
INFORMATION RELATING TO JOINTLY CONTROLLED OPERATIONS FOR THE YEAR ENDED 31 OCTOBER 2014
Ownership
Group
company
%
ownership
% effective
interest of
the Group
Thousands
of Euros
KPMG, SL
Globalia
Handling, S.A.U.
68
68
13,192
Ground handling
services
KPMG, SL
Globalia
Handling, S.A.U.
95
100
8,645
Tenerife
(España)
Ground handling
services
KPMG, SL
Globalia
Handling, S.A.U.
80
80
1,134
Groundforce Tenerife Norte
temporary joint venture (UTE)
Tenerife
(Spain)
Ground handling
services
KPMG, SL
Globalia
Handling, S.A.U.
80
80
207
Groundforce Las Palmas
Las Palmas de
Gran Canaria
(Spain)
Ground handling
services
KPMG, SL
Globalia
Handling, S.A.U.
80
80
706
Groundforce Seville temporary
joint venture (UTE)
Sevilla
(Spain)
Ground handling
services
KPMG, SL
Globalia
Handling, S.A.U.
95
100
1,140
Groundforce Bilbao temporary
joint venture (UTE)
Bilbao
(Spain)
Ground handling
services
KPMG, SL
Globalia
Handling, S.A.U.
95
100
1,140
Iberia Globalia Cargo Bcn,
Barcelona
(Spain)
Freight
services
KPMG, SL
Globalia
Handling, S.A.U.
50
50
250
Monforte Castromil Globalia
Lugo
(Spain)
Airport passenger
transport services
-
Globalia
Autocares, S.A.
50
45
100
Globalia Monbús, temporary
joint venture (UTE)
Madrid
(Spain)
Airport passenger
transport services
-
Globalia
Autocares, S.A.
40
35
4
Globalia Chapin, temporary
joint venture (UTE)
Madrid
(Spain)
Airport passenger
transport services
-
Globalia
Autocares, S.A.
80
80
2
La Hispano, Monforte, Castromil,
Globalia temporary joint venture (UTE)
Madrid
(Spain)
Airport passenger
transport services
-
Globalia
Autocares, S.A.
45
45
36
Mombus Globalia Barcelona
Madrid
(Spain)
Airport passenger
transport services
-
Globalia
Autocares, S.A.
45
45
5
Ecuador GBT Air Europa Autocares
Mallorca
(Spain)
Airport passenger
transport services
-
Globalia
Autocares, S.A.
100
100
10
Mundosenior 2011-2012
temporary joint venture (UTE)(1)
Baleares
(Spain)
Travel
agency
-
Viajes Halcón,
S.A.U.
50
50
450
Halcón Monfobus Fisterra
A Coruña
(Spain)
Convention centre
management and
operation
Viajes Halcón,
S.A.U.
40
40
32
Passenger air
transport
Air Europa Líneas
Aéreas, S.A.U.
51
51
5
Registered
office
Activity
Auditor
Barcelona
(Spain)
Ground handling
services
Groundforce Madrid temporary
joint venture (UTE)
Madrid
(Spain)
Groundforce Tenerife temporary
joint venture (UTE)
Company
Groundforce Barcelona temporary
joint venture (UTE)
Air Europa Swiftair, temporary
joint venture (UTE)
(1) The company’s reporting date is at 31 August.
80
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APPENDIX VI
DETAILS OF EQUITY-ACCOUNTED INVESTEES BY COMPANY AND MOVEMENT
FOR THE YEAR ENDED 31 OCTOBER 2014 (EXPRESSED IN THOUSANDS OF EUROS)
Thousands of Euros
2014
Balance at 1
november 2013
Dividends
received
Maintenance of Equipment on Tarmac Service, S.A. 287
136
423
Palacio de Congresos Tenerife Sur (30)
-
(30)
257
136
393
Company
Balance at 31
october 2014
APPENDIX VII
CLASSIFICATION OF FINANCIAL ASSETS BY CATEGORY FOR THE YEAR ENDED 31 OCTOBER 2014
Thousands of Euros
Non-current
Current
At amortised cost or cost
Carrying amount
2014
Fair value
Total
Carrying amount
Fair value
Total
Assets held for trading
Enquity instruments
Quoted
-
-
-
200
200
200
Debt securities
Unquoted
-
-
-
55
55
55
-
-
-
4,694
4,694
4,694
-
-
-
Derivative financial instruments
Total
Loans and receivables
Loans, derivatives and other
Variable rate
Trade receivables
Total
1,134
95,766
-
-
96,900
1,134
95,766
-
-
1,134
95,766
-
-
96,900 96,900
4,949
1,378
67,621
222,917
21,936
313,852
4,9494,949
1,378
67,621
222,917
21,936
313,852313,852
Assets available for sale
Enquity instruments
Quoted
191
191
191
-
-
Total
191
191
191
-
-
97,091
97,091
97,091
318,801
318,801
1,378
67,621
222,917
21,936
-
318,801
2014 Annual Report
81
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APPENDIX VIII
CLASSIFICATION OF FINANCIAL ASSETS BY MATURITY FOR THE YEAR ENDED 31 OCTOBER 2014
