Air Pacific 2009 Annual Report

page 1

air pacific annual report 2009

page 2 - air pacific annual report 2009

Air Pacifi c is near fi nalisation of the development of an Environment Management System (EMS) to be integrated with the Company Safety & Security Management System. The EMS is a tool to manage the impacts of Air Pacifi c’s operational activities on the environment, basically aircraft engine emission, aircraft noise, in-fl ight services waste and ground waste.

All staff will undergo environment awareness training.

Air Pacifi c has taken appropriate steps to address environmental issues as follows:

• To reduce paper use, the Company has established an electronic manual system for staff to have access to company manuals through intranet. This eliminates paper use and waste related to hardcopy issuance.

• Air Pacifi c has successfully achieved the target of switching to electronic tickets (ET).

• As part of our fuel conservation efforts, a team has been set up to reduce consumption.

• Air Pacifi c will soon offer passengers the opportunity to offset the carbon emissions related to each fl ight they take with us. This will be done at the point of purchase where the customers will be presented with the option of offsetting their fl ight.

As a concerned corporate citizen, these initiatives are in addition toAir Pacifi c’s existing commitment to environmental awareness andresponsibility where environmental issues are concerned.

As a major business in Fiji, we support the development of tourismin the country. We also support the maintenanceof a clean and natural environment to enhance our tourismproduct. Employees of Air Pacifi c are encouraged to participate invarious ‘clean-up’ campaigns that take place in the community.

Air Pacifi c’s overall commitment is to the maintenance andpromotion of a clean and pure environment. We practise recyclingwherever possible, for its economic and environmental benefi tsand reduce waste material and engine emission. We actively seekand use biodegradable and non-polluting chemicals in aircraftmaintenance and cleaning tasks.

Commitment to the environment

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Chairmans ReportChairmans ReepportContents

Chairman’s Report ... 4

Members of the Board ... 4-5

Managing Director & Chief Executive Offi cer’s Report ... 6

Corporate Governance ... 8

The Year in Review ... 9

Route Map ... 20

Financial Statements & Reports ... 21

Five Year Comparative Statistics ... 50

Air Pacifi c Offi ces ... 51


The Air Pacifi c Group (incorporating Air Pacifi c Ltd, Fiji Airlines trading as Pacifi c

Sun and Richmond Limited, joint owners of Sofi tel Fiji Resort and Spa), recorded a disappointing $14.3 million loss before tax for the year ended 31st March 2009 versus a pre tax profi t of $38.15 million the preceding year, a negative swing of $52.45 million. The Group after tax loss was $7.17 million versus a post tax profi t of $24.96 million the preceding year.

Air Pacifi c, as a company, incurred a loss before income tax of $12.2 million compared with a pre tax profi t of $41.1 million for the previous fi nancial year. This represents a swing of $53.3 million.

While Group revenue increased by 16% to $648.5 million, expenditure increased substantially, and at $655.1 million was $119.8 million (or 22%) higher than the prior year’s $535.3 million.

As a Company, Air Pacifi c’s revenue increased by $80 million or 15% versus last year to $622.8 million but, expenditure at $628 million, rose 21% or $110 million.

Shareholders’ Equity for the Group fell from $161.8 million to $111.1 million, as $50.7 million was re-injected into cash fl ow in order for the Company to service hedge commitments and meet costs. The Directors determined that no dividend be paid to shareholders.

Despite rigid expenditure controls throughout the year, operating costs soared. The key drivers were fuel, aircraft lease and hire, major heavy maintenance checks on all six jet aircraft and royalty withholding tax. Cost escalation was also driven by a strengthening US dollar, given that Air Pacifi c’s major expenditures are incurred in US dollars whilst earnings were in weaker currencies. The cost impact of foreign exchange losses was $10 million.

Jet fuel prices were particularly volatile, peaking at US$187.50 per barrel in July 2008. With jet fuel forecast to reach US$200 a barrel by the end of 2008, a decision was taken in June and July 2008 to hedge approximately 33% of the airline’s 2008/09 jet fuel requirements at around US$155 a barrel.

