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Fiji Airways Sets New Profit Record

August 20, 2015 Financial No Comments Print Print Email Email

Fiji Airways has set a new profit record for the first six months of 2015, reporting an operating profit before tax of $17.5 m from January 1st to June 30th.

The result constitutes a solid improvement on the national airline’s profit of $15.4 for the same period last year and is the highest six-monthly result in the company’s history.

The unaudited interim result represents the earnings of the Fiji Airways Group, legally known as Air Pacific Limited, which comprises Fiji Airways (Fiji’s National Airline), its subsidiaries Fiji Airlines Limited (trading as Fiji Link) and Pacific Call Comm Ltd, plus a 38.75 per cent stake in Richmond Limited, owners of the Sofitel Fiji Resort and Spa on Denarau Island.

The Chairman of Fiji Airways, Nalin Patel, commended staff for what he described as “yet another outstanding performance” for the first half of 2015, on the back of a record profit of $60.8m for the 2014 financial year. But he said no-one at Fiji Airways could afford to be complacent if the airline was to equal or better last year’s result and he urged management and staff to remain focussed.http://www.deevanagroup.com/home.html

“The key driver of our underlying profitability was a 6.7% increase in passenger numbers for the first six months of the year and a 4.7% increase in our overall revenue. While there is no room for complacency, we are seeing some excellent results from the financial growth plan that Fiji Airways has had in place since last year, with its emphasis on strong fiscal discipline and continuously improving efficiencies. With strong support from our staff and shareholders, management has been able to make sound financial and commercial decisions that are benefitting our people, the tourism industry and the entire Fijian economy”, Mr Patel said.

The result was warmly welcomed by the Attorney General and Minister for Aviation, Aiyaz Sayed-Khaiyum, who said it laid a solid foundation for the airline’s future growth, including new routes and new aircraft.

“As the airline’s majority shareholder, the Fijian Government is delighted by the strong performance of Fiji Airways and the contribution it is making to the prosperity of the nation as a whole. This result comes less than a month after Fiji Airways made another early repayment to the FNPF – the national superannuation fund – for the loans it took out to invest in new aircraft. So it is a further vindication of the confidence of the Fijian people in the management of their national airline and especially the efforts of its hardworking staff. The opportunity now is to fly to new destinations that would position Fiji Airways and Fiji even better,” the AG said.

The Fiji Airways Acting CEO, David Bowden, highlighted the strong overall performance of the Group’s international network.

“The growth of our Hong Kong service to China clearly shows the diversity and resilience within the Group to deliver strong results despite economic and market pressures within our core Australian market. In addition, Fiji Link’s regional and domestic network contributed positively to the Group and performed in line with its 5-year plan growth phase now that the re-fleet and rebranding is in place. In particular, we have significantly increased our regional network footprint in terms of capacity offering and new codeshare partnerships with Air Vanuatu and Real Tonga”.

“Our results are also sustainable with any fuel price upsides realised being largely off-set by foreign currency exposures on aircraft US dollar-based loans and AUD dollar revenue streams, exceptional costs and investments in building long term capability. These exceptional costs related to the A330 damaged in Nadi on 16th May 2015.”

Mr Bowden repeated the Chairman’s appeal for everyone at Fiji Airways to remain focussed.

“It is important to acknowledge the exceptional performance contributed by all our staff but we must be mindful that the second half of the year will be challenging if we are to meet our expectations for the full financial year. However, the team is definitely up to the task. We are working hard to finalise a new long haul route, continue our pilot localisation programme between Fiji Airways and Fiji Link and introduce a fourth brand new A330 in our fleet in December. Foreign exchange consideration will continue to be a factor for us, as will the rising price of fuel. But we remain focused and dedicated to the strategies in place to address these challenges”, he said.

Highlights for Fiji Airways Group Performance for First Half of 2015

Ø  Underlying Profit:                                 $17.5m (+16.5% on 2014)

Ø  Increase in load factor:                      1.2%

Ø  Increase in passengers flown:           6.7%

Ø  Increase in trips:                                 5.4%

Ø  Increase in RASK (cents):                  4.6%

Ø  Increase in CASK (cents):                  4.4% (controlled within productivity growth)

Ø  On-Time Performance (OTP):  82%

Ø  New routes launched:                        Nadi-Wellington, Nuku’alofa-Vava’u

Ø  New Aircraft:                                      1 x Boeing 737-800

Ø  New Codeshare Partner’s:                 Air Vanuatu and Real Tonga 

  • Note 1: The provisional results are subject to final review by Group external auditors after conclusion of 2015 financial year (31st December 2015)

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