Thousands of Euros
2014
2015
2019
Investments
Loans to third parties
1,378
-
-
-
Debt securities
55
-
-
-
Derivatives
4,694
-
-
-
67,621
60,553
11,335
4,760
Other investments -
-
-
-
-
-
-
3,307
-
1,134
-
-
15,811
191
(1,378)
(55)
(4,694)
(67,621)
-
1,134
95,766
191
Total
2017
Subsequent Less current Total nonyears
portion
current
2018
Trade receivables Other receivables
Personnel
2016
222,917
21,032
904
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(222,917)
(21,032)
(904)
-
318,601
60,553
11,335
4,760
3,307
17,136
(318,601)
97,091
APPENDIX IX
DETAILS OF RESERVES AND PROFIT AND LOSS AND MOVEMENT
FOR THE YEAR ENDED 31 OCTOBER 2014 (EXPRESSED IN THOUSANDS OF EUROS)
Legal and
statutory
reserve
Prior years’
losses
Voluntary
reserves
Reserves in
consolidated
companies
Reserves in
equity-accounted
investees
Total
3,379
(2,851)
99,998
21,775
(188)
122,113
-
-
-
485
-
485
3,379
(2,851)
99,998
22,260
(188)
122,598
Application of 2013 losses
Reserves
-
2,851
1,044
25,880
55
29,830
Changes in the
consolidated group
-
-
-
291
-
291
Other movements
-
-
(2,792)
2,792
-
-
3,379
-
98,250
51,223
(133)
152,719
Balance at
31 October 2013
Correction of errors
Adjusted balance at
1 November 2013
Balance at
31 October 2014
82
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APPENDIX X
DETAILS OF FINANCIAL LIABILITIES BY CATEGORY FOR THE YEAR ENDED 31 OCTOBER 2014
Thousand of Euros
2014
Non-Current
Current
Carrying amount
Fair value
Total
Carrying amount
Fair value
Total
Liabilities at fair value through
profit or loss
Derivative financial instruments
-
-
-
30,632
30,632
30,632
-
-
-
30,632
30,632
30,632
Debts and payables
Variable rate
29,308
29,308
29,308
14,541
14,541
14,541
95,016
3,493
95,016
3,493
95,016
3,493
14,713
22,083
14,713
22,083
14,713
22,083
Suppliers
Other payables
-
-
-
-
-
-
297,783
67,723
297,783
67,723
297,783
67,723
Hedging derivatives
Traded on organised markets
280
280
280
-
-
128,097
128,097
128,097
447,475
447,475
447,475
APPENDIX XI
CLASSIFICATION OF PAYABLES AND TRADE PAYABLES BY MATURITY
FOR THE YEARS ENDED 31 OCTOBER 2014 AND 2013
Thousands of Euros
2014
Subsequent Less current Total nonyears
portion
current
2015
2016
2017
2018
2019
Payables
Derivatives
14,541
14,713
30,632
22,083
5,847
12,820
-
-
5,072
12,671
-
-
3,930
12,887
-
-
3,959
13,264
-
-
10,500
43,374
280
3,493
(14,541)
(14,713)
(30,632)
(22,083)
29,308
95,016
280
3,493
Trade and other payables Suppliers
Advances from customers
Other payables
Personnel
297,783
21,683
18,381
27,659
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(297,783)
(21,683)
(18,381)
(27,659)
-
447,475
18,667
17,743
16,817
17,223
57,647
(447,475)
128,097
2014 Annual Report
83
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APPENDIX XII
MAIN CHARACTERISTICS OF PAYABLES FOR THE YEAR ENDED 31 OCTOBER 2014
Currency
Efective rate
Maturity
Credit facilities 1
Euros
Market
2015
5,000
134
Credit facilities 2
Euros
Market
2015
2,500
2,496
Credit facilities 3
Euros
Market
2021
3,790
535
2.647
Credit facilities 4
Euros
Market
2021
3,820
530
2.677
Other credit facilities
Euros
Market
2015
80,200
Total credit facilities
95,310
3,695
5,325
Type of debt
Nominal amount
Current
Non-current
Finance lease 1
Euros
Market
2016
-
135
145
Finance lease 2
Euros
Market
2017
-
1,020
664
Finance lease 3
Euros
Market
2014
-
2
Finance lease 4
USD
Market
2022
-
3,735
24,061
Finance lease 5
USD
Market
2022
-
3,768
25,625
Finance lease 6
USD
Market
2023
-
6,053
44,521
Total finance leases
14,713
95,016
Loans 1
Euros
Market
2015
-
3,892
Loans 2
Euros
Market
2016
-
1,865
Loans 3
Euros
Market
2015
132
Loans 4
Euros
Market
2014
48
Loans 5
Euros
Market
2024
-
1,240
10,733
Loans 6
Euros
Market
2016
-
205
86
Loans 7
Euros
Market
2021
-
1,688
9,957
Loans 8
Euros
Market
2017
-
1,560
2,730
Loans 9
Euros
Market
2015
-
204
Loans 10
Euros
Market
2015
12
Total loans
