Air Pacific records major loss

Fiji's international carrier, Air Pacific has recorded a major loss for 2008 and 2009, and it is expected to worsen as greater losses are expected for the current financial year.

Chairman Nalin Patel has announced losses for both Air Pacific Group and Air Pacific.

The group comprising Richmond Limited, joint of Sofitel Fiji Resort and Spa, Fiji Airlines Limited, trading as Pacific Sun and Air Pacific Limited, experienced a loss before tax of 14.3 million dollars versus a profit of 38.15 million dollars for the financial year 2007 and 2008. This is a negative swing of 52.45 million dollars.

Air Pacific incurred a pre-tax loss of 12.24 million dollars for 2008 and 2009 versus a profit of 41.09 million the preceding year, a swing of 53.3 million dollars.

The airline company's revenue increased by 80 million dollars which is an improvement of 15 percent but expenditure rose by 110 million dollars, an increase of 21 percent.

Despite the huge losses, it has been revealed that for the first time the group carried more than one million passengers compared to just over 901 thousand passengers in the last financial year.

Patel said the 2008 and 2009 financial year was extremely challenging for Air Pacific and the Group.

He said whilst the first half of the financial year produced poor trading results the final six months plunged to deep losses.

The Air Pacific Chairman said the most significant cost issue was fuel which increased by 126.49 million dollars.

Additional costs arose from the major overhaul and cabin refreshment undertaken on the B747 fleet in early 2009 which required the lease of a B747 aircraft and crew for four months to maintain schedule integrity for Fiji's tourism market.

The strong US dollar also made a cost impact for Air Pacific.

While announcing the huge losses, Air Pacific also highlighted that the impact of the global financial crisis has devastated airlines worldwide. The International Air Transport Association has reported that globally airlines lost 5 billion US dollars last year.

The Association forecasts that airline losses will exceed 11 billion US dollars in the year 2009.