The subsequent dramatic drop in spot fuel prices from August 2008 to US$120 was unforeseen and totally unexpected, catching airlines around the world off guard. Fuel prices continued to drop and, in January 2009, reached their lowest point of just over US$50 a barrel.

“I extend my appreciation to the ‘team’ at Air Pacifi c and

thank them all for persevering during what was without doubt one of the toughest years the

airline has experienced in its 58 years of operation.”

Nalin Patel

Chairman’s Report

AIR PACIFIC LIMITED: (Loss)/Profi t Before Tax

2005 2009200820072006

Financial Year Ending 31 March 2009

40

30

20

10

0

(10)

(20)

FJD

Mill

ions

50

page 5

Board of Directors

From left to right: Paul Edwards, Isikeli Waqa, Simon Hickey, Aslam Khan, Nalin Patel – Chairman, John Campbell – Managing Director & CEO, Bernadette Rounds-Ganilua, Charles Harvey.

Absent: Narendra Kumar

The hedging strategies introduced during the year resulted in an ‘out of money’ position, with a hedge loss impact of $62 million.

Major expenditure and cash drawdowns were incurred due to heavy maintenance ‘D’ Checks on Air Pacifi c’s two B747-400 aircraft. Total cost of these checks was $22 million. Hiring of replacement aircraft to minimise schedule disruption during the four months the B747-400 aircraft were being serviced incurred a further cost of $19 million.

Compounding this scheduled expenditure was the worsening of the global economic crisis in the second half of the year. The negative impact on business travel and tourism infl ows greatly affected traffi c volume and yield, resulting in depressed earnings.

Natural disasters also played their part in adding to Fiji’s tourism woes. Apart from the devastation Nadi’s January 2009 fl oods caused to Fiji residents, many resorts were badly damaged and infrastructure hard hit, causing

disruption and cancellations on a scale not previously experienced in Fiji.

Given these circumstances, the dedication, effort and commitment shown by Air Pacifi c’s management and staff throughout the year is to be applauded.

Looking to the future, Air Pacifi c is not immune from the impact of global economic downturn and further uncertainty is created through the proposed capacity increases by competitors. The journey back to acceptable levels of profi tability will be immensely challenging.

On behalf of the Board, I extend my appreciation to the ‘team’ at Air Pacifi c and thank them all for persevering during what was without doubt one of the toughest years the airline has experienced in its 58 years of operation. I also thank my fellow Directors for their commitment and contribution and the Prime Minister and members of his Government for their support and guidance to Air Pacifi c throughout the year.

Nalin PatelCHAIRMAN

Airport

Selling and Marketing

Manpower

Lease and Hire

Fuel

OthersEngineering and

MaintenancePax and Crew

AIR PACIFIC LIMITED: Expenditure CompositionFinancial Year Ending 31 March 2009

47% 10%

9%

6%5%9%8%

6%

AIR PACIFIC LIMITED: Shareholders’ Equity

2005 2009200820072006


160

120

80

60

40

20

0

FJD

Mill

ions

200

140

100

180


Chairmans ReportChairmans RRepport

John Campbell

Managing Director & CEO

In last year’s report it was predicted that the year ahead would present diffi cult operating conditions for the Air Pacifi c Group and Air

Pacifi c and, for that matter, airlines worldwide. But no one predicted the economic downturn that was experienced worldwide and its impact on tourism and aviation. Few airlines around the world are making profi ts and all indications are that the operating environment is likely to remain turbulent, an assumption borne out by IATA’s forecast that global airline losses will total US$11 billion in the 2009 calendar year. These losses are underpinned by weakened demand and signifi cant surplus capacity globally.

It was against this backdrop that Air Pacifi c incurred an operating loss of $12.2 million before tax.

Although the Chairman has already outlined the key items contributing to this loss it is prudent to further dissect the impact that issues such as fuel, the global recession, aircraft maintenance and natural disasters had on Air Pacifi c’s operations over the fi nancial year.

