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Air Pacific Announces FY2010/2011 Financial Results

Nadi, Fiji - Air Pacific today announced its financial results for the fiscal year ended 31 March 2011 (01 April 2010 – 31 March 2011). Mr Nalin Patel, Chairman of Air Pacific’s Board of Directors, said that Air Pacific Ltd. and Air Pacific Group both recorded operating losses. (Air Pacific Group includes the national airline, its wholly owned subsidiary Pacific Sun, and a 38.75% stake in the Sofitel Fiji Resort & Spa on Denarau Island).

  • Air Pacific Ltd. reported an operating loss of $3.6m, compared to an operating loss of $91.8 million for the previous year.
  • Air Pacific Group reported an operating loss of $4.3m, compared to an operating loss of $78.5m for the previous year.

 On a net basis, which includes payments received due to the cancellation of delayed aircraft deliveries, Air Pacific Ltd. reported an after tax statutory profit of $24.7m, and Air Pacific Group reported an after tax statutory profit of $25.2m (versus a $65.3m loss and a $58.9m loss respectively for the previous fiscal year).

Mr. Patel attributed the significant reduction in losses to the extensive efforts and measures put in place by Air Pacific’s new MD/CEO, his new management team, and Air Pacific’s talented and dedicated employees. “To have accomplished these dramatically improved results from the previous year, which was the worst in our history, is a noteworthy accomplishment which completely validates the Board’s decision to bring in Dave and support our new management team with changing the strategic focus and direction of our National Airline. In particular, our new management team was able to generate 37,000 more passengers, grow Air Pacific’s revenue by $40m, and cut non-fuel costs by $13m.”

Mr. David Pflieger, Air Pacific’s Managing Director and CEO noted that “Our 2010/11 financial results are the result of round-the-clock hard work by the entire Air Pacific team and they are even more remarkable when you consider that underlying fuel price increases in FY2010/11 pushed overall costs up $39m from the prior year and our airline had to deal with its first full year of new competition from two low cost carriers in our largest market. It is also notable that the men and women of Air Pacific delivered these results while improving customer satisfaction and operational performance – work that was no doubt responsible for Air Pacific being voted one of the Top 10 “Small Airlines” in the world in this year’s prestigious Condé Nast Traveler’s 2011 Readers’ Choice Awards.

Other highlights of FY2010 /11 include:

  • Launching new Suva-Auckland service
  • Implementing new airport check-in times to ensure better on-time performance
  • Increasing focus on China and the airline’s Hong Kong route
  • Restructuring and rightsizing Pacific Sun (Air Pacific’s regional carrier)
  • A flawless move to a new global reservations system
  • The completion of a network and fleet assessment which led to this year’s addition of a new B737-800 and the selection of the Airbus A330-200 as a replacement widebody aircraft.

 

“I’d like to thank our customers for their patience and understanding while we continue to restructure and upgrade both airlines, and I’d like to thank the entire team at Air Pacific for their determination and professionalism in delivering these results in the face of a precarious FY2009/10 year-end financial situation and serious challenges posed by fuel costs and unrelenting low cost carrier competition,” Mr. Pflieger added. “Despite FY2009/10’s results being the worst in Air Pacific’s history, everyone got behind our FY2010/11 restructuring effort and made it happen. While we are clearly not done yet, our remarkable improvement from last year’s performance clearly reflects the capabilities of Air Pacific’s team of professionals. In short, our turnaround plan is working.”

“That said, we must finish restructuring and upgrading our airline, and it should be noted that fuel prices are even higher this fiscal year (FY2011/12). Thus, as the bar keeps getting higher, it is critical that we stay focused on completing our turnaround plan and ensuring that Air Pacific can continue to succeed in the face of any future risks which could range from additional oil price volatility to any economic fallout that arises from more problems in the EU.”

“To ensure our future success, our team has already undertaken a series of key initiatives for FY2011/12 which include taking delivery of another Boeing 737-800 aircraft; improving schedules between Fiji and Australia by including double-daily flights to Sydney starting January 2012; signing a new code-share agreement with American Airlines that will allow our passengers to connect to and from nearly 20 destinations in the United States; and acquiring three brand new Airbus A330-200 aircraft that will be delivered in 2013.”

In addition to thanking Air Pacific’s customers for their support and their business in 2010/11, Mr. Pflieger also thanked Air Pacific’s Board of Directors and shareholders for their backing and approval of each of the various initiatives and measures put in place by the new management team.

 Air Pacific Group – financial result highlights

Financial Results ($ millions)

2010/11

2009/10

Revenue

586.6   

544.6

Operating (Loss )

(4.3)

(78.5) 

Other net non-operating income*

26.0

(1.3) 

Statutory Profit / (Loss) after Income Tax

25.2

(58.9) 

Air Pacific Limited – financial result highlights

Financial Results ($ millions)

2010/11

2009/10

Revenue

555.3 

515.0
Operating (Loss )

(3.6)

(91.8) 

Other net non-operating income*

24.8

Statutory Profit / (Loss) after Income Tax

24.7

(65.3) 

 *Other net non-operating income represents contracted amounts received or receivable due to the cancellation of delayed aircraft deliveries, partially offset by other contracted costs expected to be incurred as a result of the cancellation, and Air Pacific Ltd.’s share of the profits or losses of its investment in Richmond Ltd.

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