Collection management facilities
Total
10,84623,983
3,500
98,810 29,253124,323
84
477
back to index
APPENDIX XIII
RECONCILIATION BETWEEN NET INCOME AND EXPENSE FOR THE YEAR AND TAXABLE INCOME OF
THE SPANISH CONSOLIDATED TAX GROUP FOR THE YEAR ENDED 31 OCTOBER 2014
Thousands of Euros
2014
Consolidated income
statement
Increases
Decreases
Income and expense recognised
in consolidated equity
Net
Increases
Decreases
Net
Total
Consolidated income and
expense for the period
47,993
-
47,993
Income tax
9,662
-
9,662
57,655
-
57,655
Consolidated profit
before income tax
Permanent differences
Individual companies
17,676
4,431
13,245
-
-
-
13,245
Temporary differences:
Individual companies originating in
current year and prior years
25,099
6,290
18,809
-
-
-
18,809
Consolidation adjustments
originating in current year
-
29,649
(29,649)
-
-
-
(29,649)
Offset of tax loss carryforwards
-
15,015
(15,015)
-
-
-
(15,015)
45,045
-
45,045
Taxable income
APPENDIX XIV
DETAILS OF THE INCOME TAX EXPENSE/(INCOME) RELATED TO PROFIT/(LOSS) OF
THE CONSOLIDATED TAX GROUP IN SPAIN FOR THE YEAR ENDED 31 OCTOBER 2014
Thousands of Euros
Consolidated
profit and loss
Consolidated
equity
Total
Consolidated income and expense for the year before tax
57,655
-
57,655
Tax at 30%
17,297
-
17,297
Non-deductible expenses
Permanent differences
2,750
-
2,750
Consolidation adjustments
(8,963)
-
(8,963)
(401)
-
(401)
Previously unrecognised tax deductions applied
(1,019)
-
(1,019)
Consolidated income tax expense
From continuing operations
9,662
-
9,662
Previously unrecognised tax credits applied
2014 Annual Report
85
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APPENDIX XV
INVESTMENTS AND POSITIONS HELD BY DIRECTORS FOR THE YEAR ENDED 31 OCTOBER 2014
Director
Company
Statutory activity
Percentage
ownership
Position
and duties
D. Juan José Hidalgo Acera
Covilla, S.L.
Management of investments and real estate assets
80.00%
Sole director
Beach Resorts, S.L.
20.00%
Chairman of the board
Proyectos Caniquiqui S.L.U.
100.00%
Sole director
Proyectos Guadalobón S.L.U.
100.00%
Sole director
Proyectos El Ciprés S.L.U.
100.00%
Sole director
Proyectos Arroyo Vaquero S.L.U. Management of investments and real estate assets
100.00%
Sole director
JJH Activos Inmobiliarios S.L.U.
100.00%
Sole director
JJH Capital Inversiones
Exteriores S.L.U.
Management of investments and
real estate assets
100.00%
Sole
director
Desarrollo y Proyectos
Monterrubio S.L.
real estate assets
100.00%
-
Summa Real Estate 2007, S.L.
real estate assets
50.00%
Chairman of the
board of directors D. Juan José Hidalgo Acera
JJH Capital & Asset
Management S.L.U.
real estate assets
100%
Grupo Inmobiliario
Hidalgo&Rodríguez, S.L.
real estate assets
50.00%
Chairman of the
board of directors
Hipamasil, S.L.
44.00%
-
Dª. María José Hidalgo Gutiérrez
Covilla, S.L.
5.00%
-
Beach Resorts, S.L.
real estate assets
20.00%
Vice-chairman of
the board
Visit USA S.L.
Incoming travel agency
50.00%
-
Corporación Inmobiliaria
Iberobalear S.L.
real estate assets
33.33%
Member of
the board
El Salado Resorts S.L.
30.00%
Member of the board
Inblue Hotels&Resorts, S.L.
30.00%
Member of the board
D. Francisco Javier Hidalgo Gutiérrez
Covilla, S.L.
5.00%
-
Beach Resorts, S.L.
20.00%
Member of the board
MCJ Inversiones S.L.
Management of investments and real estate assets 33.33%
Joint director
Dª. Cristina Hidalgo Gutiérrez
Covilla, S.L.
5.00%
-
Beach Resorts, S.L.
20.00%
Member of the board
MCJ Inversiones, S.L.
Management of investments and real estate assets 33.33%
Joint and several manager
Sra. Avelina Gutiérrez Saiz
Covilla, S.L.
5.00%
-
Sra. Avelina Gutiérrez Saiz
Beach Resorts, S.L.
20.00%
Member of the board
D. Abel Matutes Juan
Fiesta Hotels & Resort, S.L.
Hotel activity
-
Chairman
FST Hotels, S.L.
Hotel activity
-
Chairman
Balearia Eurolíneas Marítimas, S.A.
Sea transport
-
Member of the board
Residencial Marina, S.L.
Hotel activity
43.98%
Member of the board
86
Sole
director
back to index
APPENDIX XVI
DETAILS OF REVENUES BY CATEGORY OF ACTIVITY AND GEOGRAPHICAL MARKET
FOR THE YEARS ENDED 31 OCTOBER 2014 AND 2013
Rest of European
Union
National
America
Other
Total
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
474,186
421,812
370,059
329,185
627,793
558,453
95,792
85,212
1,567,830
1,394,662
Travel agency division
1,130,697
1,062,434
34,356
33,692
-
-
-
-
1,165,053
1,096,126
Tour operator division
265,047
245,359
11,754
13,872
11,652
12,484
-
-
288,453
271,715
51,387
42,739
-
-
65,686
72,115
-
-
117,073
114,854
Handling division and other 153,865
154,657
-
-
9,448
2,157
2,376
4,176
153,865
169,714
Air division
Hotel division
2,075,1821,927,001 416,169376,749705,131 645,209 95,79289,3883,292,274
3,047,071
2014 Annual Report
87
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DIRECTOR’S REPORT
1. INTRODUCTION
1.1 The global economy
Following several very difficult years, levels of confidence in economic recovery are higher in 2015 than
in prior years. This was due to three major factors:
an improvement in macroeconomic conditions in
most countries, above all in the US; an improvement
in confidence with regard to the risks that have affected financial markets and global financial stability,
and expansive monetary policies being applied in developed countries.
1.2 Euro Zone
The outlook of a slow recovery in the Euro Zone as a
whole has been confirmed. In addition, the decision
to create a banking union is starting to take the form
of concrete action, which should help to shore up
the recovery in this economic area and reduce the
financial fragmentation between the peripheral and
core countries of the region. Peripheral countries
have continued to make efforts to improve their
processes of fiscal consolidation and redress macroeconomic imbalances. Little by little, international
investors are again considering these countries at-
have cushioned much of the social impact of this
high level of unemployment.
The challenge from now on is to sustain confidence
with regard to financial markets that the country will
fulfil its commitment to fiscal consolidation, driving
a sound economic recovery which we expect to be
confirmed in 2015.
1.3 Spanish economy
2. INTERNATIONAL SCENARIO
IN WHICH THE GROUP HAS
CARRIED OUT ITS ACTIVITY
The global crisis that started in 2008 had a direct im-
2.1 Euro-Dollar exchange rates
pact on the performance of the Spanish economy,
The impact of fluctuations in the Euro-US Dollar ex-
as well as revealing internal imbalances. As a result,
change rate is highly significant for the Group, as
Spain saw its Gross Domestic Product contract sig-
almost all of its aircraft lease costs and engine and
nificantly, reflecting plummeting domestic consum-
spare part expenses are denominated in US Dollars,
er and government spending and a significant drop
as well as the costs of insurance and jet fuel.
tractive investments in terms of risk-reward..
in investment by companies and governments. In
2014 Spain was able to consolidate the tentative
The average Euro-Dollar exchange rates for the past
signs of recovery first seen in late 2013. Although
five years were as follows:
more progress must be made, especially in terms
of employment, the country’s macroeconomic situation is improving on past years. Unemployment in
Spain remains high, although as previously mentioned, it has stabilised, and in 2014 net job creation was positive. Ongoing welfare measures, more
closely knit families than average for Europe and
the survival of some degree of shadow economy
88
Year
US Dollar-Euro
2010
1.349
2011
1.393
2012
1.292
2013
1.318
2014
1.349
back to index
The average monthly exchange rates in 2014 and
Variations in average monthly basic jet fuel prices
2013 were as follows:
during 2014 compared to the prior two years are as
US DOLLAR-EURO
follows:
US DOLLAR/TONNE
20142013
November
1.349
1.283
December
1.370
1.312
January
1.361
1.329
November
February
1.366
1.336
December
Year
2014
Year
2013
Year
2012
983.11
1,014.46
1,038.89
1,013.31
1,010.33
986.48
981.67
1,040.71
1,020.20
March
1.382
1.296
January
April
1.381
1.303
February
983.89
1,082.33
1,064.06
May
1.373
1.298
March
959.96
991.84
1,096.30
June
1.359
1.319
April
962.75
927.38
1,076.89
July
1.354
1.308
May
967.23
922.43
1,007.66
August
1.332
1.331
June
978.19
941.25
896.75
September
1.290
1.335
July
965.85
975.72
955.61
October
1.267
1.364
August
945.19
1,002.99
1,049.85
September
902.51
1,001.70
1,073.36
October
831.48
994.50
1,052.54
Average for the year 956.26
992.13
1,026.55
Average for the year
1.349
1.318
On average, the US Dollar has dropped by 2% against
the Euro in the year in comparison to the prior year.
However, the trend changed in the last few months
The trend in average basic jet fuel prices in 2014 was
of 2014, with the US Dollar rising against the Euro.
relatively stable in comparison to the prior year until
August, when it abandoned the rises of prior years, re-
2.2 Jet fuel prices
Average basic jet fuel prices (CIF Northwest Europe
sulting in a 3.61% year-on-year drop on the prior year.
