Rough year throws Air Pac $12m into the red

October 26, 2009 05:17:53 PM

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Fiji’s national carrier Air Pacific has ended the 2008/2009 financial year $12.24 million in the red, with chairman Nalin Patel saying the airline’s results plunged to deep losses in the final six months of an “extremely challenging” year.

The pre-tax profit figure is a huge $53.3 million drop from the previous year’s pre-tax profit of $41.09 million.

While revenue for the airline increased by $80 million (15percent) from $542.84 million to $622.78 million, expenditure rose by 21 percent (an increase of $110 million) from $517.51 million to $628.02 million.

As a result, shareholders’ equity dropped $48.6 million from $172,15 million to $123.47 million while cash and term deposits decreased $136.3 million from $227.3 million to $91million at as March 31, 2009.

“The 2008/09 financial year was extremely challenging for Air Pacific and the Group,” said chairman Patel.

“Whilst the first half of the year produced poor trading results, the final six months plunged to deep losses. The most significant cost issue was fuel, which increased by $126.49 million from $171.23 million in 2007/08 to $297.72 million in 2008/09, including the impact of fuel hedge losses.”

Losses were slightly greater for the Air Pacific Group (comprising Richmond Ltd, joint owners of Sofitel Fiji Resort and Spa, Fiji Airlines Ltd, trading as Pacific Sun and Air Pacific Ltd) which posted a before-tax loss of $14.3 million versus a profit of $38.15 million for 2007/08, a drop of $53.3 million.

While Group revenue increased 16 percent from $558.4 million to $648.47 million, costs increased by $120 million from $535.2 million to $655.14 million.

Patel said historically profitable and well run carriers had suffered losses and massive drops in profits, with airline managing director John Campbell predicting that the 2009/10 year end loss for Air Pacific “will be substantially greater” than the $12.2 million loss in the 2008/09 financial year.