The Fiji Airways Group has boosted annual revenues above FJD1 billion for the first time in its 67 year history, but this milestone for the 12 month period ending 31-Dec-2018 was soured by an almost halving of pre-tax profits.
The financial results for the calendar year show revenue up 10% from FJD929 million in 2017 to FJD1.02 billion and was driven by both fleet and network growth. In a year that also saw the airline join the oneworld global alliance as its first ever oneworld connect member and sign new, and strengthened codeshare relationships with partners including; Alaska Airlines, British Airways, Singapore Airlines and SilkAir, Fiji Airways introduced three brand new DHC-6 Twin Otter aircraft and a Boeing 737 MAX 8 to its fleet.
On the network side it introduced a three times a week link between Narita, Tokyo and Nadi, Fiji. The new aircraft and new international route, along with Fiji remaining an increasingly popular choice among travellers, contributed to Fiji Airways flying 1.7 million passengers during the financial year.
But, Group profit before tax slipped 42% to FJD55.3 million compared to FJD95.8 million for the previous year as a result of “rising fuel prices, unfavourable currency fluctuations and major fleet and infrastructure investments,” according to the carrier. Its results show fuel price impacted profits by FJD31.5 million with a 28% rise versus 2017, and foreign exchange valuations impacted profits by a further FJD8.2 million.
Andre Viljoen, managing director & CEO of Fiji Airways says 2018 “was characterised by significant highs and lows,” and despite industry wide challenges, says its staff “responded by diligently managing cost where possible and continuing with our infrastructure and fleet investment strategy.”
As part of that investment strategy, Fiji Airways Group has started construction on its Aviation Academy 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.
“The outlook for 2019 remains challenging,” warns Mr Viljoen. The airline is set to add two brand new widebody aircraft to its fleet. This will boost its seat capacity which in turn should deliver more visitors, “ultimately benefiting the Fijian economy,” says Mr Viljoen. But, fuel price “is expected to negatively impact us in 2019” he adds, suggesting an anticipated FJD$40 million hit.
“Our team stands ready to navigate these challenges, maintaining sound fiscal discipline and a relentless focus on customer experience,” adds Mr Viljoen.