Cargoes market) for the past five years were as follows:
Year
US Dollar/tonne
2010
701.80
2011
980.24
2012
1,026.55
2013
992.13
2014
956.26
3. GROUP BUSINESS PERFORMANCE DURING THE YEAR
3.1 Air division
The average number of aircraft in service during the
year compared to the prior year is as follows:
AVERAGE NUMBER OF AIRCRAFT
Fleet
2014
2013
Embraer 195
11.00
11.00
Boeing 737 - 800
19.87
18.65
Airbus 330 - 200
11.61
10.50
Airbus 330-300
2.00
0.78
44.48
40.93
The first Embraer 195 was added to the fleet in 2009,
with the aim of providing the Division with an aircraft with a lower capacity and operating costs, which
2014 Annual Report
89
back to index
Below we list the number of seats for sale, the number of passengers carried and the resulting load
factor for scheduled flights in 2014 compared with
prior years:
Year/Market
AKO ‘000
PKT ‘000
% Load
Factor
Balearic Islands
843,934.00
672,547.00
79.7%
4,391,165.00
3,741,849.00
85.2%
Canary Islands
Domestic
International
TOTAL 2012
316,740.00
234,426.00
74.0%
14,310,861.00
11,585,203.00
81.0%
19,862,700.00 16,234,025.00
81,7%
Percentage variation
-4.3%
-0.7%
3.0%
794,357
662,677
83.4%
4,071,162
3,501,756
86.0%
502,679
347,082
69.0%
15,576,543
13,188,915
84.7%
20,944,740.27 17,700,430.02
84.5%
Balearic Islands
is better suited to medium to low traffic domestic
Canary Islands
and European routes. It is a modern design 120-seat
Domestic
aircraft, which meets the highest technological stan-
International
dards in the industry, providing Air Europa with grea-
TOTAL 2013
ter operating versatility.
The flight hours in 2014 compared to the two previous years were as follows:
5.4%
9.0%
2.8%
869,023
716,160
82.4%
3,967,076
3,342,756
84.3%
814,086
536,959
66.0%
18,835,766
15,919,570
84.5%
24,485,950.57 20,515,445.60
83.8%
Balearic Islands
Canary Islands
Domestic
International
TOTAL 2014
FLIGHT HOURS
16.9%
15.9%
-0.9%
Fleet
2014
2013
2012
Embraer 195
29,963
24,220
24,798
Boeing 737-800
69,894
68,811
68,062
As shown, there were increases on the prior year in avai-
Airbus 320-200/300
72,102
63,478
58,391
lable seat kilometres (ASK) by 16.9% and in passenger
171,959156,509151,251
kilometres travelled (PKT) by 15.9%. The load factor was
down 0.9% on the prior year, although the Company’s
load factor has been high for several years now.
The total number of passengers (charter and scheduled flights) carried by the Group’s Air Division over
The number of employees of the Air Division over
the past five years has been as follows:
the past five years, not including personnel corresponding to the Group’s airport handling conces-
Number of passengers
carried
Fleet
2010
8,866,165
2011
8,744,512
2012
8,114,059
2013
8,690,044
2014
9,586,044
sions, was as follows:
AVERAGE HEADCOUNT
Direct employees
Indirect employees
As shown, the number of passengers carried in 2014 increased by 10.3% compared to the prior year.
90
Own ground
handling division
Total
2014
2013
2012
2011
2010
2,043
1,822
1,797
1,828
1,825
749
672
687
797
705
2,791
2,494
2,484
2,625
2,531
277
252
271
367
384
3,0682,7462,7552,9922,915
back to index
3.2 Tour operator division
3.3 Incoming division
The Tour Operator Division has felt the effects of the
The Globalia Group Incoming Division was set up in
slump in Spain’s domestic consumer spending, but
November 2010 under the “Welcome Incoming Ser-
sales have begun to recover in 2014 and demand for
vices” brand, and its economic activity centres mainly
Latitudes branded products in the exclusive holiday
on the provision of excursions and transfer services,
package market is also worthy of note. The Division
hotel reservations and car hire. Its main supplier is
has continued with its drive to consolidate traditio-
the Globalia Group Tour Operator Division.
nal areas of the tour operator market, concentrating particularly on the launch of new middle- and
The second phase of its implementation saw the in-
long-distance destinations in conjunction with the
troduction of an online hotel accommodation sales
Group’s Air Division, with a view to strengthening its
platform, “WELCOMEBEDS”, which provides services
position in those market segments.
to third parties, travel agencies and tour operators
with no geographic restrictions, but with a focus on
The Division has made considerable advances in and
markets where our incoming operations have a phy-
consolidated its E-Commerce B2B business over re-
sical presence.
cent years, via the incorporation of new technologies
developed by the Group’s systems department. Par-
The average number of employees in this Division
ticularly noteworthy is the new Online sales system
since 2010 has been as follows:
linked to the Group operating system, the implementation of which has facilitated and increased the agility and effectiveness of its reservations management
system, and permitted interconnection with the different Group and independent travel agents. As a result, approximately 90% of travel agent reservations
are made automatically via this channel, with no need
for any telephone contact or other communication.
Average
Headcount
Year
2010
2011
2012
2013
2014
156
204
238
210
211
The number of passengers carried by the Division in
3.4 Travel agency division
2014 and the four prior years is as follows:
In a context of declining travel demand in the Spanish and Portuguese markets, the Travel Agency Di-
Year Passengers
vision has continued to adapt to the market, redu-
cing the number of own offices open to the public by
2010
2011
2012
2013
2014
1,355,018
1,096,705
903,082
585,860
531,411
The preceding passenger figures do not include customers of the Division’s incoming area since 2011.
Aggregate revenues of the Tour Operator Division
over the last five years are as follows:
closing those that were not contributing positively to
the Group’s consolidated income statement.
On the other hand, the Division has continued with
the franchising process, with a significant increase in
the number of offices operated in this way.
