“What actual Fiji Airways 6 monthly profits?” Letter to the Editor (Fiji Time, Fiji Sun, Ashwin Raj)
“What actual 6 monthly profit for Fiji Airways?”
Letter to Editor (The Fiji Times, Fiji Sun, Island Business, Ashwin Raj) (18 July 2014)
It was initially quite reassuring to read (Fiji Sun, 18 July 2014) that the Fiji Airways is reporting “record profits of $17.2 millions” for six months and that the key driver of this was the 10 per cent higher load factor across the whole network, with four per cent more passengers and five per cent more sectors, all used in a “much more efficient way”.
But it was not reassuring to be then told that this profit figure did not include the Sydney “hard landing” costs of $8.6 million, and the “release of aged management accruals and one-off items like the introduction cost of the first A330”.
In other words, the real profits “in the hand” for the six months was much less than even $8.6 million, although we are not told how much in reality as no costs were given to latter two exclusions.
Readers would then be further worried when told by the current CEO that Fiji Airways “was not in a good shape back in 2013, with a lack of leadership and strategy and a rather dysfunctional management structure”.
This last statement is quite contrary to the immense hype that the public was inundated with by government ministers, the Board Chairman, and the previous CEO (Pflieger) who bought the new Airbuses and disappeared before they flew a single commercial trip.
I hope that Mr Pichler’s performance as CEO will speak for itself when the “underlying” profit trends do become reality in the long run, without any “one-off” events reducing the actual “profits in hand” which are certainly nowhere near $17.2 million. He and Fiji taxpayers do not need the kinds of deceptive hype that Fiji has been subjected to for several years before his arrival.
But while he is in the media, can Mr Pichler inform us shareholders in Fiji Airways,
(a) what percentage of the increased load factor and increased passenger traffic does he attribute to the new colors and the allegedly unique tapa designs painted on the planes?
(b) what did all that “rebranding”, also hopefully “one off”, eventually cost Fiji Airways, reducing actual profits further?
(c) is Fiji Airways still making any profits from the discounted fares on his monopolized domestic routes and how long will these discounts last?
Professor Wadan Narsey