-National Airline Group Announces F$55 Million Profit, Higher Fuel Cost, Large Scale Investments and New Routes Drive FY18 Results-
The Fiji Airways Group has today released its Financial Results for the period ending December 31, 2018. Key highlights include:
The Fiji Airways Group recorded a steady revenue growth of F$90.7 million (totalling F$1,018,697,000) and pre-tax profits of $55.m for the Financial Year ending December 31, 2018. Profits were down 42% on the previous Financial Year, as a result of rising fuel prices, unfavourable currency fluctuations and major fleet and infrastructure investments.
In 2018, Fiji Airways added three brand new Twin Otter aircraft and a Boeing 737 MAX 8 to its fleet. It also opened a new route on its network, flying three times a week between Narita, Tokyo and Nadi, Fiji. This along with Fiji remaining an increasingly popular choice among travelers contributed to Fiji Airways flying 1.7 million passengers during the 2018 Financial Year.
The airline also joined global airline alliance oneworld as its first ever oneworld connect member. Similarly, it signed new, and strengthened existing codeshare relationships with partners including; Alaska Airlines, British Airways, Singapore Airlines and SilkAir.
Despite a raft of initiatives including a record-high revenue figure, one of the biggest factors impacting the financial performance of Fiji Airways Group – in particular its pre-tax profits – was the rising cost of fuel, which increased 28% compared to fuel price in the same period the previous year.
Mr. Andre Viljoen, Fiji Airways Managing Director & CEO, said: “2018 was characterised by significant highs and lows. We grew revenue by 10%, crossing F$1 billion in total revenue and carried 7% more passengers, but this was offset by increased costs.
“Fuel price increases alone accounted for F$31.5 million being taken off our targeted bottom line, while unfavourable foreign exchange variations added another negative impact of $8.2 million. Our network and fleet size grew, which means our manpower requirements grew as well, contributing to increased cost. Despite these and other industry wide challenges, our team responded by diligently managing cost where possible and continuing with our infrastructure and fleet investment strategy, “Mr. Viljoen continued.
As part of The Fiji Airways Group’s investment strategy, during the 2018 Financial Year, it also started construction on its Fiji Airways Aviation Academy (FJAA) in Namaka, Nadi, with the official opening expected late 2019. Once open, the Academy will house three Full Flight Simulators for pilot training and is set to be the first of its kind in the South-Pacific.
Fiji Airways continued its social responsibility initiatives in 2018. The airline planted over 7,000 trees – one for every international takeoff from its Nadi hub. It continued its support towards the rebuilding of South Taveuni Primary and Secondary Schools, which were damaged by Cyclone Winston. It also sponsored of the Friends of Fiji Heart Foundation medical programme, which performs life-saving surgeries in Fiji. Fiji Airways also continued its sponsorship of major sports teams, with Fiji Rugby, the Crusaders and Fiji Paralympics chief among them.
Mr. Viljoen added: “The outlook for 2019 remains challenging. We are set to add two brand new widebody aircraft to our fleet, increasing seat capacity which in turn means more visitors, ultimately benefiting the Fijian economy. Fuel price is expected to negatively impact us in 2019 by F$40 million, hence the need to invest in modern, fuel efficient aircraft that aligns with our commitment to providing a world-class travel experience.”
“Our team stands ready to navigate these challenges, maintaining sound fiscal discipline and a relentless focus on customer experience. 2019 will also see the commencement of a number of sustainability initiatives, as we place strong emphasis on removing plastic and reducing waste where possible. One of our upcoming initiatives will see us remove two tonnes of plastic from our aircraft a year, and save up to half a million litres of water annually.”
Mr. Rajesh Punja, Fiji Airways Group Chairman said: “That we managed to record our highest ever revenue total and post a significant profit despite all the challenges facing our industry is a testament to the hard work and dedication of our entire team. By becoming Fiji’s first billion dollar revenue earning company, we have been able to create more jobs, more opportunities and further growth for Fiji’s tourism industry. The Board also acknowledges the leadership of the management in guiding the team, and is grateful for the continued support of the Fijian Government towards our airline.”