The Division has continued to promote its E. Commerce B2C business line, under the halconviajes.
com, viajesecuador.com and tubillete.com brands,
Year
Millions of Euros
assigning new technical and human resources to
2010
2011
2012
2013
2014
735
648
545
588
591
The high level of technological development and
this priority development area.
internal control in the Division, the strength of its
brands and the maturity of its professionals are all
2014 Annual Report
91
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cause for confidence in the future attainment of its
The number of offices open to the public in the “offli-
business objectives.
ne” travel agency sector in Spain and Portugal has fa-
llen significantly this year, in a trend that has mainly
The number of offices (both own offices and fran-
affected the independent travel agency segment.
chises) operating at the end of each of the last five
years was as follows:
The average number of employees of the main company in the Travel Agency Division, Viajes Halcón, S.A.U. over the last five years is as follows:
Year
Viajes
Halcón, S.A.
Grupo Viajes
Ecuador
Halcon Viagens
e Turismo, Lda
Total
2010
937
376
108
1,421
2011
967
328
98
1,393
2012
941
294
79
1,314
2013
799
246
68
1,113
2014
813
239
64
1,116
Year
Average number
of employees
%
increase
2010
2,311
-5%
2011
2,250
-3%
2012
2,139
-5%
2013
1,834
-14%
2014
1,507
-18%
Revenue in the Travel Agency Division over the last
five years is as follows:
MILLIONS OF EUROS
Year
Viajes
Halcón, S.A.
Grupo Viajes
Ecuador
Halcon Viagens
e Turismo, Lda
Total
2010
961
209
59
1,229
2011
1,018
201
46
1,265
2012
930
169
35
1,134
2013
859
148
34
1,041
2014
917
142
34
1,093
3.5 Hotel division
The number of rooms and hotels operated by the Division at the end of the last two years was as follows:
Spain
Mediterranean
Rooms Hotels
Dominican
Republic
Cuba
Total
2014
2013
2014
2013
2014
2013
2014
2013
5,227
5,369
2,740
2,728
416
416
8,383
8,513
21
22
6
7
2
2
29
31
Occupancy and average prices have remained high in
3.6 Handling division
hotels currently in operation, in spite of the current crisis.
In 2014, the Group continued with its policy of consolidating the Handling division, having obtained almost
Group Management implemented specific measures
full coverage of operations at Spanish airports since
in previous years to strengthen its hotel management
1997. The Division’s handling operating hubs in Spain
system and support the Divisional sales team.
are as follows:
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5. RISK MANAGEMENT
AUTOHANDLING
GROUNDFORCE
Palma de Mallorca
Oviedo
Ibiza
La Coruña
Málaga
Valencia
Santiago
Madrid
Tenerife Norte
Tenerife Sur
Sevilla
Bilbao
Barcelona
Las Palmas
The Company’s activities are exposed to various financial risks: market risk, credit risk, liquidity risk and
interest rate risk in cash flows. The global risk management programme of the Globalia Group, which
includes the Company, focuses on uncertainty in the
financial markets and aims to minimise potential adverse effects on the Company’s profits.
The Company, which is the head of the Globalia
Group’s Air Division, implements its risk manage-
Over the last five years, the level of autonomy of the
Air Division with respect to Handling services has developed as follows:
ment policy as a whole, which can be summarised
as follows:
1- Market risk. The Company has diversified market risk by increasing its international presence,
thereby reducing the impact of domestic de-
% Handling operations
carried out in Spanish
airports by the Group’s
own Handling Division
Total number of
handling operations
carried out by the own
Handling Division
2010
90.96%
49,511
2011
91.91%
51,085
2012
91.72%
41,831
2013
92.07%
47,254
2014
91.26%
55,279
mand on its business.
2- Risks arising from exchange rate fluctuations.
Risks arising from exchange rate fluctuations are
hedged through the hedging contracts the Company has with its subsidiaries.
3- Risks arising from variations in fuel prices. The Air
Division has a hedging policy for fluctuations in
fuel prices, to hedge the price of part of the fuel
consumed by its aircraft, which is managed by
Group Management.
4- Liquidity risks. Globalia is an integrated transport,
Apart from Air Europa, Groundforce clients including
leading airlines such as Air France, KLM, British Airways, Iberia, United, Alitalia, Air Berlin, Vueling, etc.
travel and tourism group with a number of lines
of business (air transport, tour operators and
travel agents, passenger ground handling service, hospitality, etc). The Parent, as the head of
the Group, manages all of the cash generated
4. PROFIT FOR THE YEAR AND
CONCLUSIONS
by Group companies to cover potential liquidity
risks resulting from the various business cycles of
the entities forming part of the Group.
The Group’s consolidated revenue totalled Euros
3,292.27 million, up 8% on the Euros 3,047.07 million obtained in 2013.
6. OTHER
The Company does not hold own shares or equity
Consolidated profit after tax amounted to Euros 27.9
holdings or shares in the Parent. No research or de-
million in 2014, compared to consolidated profit of
velopment activity was conducted during 2014, al-
Euros 30.1 million in the previous year.
though certain Group companies have undertaken
technological innovation projects. No events have
Particularly worthy of note is the restructuring of the
taken place after the end of the reporting period
Group’s Travel Agency Division, and the generalised
which have not been mentioned in the attached
effort to improve the efficiency of operations man-
notes which could have a significant effect on the
aged by the various lines of business of the Group.
annual accounts for 2014.
