Airways NZ operating profit up 31% over previous year

Airways NZ operating profit up 31% over previous year

Media statement
For immediate release
14 August 2014

Airways New Zealand had a solid performance in the year to June 2014, improving its results in most areas over the previous year, says Airways Chief Executive Ed Sims.

New Zealand’s air traffic control and navigation SOE made a net operating profit after tax (NOPAT) of $11.8 million for the year ended June 2014, up from last year’s operating profit of $9 million. (The final NOPAT last year of $21.7 million was affected by an abnormal cross border lease exit[1]). A 1.9% increase in aviation volumes combined with tight cost control were the primary drivers of the $10.2 million profit for air traffic control services.

Global benchmarks continue to place Airways at the forefront of safety globally, and in the top 5% of most efficient air navigation service providers in terms of aircraft movements per air traffic controller[2].

Airways’ commercial business units returned a $1.6 million profit, lower than last year’s $3 million result, due to lower than forecast revenues and the investment required to establish new businesses. Airways now has three core commercial businesses - training, revenue management and aeronautical information.

Airways invested $33.8 million (an increase of 43% on 2012-13) during the year in service enhancement and capital expenditure programmes to deliver significant benefits to customers. Benefits include fuel savings from more efficient flight profiles, capacity enhancements in controlled airspace and improved on-time performance of aircraft. Inflight delay for airlines flying in to Auckland, Wellington, Christchurch and Queenstown dropped by 52% in the three months to July 2014 compared with the average in the previous two years.

“Airways’ safety, service and productivity initiatives drive our investment in aviation infrastructure as we undergo a quantum transition from ground to satellite-based navigation,” says Ed Sims. “Airways will continue to keep a tight handle on all operating costs to ensure these efficiencies are sustainable.”

Ends

To download a copy of the annual report to June 30 2014 go to http://airways.co.nz/documents/AR2014.pdf

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[1] Airways’ NOPAT of $21.7 million in the year to June 2013 was largely the result of a one-off financial transaction, the termination of a cross border lease which resulted in the release of deferred income of $18.8 million and an increase to NOPAT of $12.8 million. The cross border lease was a type of Qualifying Technological Equipment (QTE) lease. In simple terms, the lease involved the sale and leaseback of equipment and was entered into by Airways in the early 2000s. In 2012, Airways took advantage of highly favourable interest and exchange rates to negotiate the early termination of the lease at a significant profit to Airways.

[2] Global ANS Performance Report 2013

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