July 26, 2012

Air Pacific Announces FY2011/2012 Financial Results

Nadi, Fiji - Air Pacific today announced its financial results for the fiscal year ended 31 March 2012 (1 April 2011 - 31 March 2012). Mr. Nalin Patel, Chairman of Air Pacific's Board of Directors, said that Air Pacific Ltd. and Air Pacific Group both made operating profits and that Air Pacific Ltd. delivered record-breaking revenue. 
  • Air Pacific Ltd. reported an operating profit of $16.5m, compared to an operating loss of $3.7m for the previous financial year.
  • Air Pacific Group reported an operating profit of $13.4m, compared to operating loss of $4.3m for the previous year.
On a net basis, Air Pacific Ltd. reported an after tax statutory profit of $11.4m and Air Pacific Group reported an after tax statutory profit of $10.7m (versus after tax statutory profits including net income due to cancelled aircraft deliveries of $24.8m net and $25.3m respectively for FY2010/11).

Air Pacific Ltd. also recorded its highest ever revenue of $645.9m, an increase of $90.5m in revenue from FY2010/2011, and an increase of $130m compared to FY2009/2010 (the year before airline restructuring and turnaround efforts began). The airline also carried 85,000 more passengers than it did the previous financial year and 122,000 more passengers than it carried in FY2009/2010.

Mr. Patel attributed the airline's continued financial improvement and successful turnaround to the transformation measures put in place by Air Pacific's new MD/CEO, his new management team, and Air Pacific's dedicated and hard-working employees.

"The fact that we managed to return the airline to an operating profit only two years after we experienced the biggest loss in our history speaks volumes about the experience and capability of our new management team and the soundness of their turnaround plan. These strong, positive results during a time when other airlines are struggling validates the Board's decision to hire Dave and support his new team's seasoned strategic focus," Mr. Patel said.

"Under the new team's direction and with full support of the entire Board, Fiji's national airline has benefited from a more than $100m improvement in its operating performance over the past two years - a remarkable feat when one considers the challenges the industry and our own airline were facing." Air Pacific Ltd. announced an operating profit of $16.5m for this fiscal year, compared to an operating loss of $91.8m two years ago and an operating loss of $3.7m last year.

"I would like to thank my fellow Board Directors, our committed and dedicated employees, our loyal customers, our shareholders, and our many business partners for their continuing support in helping us achieve these results," Mr. Patel added.

Dave Pflieger, Air Pacific's Managing Director and CEO said, "Our improved financial performance is solid proof of the significant progress we've made as a team over the past two years. Our turnaround plan, which involves changing virtually every aspect of our company, is clearly working and today's results are a reflection of the incredible efforts of the men and women who proudly represent Fiji's national airline. The fact that we achieved these results despite a number of significant challenges is even more remarkable," the airline's chief executive added. "Some of our challenges included: a $94m increase in actual/operational fuel costs over the past two years, retiring and replacing older fleet aircraft, new and increased competition from not one--but two--low cost carriers (Jetstar and Virgin Australia), as well as a cyclone and two major floods that significantly disrupted airline operations.

Mr. Pflieger cautioned that "Air Pacific's restructuring is not yet complete, but I am very proud of these results as they prove the capability of the entire Air Pacific team."

Mr. Pflieger added; "to be clear, we are not out of the woods yet, and we remain ever mindful of the possible challenges posed by market uncertainty, a slowdown of major world economies, and the ever-present threat of further volatility in oil prices. At the same time, we are clearly making great progress towards our future success and sustainable profitability. With new airplanes and a complete rebranding ahead of us, we remain confident and excited about the future of our airline and the many great things we have planned for our customers."

As announced last month, Air Pacific plans to revert to its former 1951 name, "Fiji Airways," and rebrand the airline to coincide with the delivery of brand-new A330-200 aircraft that start arriving in March, 2013.

"We are making a significant investment in new aircraft, new products, and customer service training in order to offer our customers the best flying experience in the South Pacific. That investment, our demonstrated performance to date, and our great potential are what allowed us to attract industry leading partners to help us with our new A330-200s," Mr. Pflieger noted.

The announced partners for Air Pacific's new wide-body fleet are: Rolls-Royce for engines, Panasonic for in-flight entertainment systems, Zodiac company Weber for seats, and Singapore Airlines Engineering Company (SIAEC) for cabin design and vendor selection.

Other highlights of FY2011 /12 include:
  • Signing a purchase agreement for three brand new Airbus A330-200 aircraft and obtaining initial financing for those aircraft at a difficult time in the financial marketplace;
  • Retiring a vintage B767 aircraft, introducing a new B737-800, and starting B747 services to Hong Kong;
  • Improving Air Pacific's network and schedules, including introducing double daily flights into Sydney, in order to make the airline more competitive and more customer friendly in a core market;
  • Entering into a new codeshare agreement with American Airlines;
  • Finalising multiple strategic partnerships to enhance the flight experience of customers traveling on board new A330s.
  • Adding a new Tabua Club business lounge at Nadi International Airport;
  • Being voted one of the "Top 10 Small Airlines in the World" in the prestigious 2011 Condé Nast Traveler's Readers' Choice Awards; and
  • Improving Pacific Sun's network, fleet, and schedules with better connectivity to Air Pacific's international schedule, as well as adding new weather radar and avionics systems on all DHC-6 Twin Otter aircraft.

Air Pacific Ltd - financial result highlights
Financial Results ($ millions)2011/122010/11
Operating Profit / (Loss)16.5(3.7)
Statutory Profit after Income Tax11.424.8*

Air Pacific Group - financial result highlights
Financial Results ($ millions)2011/122010/11
Operating Profit / (Loss)13.4(4.3)
Statutory Profit after Income Tax10.725.3*

* FY2010/11 statutory profit included net amounts received due to the cancellation of delayed aircraft deliveries partially offset by associated contractual commitments.

All amounts are in Fijian dollars.

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