Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Airways sees 27% gain in 2015 profit, misses 2014 target

Airways NZ forecasts 2015 profit to rise 27%, after missing 2014 target

By Tina Morrison

Aug. 20 (BusinessDesk) - Airways Corp. of New Zealand expects to boost profit 27 percent this year, after missing its target last year, on optimism the state-owned air traffic controller's global commercial partnerships will start to bear fruit.

The Wellington-based company forecasts net operating profit after tax of $15 million in 2015, after posting a profit of $11.8 million in the 12 months ended June 30, short of its $14.6 million target, according to its annual report. In 2013, profit of $21.8 million was boosted by a $12.8 million gain from the early termination of an agreement for the sale and leaseback of equipment, while in 2014 result included a $1.9 million write-down on land in Queenstown.

Airways, which controls 30 million square kilometres of South Pacific airspace, adopted the slogan 'Making A New Airways,' or MANA, in July 2012 following a strategic review which aims to move it away from traditional project-based revenue towards growth opportunities in global joint ventures and air traffic control related service businesses.

In 2014, its core business air traffic control services unit increased profit 70 percent to $10.2 million in 2014 as revenue rose 13 percent to $159.9 million after price increases and a 1.9 percent increase in flight volumes following four years of flat volumes. It cut costs by $1 million after reviewing its insurance, property, banking and hardware expenses.

However, its commercial businesses posted a 47 percent drop in profit to $1.6 million, lagging behind its $5.7 million forecast. The ancillary services unit increased profit 26 percent to $2.9 million, meeting expectations. But the company's global services unit lagged expectations, producing no market leading business, with revenue falling 28 percent to $6.8 million, causing the unit to post a loss of $1.3 million from a profit of $700,000 a year earlier.

"The loss reflects a shortfall in forecast revenue as well as the investment in starting up international partnerships and the transition away from one-off consulting contracts," Airways said. "While international markets are competitive, the work during the year to develop partnerships has positioned the business for growth."

Airways formed new global partnerships with Societe Internationale de Telecommunications Aeronautiques and GroupEAD during the year. Airways, SITA and Civil Air Navigation Services Organisation have partnered to provide the Flightyield billing system to deliver cloud-based air navigation services revenue management.

The company also launched a partnership with Madrid-based GroupEAD Europe in July this year to provide aeronautical information management and aeronautical design and development services and products to the Asia Pacific region.

Its training business expanded, securing franchise agreements with Emirates Aviation University in Dubai, the Inter American University of Puerto Rico and the Civil Aviation Management Institute of China. The partnerships need upfront investment but will provide the training business with greater scale and reach, Airways said.

Capital expenditure rose to $33.8 million from $24 million the year earlier as it invests to improve its service, including using satellite-based navigation to enable more efficient, curved landing approaches.

A so-called SMART approach trial to Auckland International Airport ended during the year, with a total of 1,704 Smart approaches flown, saving 25,560 nautical miles of distance, 909,800 kilograms of carbon dioxide, and 234,000 kilograms of fuel worth an estimated $377,000. Airways said management of aircraft noise continues to be an issue.

The company also went live on the Southern Surveillance coverage project in December, which uses technology to provide aircraft information positions at 27 sites in Southland and Otago, some of the country's most mountainous and remote terrain.

"For the first time ever, Airways and airlines now have radar-like coverage down to ground level at Queenstown and low levels over much of the South Island and well out into the Tasman Sea," the company said. "This improves both safety and flight efficiency in a region with extreme terrain and weather conditions, which has experienced significant traffic growth."

Airways had two incidents involving light non-passenger aircraft in the past year, missing its target for zero near collision incidents of any aircraft type. Refinements to processes were made as a result of a review of operations after the incidents, it said.

In its 2014 accounts, the company wrote down $237,000 of goodwill after paying $1 to buy the remaining half of its Aviation English Services joint venture that it didn't already own. The venture provides English language aviation training materials to the industry.

Airways paid a $3 million dividend to the government, up from a $2 million payment last year.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: Fairfax Moves To Create Modern Newsroom

Fairfax Media New Zealand continues its newsroom transformation this week, with a proposal to further organise its editorial operations into focused, local teams and specialist national topic areas. More>>

ALSO:

Dairy: Fonterra Forecast For 2015/16 Season

Fonterra Co-operative Group Limited has today reduced its forecast Farmgate Milk Price for the 2014/15 season to $4.40 per kgMS. Along with its previously announced forecast dividend range of 20-30 cents per share, the change amounts to a forecast ... More>>

ALSO:

BusinessDesk: SkyCity Lifts Minimum Convention Centre Investment To $430M

SkyCity Entertainment Group, the casino operator, has lifted the minimum it will invest in the Auckland International Convention Centre to $430 million and said total costs including land may be $450 million to $470 million. More>>

Statistics: Drop In Dairy Prices Leads Fall In Exports

Total goods exports fell $240 million (5.5 percent) to $4.2 billion in April 2015 compared with April 2014, Statistics New Zealand said today. More>>

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>


BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>

Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>

BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news