While the global fi nancial collapse, which started in October 2008 and was in full fl ight by the end of the fi nancial year, impacted severely on companies worldwide, airlines such as Air Pacifi c were particularly hard hit. Air Pacifi c and the Group are highly dependant on tourism infl ows to Fiji, coupled with MICE (Meetings, Incentives, Conference, Exhibition) groups and limited but valued business class travellers across the network.

Apart from the dramatic downturn in holiday traffi c as people tightened their purse strings and stayed at home, Business Class traffi c, customers that help balance yield, virtually dried up.

A number of companies with conferences and events planned for Fiji cancelled or postponed. Incentive, conference and exhibition bookings disappeared as corporations sent out messages of austerity to demonstrate savings and cost avoidance against a background of

plunging shareholder returns and staff retrenchments.

Fuel cost continued its upwards spiral during the early part of the fi nancial year, rapidly accelerating from US$65 to US$187.50 per barrel. This added in excess of $126 million to our budgeted spend with experts predicting the price would soar past the US$200 per barrel mark.

Air Pacifi c hedged against this fuel increase at up to US$155 per barrel but not even the most astute trader foresaw the spectacular collapse in fuel prices that occurred during the second half of the year. As a result, fuel hedge losses exacerbated the impact of reduced customer numbers on our aircraft.

Then, in January 2009, Fiji almost disappeared underwater as Nadi and the Coral Coast experienced some of the worst fl ooding seen in decades. During that period Air Pacifi c cancelled only one fl ight (to Christchurch) as Operations staff struggled to get Pilots and Cabin Crew to work. The efforts of all staff to come to work and sustain operations were, and are, deeply appreciated. Without that effort thousands of tourists would have been stranded at Nadi Airport without meals or accommodation and relief supplies would not have been fl own into Fiji.

Media coverage of this natural disaster in all key markets led to massive cancellations and new bookings virtually ceased. New bookings did not eventuate until late March.

The freight market also collapsed, with crops rotting in Fiji fi elds and manufacturing on a global scale wound down. This created excess freight space and rates in this revenue-generating area continued to tumble.

Negative reporting by overseas media of the political situation in Fiji led to further cancellations as a number of countries issued warnings on travel to Fiji. Media reporting and major metropolitan government’s criticism of the abrogation of the Constitution, in mid-March, further impacted Fiji as a holiday destination.

With all these factors driving down business at a time operating costs were rising, Air Pacifi c dramatically cut air fares in order to attract visitors back to Fiji.

As a consequence, all forms of expenditure were further tightened and severe restrictions were placed on staff recruitment and replacement and capital purchases. Operationally, we fl ew our aircraft dynamically, reducing planned services to match low demand by withdrawing

AIR PACIFIC LIMITED: Productivity

2005 2009200820072006


1000

800

600

400

200

0

FJD

Mill

ions

1200

RTK’s per Employee ATK’s per Employee

“The Air Pacifi c Group carried more than one million passengers, a total of 1,115,790 versus 901,724 in 2007/08.”

page 7

some fl ights to Sydney, Auckland, Brisbane, Melbourne and Los Angeles.

Aircraft were swapped to match the size of aircraft fl own to demand on specifi c routes to minimise fuel burn and operational costs. Loss making routes of Japan and Honolulu-Vancouver were cancelled, Gold Coast fl ights were commenced and suspended and services to Funafuti initiated. Flights between Nadi, Christmas Island and Honolulu were suspended pending runway repairs on Christmas Island.

Despite cost minimisation, the 2008/09 year was one in which all jet aircraft in our fl eet faced scheduled heavy maintenance checks. Both B747-400 aircraft underwent D-Checks in Singapore, which necessitated each being off line for two months at a time.

In addition to the cost of these checks, Air Pacifi c incurred an additional $19 million expenditure to charter replacement aircraft to maintain support for Fiji’s tourism industry and to honour schedules.

One of the brighter lights of the year was the improved performance of Air Pacifi c’s subsidiary, Pacifi c Sun, which continued to make a valuable contribution to the seamless carriage of Air Pacifi c’s international passengers on the domestic and regional South Pacifi c front whilst concurrently improving and expanding domestic fl ights.