2014 Annual Report
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CORPORATE SOCIAL
RESPONSIBILITY REPORT
Grupo Globalia continues to develop
and reaffirm its commitment to its
CSR values. We have consolidated the
projects we began in prior years, and
have total confidence in them and
their results.
The Group’s Management, always conscious of its commitment to its clients
and the environment, has established
the general objective of implementing and maintaining a Quality and
Environment Management System
based on sustainability, ongoing improvements, customer satisfaction and
the participation of all employees. The
purpose is to obtain outside recognition of Grupo Globalia’s efforts, not
only from the perspective of the service, but also from
SOCIAL RESPONSIBILITY
that of ongoing improvement in working methods,
Globalia is committed to promoting social respon-
customer service and respect for the environment.
sibility:
1.- Globalia offers health and safety in the workplace,
All the initiatives started in 2014 can be classified
into two main areas: environmental measures and
social measures.
motivating working conditions, which are in line
with all legislation in force.
2.- At Globalia, we are committed to internal promotion and to ensuring equal opportunities for our
employees.
ENVIRONMENT
3.- We undertake to respect all employment legis-
Globalia is committed to sustainable economic pros-
lation where we operate, and demand that our
perity and has therefore established the following
suppliers and subcontractors follow our princi-
principles:
ples and do the same.
1.- We are responsible for our financial results and
guarantee the transparency of the information
we provide.
DECLARATION OF INTENTIONS
2.- We associate with local, national and internation-
1.- We use all the resources necessary to guaran-
al organisations, to help to build and strengthen
tee that the service we offer is safe, reliable and
the communities we serve, by creating employ-
strictly fulfils all the specifications in the area of
ment and economic growth.
quality (Standard OPS1 1.035, EASA Parte M. A.
3.- We act with integrity and put every effort into
earning the trust of our customers.
712 and UNE-EN-ISO 9001:2008), as well as the
rest of the regulations applicable in the sector
4.- Globalia sets operational security and quality
(OPS1, EASA, IATA, OACI, etc.) and in respect of
among its highest priorities within the company
the environment (UNE-EN-ISO 14001:2004 and
culture.
the applicable legal requirements).
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2.- We develop programmes to improve our processes and services, as well as our customer ser-
http://www.aireuropa.com/waeam/es/estaticos/informacion/calidad.html
vice, always in pursuit of customer satisfaction
and taking into account the quality-price ratio.
Aware of society’s growing concern for the environ-
3.- We ensure that quality, ongoing improvement
ment, and far ahead of all other Spanish airlines,
and pollution prevention are basic elements in
Air Europa obtained certification ISO 14001:2004
the company culture.
for Environmental Management Systems in January
4.- We establish actions and programmes oriented
to the prevention, and not just the detection, of
2006, supported by its existing Quality Management
System, certified since 2001.
problems. We make sure that the pollution that
might be caused by our activities is minimal, by
The fundamental objective of this system is to mini-
identifying, checking and controlling all the relat-
mise the environmental effects of the company’s
ed environmental aspects.
activities, with the main focus placed on reducing
5.- We continuously improve our environmental poli-
consumption of natural resources (paper, water,
cies and the efficiency of our processes by regu-
electricity, fuel, etc), proper waste management (re-
larly planning our objectives.
covery, reuse and recycling, etc), and the optimisa-
6.- We establish ongoing training programmes to ensure that our employees are highly qualified to
tion of procedures for reducing noise pollution and
CO2 emissions from aeroplanes.
perform the activities that fall within the purview
of the Quality and Environment System.
We have made significant investments in CO2-reduc-
7.- We are constantly in contact with our clients, to
ing technologies, installing winglets in the B737-800
continuously improve the service we provide and
fleet aircraft that have a compatible design. These
evaluate their degree of satisfaction with our
aerodynamically efficient devices, situated at the
company.
ends of the wings, have allowed us to reduce CO2
8.- We optimise Air Europa’s global business using a
strategy oriented to attain and maintain leader-
emissions by 2.5% in respect of the aeroplanes that
do not have them.
ship in the sector.
Within Air Europa’s Quality and Environment
System, the Directors establish the plans and resources required to achieve the objectives set by
the Quality and Environment Committee.
The Quality Manual is the document that sets out
the philosophy and guidelines of the Quality System. All Air Europa employees are obliged to read
and implement the Manual.
AIR EUROPA MAINTAINS ITS EMAS
CERTIFICATION
Air Europa has an Environmental Declaration, issued in Palma de Mallorca on 30 June 2014, validated through the provisions of article 4 of EC
Regulation No. 1221/2009 by the Spanish Standardisation and Certification Association (AENOR).
The Environmental Declaration is published on our
website (see the following link):
2014 Annual Report
95
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ous humanitarian supplies, which
would be impossible without Air
Europa’s generous collaboration,
as the airline fills the holds of its aircraft with boxes of clothes, shoes,
books, medicine, etc.
AEA Solidaria raises funds and selects the items that each home
most needs, taking them directly to
the homes in person. Our co-workers do not just deliver the materials, but also visit each of the homes
frequently, to check to see what
they need, and spend time with the
children at each of the destinations
(Santo Domingo and Bolivia).
