Airways New Zealand Announces Annual Result

Media Release

Tuesday 4 November 2003

Airways New Zealand Announces Annual Result

Airways New Zealand has announced its annual result for the twelve months to 30 June 2003. The company has achieved an Economic Value Added (EVA*) Group profit of $2.52 million, slightly down on last year’s profit of $2.57, but a strong result over a difficult year for the aviation industry internationally. Airways was able to absorb the turbulence that marked the aviation industry during the period, yet still pay more than $2 million in rebates to customers in line with its Partnership Plan, and return a total of $6 million in dividends to its shareholders.

Airways Chairman, Mr Errol Millar, says the 2002/03 year was one in which the aviation industry in New Zealand and around the world continued to experience unprecedented upheaval.

“In an environment where many of our airline customers have confronted ongoing challenges to their survival, Airways has succeeded in meeting its financial and performance targets while maintaining not only its prices, but also an uncompromising commitment to safety, quality and customer service,” said Mr Millar.

Operational Performance

Airways achieved or progressed all domestic performance objectives laid out in its business plan, with international business continuing to grow, though at a slower than expected rate due to SARS, client-country delays and general international aviation industry distress. These objectives also included: completion of the three year project to upgrade New Zealand’s air traffic management system; completing a renegotiation of the contract to continue to supply services to the RNZAF; and successfully implementing air navigation services in Tonga and Samoa.

Safety Performance

Airways continued to improve its already excellent safety record, continuing the trend of the last seven years. Airways continues to benchmark its safety performance against air navigation services (ANS) providers in other countries, a process that has so far demonstrated its place among the world’s top ANS providers.

Financial Performance

Airways exceeded its financial targets to achieve a Group EVA of $2.52 million. This EVA result has improved shareholder equity to almost $58 million, representing a return on investment after tax of 17.9 percent.

In the conventional accounts net profit after tax was $6.8 million ($7.5m, 2001/2002), and the shareholders’ equity remains stable after paying a dividend of $6 million.

ENDS

*(EVA measures the extent to which a business is performing above or below expectation. A positive EVA means the business is adding value after allowing for a market return to the providers of the capital.)

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