For the fi rst time, the Air Pacifi c Group carried more than one million passengers, a total of 1,115,790 versus 901,724 in 2007/08.

Despite cost controls, we continue to invest in technology and our people. A Cultural survey was conducted, resulting in a number of organisational training and development changes. The reporting line of HR is now direct to the Managing Director and Chief Executive Offi cer, an Employee Services Group has been established and a new Training Manager appointed, leading to a full review of training needs and courses.

An Executive Assessment for succession planning was concluded by a team of outside consultants. Three sixty-degree reviews led to rotation of executives to round out their strengths and prepare them for advancement within the management structure.

Despite ongoing cost controls and market stimulation, Air Pacifi c continues to fi nd trading conditions arduous. The airline remains steadfastly committed to its role as Fiji’s international airline and will continue its efforts to operate profi tably in a depressed global economy that is just starting to show signs of slow recovery. The 2009/10 year will be even more diffi cult than 2008/09 with traffi c and yields deeply depressed, Fiji’s tourism and traffi c still to recover, additional competitors entering the market and ongoing fuel hedge losses.

I would like to take this opportunity to thank the Board, Chairman and Government for their guidance and support, and management and staff for their extraordinary dedication and commitment to the Company, especially during the natural disaster in January this year. Such commitment bodes well for the future of Air Pacifi c and refl ects on the resilience that is an intrinsic part of the make up of the people of Fiji.

John CampbellMANAGING DIRECTOR & CEO

AIR PACIFIC LIMITED: Revenue CompositionFinancial Year Ending 31 March 2009

Passenger

3%7%

20%

70%

OtherCargo and Mail

Capacity Seat Sale

page 8 - air pacific annual report 2009Corporate Governance

BOARD RESPONSIBILITIES• Protect and enhance shareholder value• Set and review corporate strategies and

strategic direction• Monitor operating and fi nancial

performance• Set and review senior executive succession

planning • Risk management• Report to shareholders

BOARD STRUCTURE• Minimum of fi ve and maximum of

nine Directors• Four Non-Executive Fiji Directors are

appointed by the Fiji Government• One Executive Fiji Director (Chief

Executive) is appointed by the Fiji Government

• Four Non-Executive Directors are appointed by Qantas providing Qantas holds more than forty percent of all voting shares

• Chairman is a Non-Executive Director

To ensure the independence of the Air Pacifi c Board and to protect the airline’s position as the Fiji fl ag carrier, the Articles of Association (Articles) provide that:• The location of the Head Offi ce and Principal Operational Centre will be in Fiji;

• Fiji Directors (who must be Fiji Nationals) will comprise the majority of Directors;

• The Chairman and Deputy Chairman must be a Fiji Citizen;

• Whilst Qantas has the right to appoint Qantas Directors and holds more than ten percent of voting shares in the Company, it cannot vote in any election or removal of Fiji Directors by shareholders;

• Each Non-Executive Fiji Director is appointed for a term of three years;

• Quorum for a Directors’ meeting is fi ve Directors and must include one Qantas Director while Qantas holds more than ten percent of voting shares;

• Approval by two-thirds of Directors for specifi c major decisions (as shown in the Articles) by the Board.

BOARD MEETINGS • Minimum of six meetings a year

COMMITTEES • Board does not delegate major decisions to

Committees.• Committees are responsible for

considering detailed issues and making recommendations to the Board.

• Audit Committee - four meetings a year - assists the Board in fulfi lling its accounting

and fi nancial reporting responsibilities, corporate policies and procedures

- reviews and monitors internal and external auditors

- consists of four Directors, of which one must be a Qantas Director

• Remuneration Committee - one meeting a year - recommend to the Board remuneration

package for the Managing Director & Chief Executive Offi cer

- consists of three Directors, of which one is a Qantas Director

• Safety & Security Committee - four meetings a year - assists the Board in fulfi lling its corporate

governance responsibilities in regard to safety and operational security, operational risk management, and compliance with operational, legal and regulatory obligations

- consists of three Directors, of which one must be a Qantas Director

STANDARDS• Formal review of Board performance• Active participation by all Directors at all meetings

• Open access to information• Independent professional advice is available

to all Directors• Formal Code of Conduct – covering

confl ict of interest

CODE OF CONDUCTThe Air Pacifi c Code of Conduct governs Air Pacifi c commercial operations and the conduct of the Directors, employees, consultants and all other people when they represent Air Pacifi c.

