Fiji Airways Reports H1 2014 Results

Fiji Airways Group today reported its unaudited interim results for the first half of 2014, announcing an increase in operating profits to the corresponding period last year.

The group, legally known as Air Pacific Limited, comprises of Fiji Airways (Fiji’s National Airline), its subsidiary Fiji Link and a 38.75% stake in the Sofitel Fiji Resort & Spa on Denarau Island.

The group recorded an underlying operating profit of FJ$17.2m (HK$72.4m) from 1 January 2014 to 30 June 2014.

The amount is the total adjusted operating profit excluding release of aged management accruals and one-off items like the introduction cost of the first A330 in 2013 and the hard landing cost in 2014. In the corresponding period of 2013, the group’s underlying operating profit was FJ$0.5m (HK$2.1m).

Stefan Pichler, Managing Director and CEO attributed the strong performance to higher load factors, more efficient cost management, streamlined management structures and a highly motivated staff.

“It has been an excellent start into 2014 and now we have to keep the pace as we want to pay a profit share to our staff for 2014 as well as a dividend to our shareholders,” he said. “The key driver of this underlying profitability was the 10% higher load factor across the whole network. We flew 4% more passengers and produced 5% more sectors, but in a much more efficient way. Our company was not in a comparable shape back in 2013 as we didn’t have an agreed strategy in place and suffered from a rather dysfunctional management structure. We put in place corrective measures and laid the challenge to our entire team. I’m delighted with the spirit of a winning team we have created. We have now gained momentum and the focus is to work hard to keep the ball rolling.”

The New Zealand, United States and South Pacific markets performed strongly in this period. Australia and Hong Kong performed weaker than expected due to a weaker exchange rate for the Australian dollar and lower than budgeted load factors for Hong Kong. The domestic network reported a small loss. This is the first time the airline group has released interim results for half its financial year, the best ever in the airline’s history.

“We believe that reporting provisional results for the first half of the financial year is an important step for Fiji Airways. We are committed to improving transparency and credibility, not only at home in Fiji but also for our international financial partners. We will continue our strategy of increasing revenues while controlling costs. Our pricing remains competitive in the market and we will continue to make investments in our customer experience across all touch points. This includes the on-board and on-ground experience, our customer service and the training for our team,” said Mr Pichler. “Today we are sailing in nice weather, but we also have to be ever-ready for difficult times as the airline industry is highly volatile. Although the outlook for the remaining Fiscal Year remains positive, there is no leaning back. This is like a rugby game, we have to pick and drive continuously.”