SOLIDARITY
AEA Solidaria has a key co-operator in Santo Do-
Air Europa’s 2014 Corporate Social Responsibility
mingo, Be Live Hotels. The Be Live Hamaca Hotel
Report documents the initiatives, achievements and
continues to cooperate regularly with weekly deliv-
results of our corporate activities focused on fulfill-
eries of food to the Pasitos de Jesús Foster Home.
ing the Ten Principles of the Global Compact.
The Hamaca Hotel, which is committed to the cause
and project of AEA Solidaria, helps our co-workers
Our lines of cooperation with social organisations
out daily, with the distribution of humanitarian assis-
and NGOs are based on international cooperation
tance and various initiatives in the hotel installations.
and a firm commitment to the needs identified in
our society, ensuring that our social ethos translates
In October, AEA Solidaria delivered a wheelchair as
into actual tangible results.
part of a donation to a young girl living in Boca Chica,
Santo Domingo.
In 2014, we increased our social responsibility initiatives, cooperating with different organisations. A
To try to make October as comfortable a month as
notable highlight is the collaboration of the airline’s
possible, AEA Solidaria also delivered sports uni-
personnel with the AEA Solidaria association, cre-
forms to each and every one of the children in the
ated by a group of company employees with man-
Santa Cruz Home in Bolivia.
agement’s support. AEA Solidaria has continued
cooperating in the projects already begun, without
AEA Solidaria has raised funds by arranging Charity
neglecting the new social challenges, both national
Breakfasts every first Tuesday of the months at the
and international, for the fourth consecutive year.
Globalia building installations in Llucmajor and the
brand offices in the Adolfo Suarez Madrid Barajas
In Bolivia, the association runs the children’s homes
Airport. It recently implemented a new way of mak-
Niños de Santa Cruz and Virgen de Fátima, and in
ing donations to make it easier for all Globalia em-
the Dominican Republic, the care centre Pasitos de
ployees to cooperate.
Jesús.
The 2013 report documents the support provided
SANTA CLAUS IN SANTO DOMINGO
to these projects. AEA Solidaria provides significant
This was doubtlessly the most important project of
assistance in each of the homes, contributing vari-
the latest few months, in which AEA Solidaria invest-
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ed a lot of time and effort. The initiative began with
RETAIL DIVISION
Air Europa flight UX089 with destination Santo Do-
Our commitment to a quality service and respect for
mingo on 16 December. Santa Claus surprised the
the environment has led us to implement an inte-
youngest passengers and gave them presents with
grated management system in the corporate areas
his best wishes for Christmas.
of Viajes Halcón and Viajes Ecuador under Standards ISO 9001 and 14001, which was certified by Bu-
Santa Clause arrived in Santo Domingo and con-
reau Veritas in 2010, including the departments of
tinuing with his work, on 17 December he gave out
Companies, Public Tenders and Event.
many presents in the Be Live Hamaca Hotel to the
children from the most deprived neighbourhoods of
Since its implementation, the integrated system has
Boca Chica, during a party especially held for them.
been contributing to the ongoing improvement of our
Naturally, Santa Claus did not leave the island before
processes, helping us meet the expectations of our cli-
visiting the girls in the Pasitos de Jesús Care Home.
ents with all our efforts, whilst maximising the efforts of
the whole human team to reach common objectives.
Please visit the following link to see photos of Santa
Claus’ visit:
With regard to the preservation of our environment,
https://www.youtube.com/watch?v=wkkTDoBvehs&f
the implemented system promotes the improve-
eature=share
ment of environmental performance, setting the
objective of ensuring that the activities engaged in
“The greatest thing to see is man battling adversity;
by our organisation are always respectful to the en-
but there is something even greater: to see another
vironment and cause the minimum impact possible.
man coming to his assistance”.
In 2013, we renewed our three-year certification, far
exceeding the goals we had set.
ORGANISATIONS WITH WHICH WE COOPERATE
Globalia CSR Department.
Our lines of cooperation with associations and NGOs
are based on international cooperation and our firm
commitment to the needs identified in our society, to
ensure that our social ethos translates into real tangible results, in the different areas in which we work.
During this year, we have cooperated by starting or
renewing cooperation agreements with the following organisations:
Acoger y Compartir - Ariños da Terra - Una Sonrisa para Aitana - Asociación Alba Pérez - ASPADO
- BUSF - CODESPA - Comedor Social Ventas - Cruz
Roja - Fundación Cirujanos Plásticos Mundi - Fundación Amazonia - Fundación Deporte Joven - Fundación El Larguero - Fundación Integra - Fundación
LQDVI - Fundación Pequeño Deseo - Fundación Real
Mallorca - Fundación Respiralia - Fundación Ardilla
-Infancias Sin Fronteras - Make a Wish Spain - Fundación Mensajeros de la Paz - Fundación Nuevo Futuro - ONG DOA Médicos - UNICEF - AFA - Fundación
UNES - Despegando CAPACIDADES - Es Refugi - Projecte Home - Fundación Rana - Clínica Universidad
de Navarra - World Soccer Foundation.
2014 Annual Report
97
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Anual report 2014

Transcription

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