GENERAL PRINCIPLESAll Directors and employees of Air Pacifi c are to undertake their duties with honesty and integrity, and in a manner consistent with the highest ethical standards prevailing in the business communities. Air Pacifi c employees must act in the best interest of Air Pacifi c.

page 9

Chairmans ReportChairmans ReepportThe Year in Review

NETWORK PERFORMANCE

Throughout the 2008/09 fi nancial year, Air Pacifi c invested in destination marketing in collaboration with Tourism Fiji to ensure strong presence in core markets. With a strong marketing presence, revenue increased by 15% against a 9% increase in capacity versus 2007/08 whilst passengers carried by Air Pacifi c increased 5.1% from 848,712 to 901,724.

Poor revenue performance for the last quarter of 2008/09 dragged down the overall year’s results. This was due primarily to the impact of the January fl oods on Fiji’s tourism, the growing affect of the global fi nancial crisis, and was further impacted by negative publicity in Australia and New Zealand following political developments in Fiji.

Each market presented its own challenges and required a range of tactical rather than brand advertising initiatives to achieve volume and retain destination market share. The strategy to drive volume came at the expense of yield.

Strategies included preserving strong ties with trade partners, growing the e-Commerce platform including greater focus on Air Pacifi c Holidays, our on-line dynamic packaging solution, pushing network traffi c and enhancing the Air Pacifi c product through renovation of the Nadi Tabua Lounge and refurbishment of cabin interiors during scheduled aircraft heavy maintenance checks.

Pacifi c Sun’s increased presence has added a new dimension to Air Pacifi c’s marketing with the domestic subsidiary offering seamless connections to customers throughout Fiji’s domestic and regional routes.

AustraliaThe Australian region started the year off positively with good volume and strong yields underpinned by the strengthening of the Australian dollar. The fi nal quarter of 2008/09 saw a collapse in demand and revenue as a result of negative PR following the January 2009 fl oods.

Overall capacity was up 3% with total passenger revenue up 15% on 2007/08. Flight frequency for all ports was reduced as aircraft capacity was matched with demand in the fi nal quarter.

Christmas Island/Honolulu

New Zealand

Australia

Pacifi c Islands

Honolulu/Vancouver

Los Angeles

Japan

AIR PACIFIC LIMITED: Passenger RevenueFinancial Year Ending 31 March 2009

32%

13%

9%4%

31%

10%

1%


Destination competition remained strong throughout the year with traditional markets of Indonesia, Thailand, Vietnam, Hawaii, New Zealand and other South Pacifi c islands posing serious competition for Fiji and Air Pacifi c. A push by the Australian government and Tourism Australia for Australians to holiday at home as a result of diminishing inbound tourism, coupled with low pricing by domestic carriers, created a new competitive threat for Fiji.

Increased frequency by a competitor redirecting excess capacity from Australian domestic markets to Fiji added further pressure for Air Pacifi c. Competition for market share in a declining market saw Air Pacifi c go head-to-head on pricing contributing to greatly reduced yields in the latter six months of the year. To supplement point-to-point traffi c, network selling was actively pursued with North America destined travellers attracted via competitive pricing and schedule alignment. This traffi c base is limited for Air Pacifi c given aggressive trans-Pacifi c competition between Qantas, Delta, United and Vaustralia.

New ZealandOverall, New Zealand routes performed strongly in 2008/09 despite deterioration in the fi nal quarter of the fi nancial year. This was due in part to the strong contribution from the UK/Europe and North American markets on the AKL-NAN and CHC-NAN routes cushioning the soft performance of New Zealand origin traffi c. Overall revenue was down 1% with capacity down 1% on last year.

