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

 

Auckland Transport: Successful Bridge Repair Opens Two Additional Lanes To Traffic

The opening of two additional lanes on the Auckland Harbour Bridge this morning will help relieve some motorway congestion for motorists heading home to the North Shore tonight. More>>

ALSO:

Statistics New Zealand: COVID-19 Sees Record 12.2 Percent Fall In New Zealand’s Economy

Gross domestic product (GDP) fell by 12.2 percent in the June 2020 quarter, the largest quarterly fall recorded since the current series began in 1987, as the COVID-19 restrictions in place through the quarter impacted economic activity, Stats NZ said ... More>>

ALSO:

Climate: Scientists Release ‘Blueprint’ To Save Critical Ecosystems And Stabilize The Earth’s Climate

A group of scientists and experts produced the first comprehensive global-scale analysis of terrestrial areas essential for biodiversity and climate resilience, totaling 50.4% of the Earth's land. The report was published in Science Advances ... More>>

ALSO:

MPI: Independent Review Launched Into Assurances For Safe Transport Of Livestock By Sea

The Ministry for Primary Industries (MPI) has launched an independent review of the assurances it receives for the safe transport of livestock by sea. MPI Director-General Ray Smith says Mike Heron QC has been appointed to lead the review, which is expected ... More>>

ALSO:


Computers: New Zealand PC Market Grows Nearly 40% Due To Work From Home Demand

COVID-19 had large impacts on demand for PCs as businesses prepared for lockdowns by purchasing notebooks to mobilise their workforce. In the second quarter of 2020, New Zealand's Traditional PC market experienced a 39.7% year-on-year (YoY) growth ... More>>

ALSO:


University Of Auckland: Whale-Watching By Satellite – Follow Their Travels Online

Scientists have successfully attached satellite tracking tags to six New Zealand southern right whales, or tohorā, and are inviting the public to follow the whales’ travels online. Part of a major research project involving the University of Auckland ... More>>

Commerce Commission: Kiwibank Admits System Failures And Agrees To Pay Customers $5.2 Million

Kiwibank has entered into a settlement agreement with the Commerce Commission after reporting that it failed to have in place robust home loan variation disclosure policies, procedures and systems. In a settlement dated 27 August 2020, Kiwibank admitted that ... More>>

Ministry of Health: Public Transport Distancing Requirements Relaxed

Physical distancing requirements on public transport have been reviewed by the Ministry of Health to determine whether they are still required at Alert Level 2 (or below). The Ministry’s assessment is that mandatory face covering and individuals tracking ... More>>

ALSO:

NZHIA: New Zealand Hemp Industry Set To Generate $2 Billion Per Annum And Create 20,000 Jobs

A new report says a fully enabled hemp industry could generate $2 billion in income for New Zealand by 2030, while also creating thousands of new jobs. Written by industry strategist Dr Nick Marsh, the report has prompted calls from the New Zealand Hemp ... More>>

ALSO:

Stats NZ: One In 14 Employed People Report High Risk Of Losing Jobs

About one in 14 workers say they expect to lose their job or business by mid-2021, Stats NZ said today. A survey of employed people in the June 2020 quarter showed 7 percent felt there was a high or almost certain chance of losing their job or business ... More>>

ASB Quarterly Economic Forecast: NZ Economy Doing Better Than Expected, But Challenges Remain

August lockdown estimated to have shaved 8% off NZ’s weekly GDP, and 0.5% off annual GDP Economy now expected to shrink 5% (year-on-year) by end of 2020 Unemployment rate now expected to peak at 7.2% The latest ASB Quarterly Economic Forecast is less ... More>>

ALSO: