Air Pacific today announced a record profit of FJ$28.5 million, before profit-sharing, abnormal items and pre-tax, for the financial year ending on March 31, 1999.
This is a 348 per cent improvement on the 1997-98 financial year and represents the 13th consecutive year the airline has recorded a profit.
The net profit of FJ$13.203 million is a 59.6 per cent increase over results of FJ$8.273 million for the previous financial year.
Air Pacific Chairman, Mr Gerald Barrack CBE, said:
“This outstanding profit, achieved in a year of regional economic challenge, resulted from greater efficiencies, restructuring and an improved overall performance. Air Pacific is embarking on a massive expansion of carrying capacity this year. Extra flights to Australia and North America will help increase the airline`s capacity by 70 per cent and its overall flight activity by 24 per cent.
We are expanding our fleet of aircraft and plan to establish a strategic alliance with a major Asian carrier, following the success of the codesharing agreement with American Airlines which began in February this year. Our aim is to be the leading airline in the South Pacific and this dramatic improvement in our results is a testament to the commitment of our employees in achieving that end.”
Revenue of FJ$370.8 million for 1998-99 was an increase of 30.4 per cent over the previous year. Expenses were FJ$344.2 million, an increase of 23.8 per cent over 1997-98.
Mr Barrack said the 7.2 per cent return on revenue for 1998-99 was a major improvement over the 2.2 per cent return in the previous year. The results represented a growth of 19.1 per cent in earnings per share compared with 7.7 percent last year. This also represents a 18.4 per cent return on shareholder funds which validated the belief that the airline is well positioned for the new millennium.
Mr Michael McQuay, Air Pacific Managing Director and Chief Executive Officer, outlined the major factors which contributed to the results:
* The impact of the devaluation of the Fijian dollar in January 1998 on the company`s revenue and expenditure.* Restructure of the airline`s organisation.* Resolution of the pilot and flight attendant log of claims which resulted in a 34 per cent productivity improvement.* Favourable renegotiation of the existing B747 lease and acquisition of a second B747 in December 1998.* Renegotiation of the B767 lease and a four-year extension of that lease.* Renegotiation of the acquisition of three B737-700`s, converting the order to one B737-700 and two B737-800`s.* Introduction of fourth Los Angeles service in October 1998.* Start up of Suva/Sydney service.* Implementation of the Codeshare with American Airlines.* Introduction of the Auckland/Honolulu service.
Mr McQuay also cited renegotiation of maintenance agreements, insurance (aviation and non-aviation) agreements, the strengthening of the Yen. The Company benefited from lower fuel prices which were largely offset by adverse currency impact.
Air Pacific is 51 per cent owned by Government of Fiji and 46 per cent by Qantas.