A negative groundswell towards Fiji caused by the country’s political problems impacted adversely on outbound travel from New Zealand, with other Pacifi c Island destinations benefi ting as a result. Strong destination competition and value based pricing required Air Pacifi c and Tourism Fiji to run consecutive tactical campaigns to remain visible in an extremely cluttered retail environment. The Cook Islands, Samoa, Tahiti, Vanuatu and New Caledonia now pose serious competition and Fiji will need to work hard to regain its preferred status as the premier destination within the South Pacifi c. This is achievable given the range of branded product in Fiji and dedicated airlift offered by Air Pacifi c. Marketing campaigns will be able to restore good volume with a stable political backdrop.

North AmericaThe North American market continued its steady performance from the previous year, fi nishing 22% up on last year’s revenue despite the signifi cant softening of US origin traffi c in the fi nal quarter as the economic collapse impacted leisure and business travel.

Capacity grew 28% for the year out of Los Angeles but was down 33% to Honolulu due to cessation of Honolulu-Vancouver fl ights. Following the withdrawal of the Honolulu-Vancouver service, negotiations took place with Alaska Airlines and a code share agreement was reached to carry Canadian traffi c via Los Angeles, providing continued presence in the Canadian market. The U.S. market performed similarly to Australia with the fi rst six months posting strong results and the second half struggling under the weight of the global fi nancial crisis which had a fl ow-on effect on yields because of deterioration in business class travel.

From left to right: Watson Seeto – GM Freight & Operational Services, Thomas Robinson – GM Engineering, Dallas Foon – GM Strategic Planning, Ashwin Singh – GM Finance, Capt. Matereti Tuisue – GM Flight Operations & Chief Pilot, Josephine Yee Joy – EGM Corporate Support & Company Secretary.

“…negotiations took place with Alaska Airlines and a code share agreement was reached to carry Canadian traffi c via Los Angeles,

providing continued presence in the Canadian market.”

AIR PACIFIC LIMITED: Operating Revenue

2005 2009200820072006


600

500

400

300

200

100

0

FJD

Mill

ions

700

page 11

In the earlier months, Air Pacifi c operated fi ve and six B747 services per week into the U.S, but frequency was pared back to four services in the second half of the fi scal year.

Most activity in the market was tactically driven and Air Pacifi c worked closely with specialist wholesalers selling the South Pacifi c. Increased e-commerce activity in a market that is very internet-driven helped to build the profi le of Fiji and the airline. As in other markets, the booking profi le shortened signifi cantly with up to 50% of bookings coming in during the eight-week period prior to travel with vacationers scouring the net for the best deals.

Japan A lot of attention and effort was focused on the Japan route in an effort to turn around what has been a declining market for several years. Air Pacifi c worked closely with Japan-based wholesalers, Japan Inbound Tour Operators Commission and Tourism Fiji on tactical campaigns aimed at building traffi c.

Unfortunately, a combination of escalating operating costs with declining yields and volume forced a decision to withdraw services from Tokyo effective end March 2009. This was a particularly hard decision as Air Pacifi c had been operating to Japan for the past twenty years and Narita was Air Pacifi c’s only gateway to Asia. Fiji and Pacifi c IslandsThe Pacifi c Islands performed to expectations throughout the year. Most routes carried steady traffi c apart from a

downturn towards the end of the year that mirrored the airline’s overall performance.

Revenue was up around 32% on last year with a 21% increase in capacity.

Twice-weekly ATR42 services to Tuvalu were introduced in August 2008, operated by Pacifi c Sun on behalf of Air Pacifi c. Services to Samoa were increased from two to three per week during peak season as were services to Tonga (two per week ex-Nadi and up to three per week out of Suva). Vanuatu was also serviced by two B737 fl ights per week with one of those services continuing on to Honiara. Twice weekly B737 services are operated to Tarawa in Kiribati however quasi charters to Christmas Island remain suspended until the airstrip has been upgraded.

FINANCE

Cash management was a major issue for Air Pacifi c over the year. As a direct result of the worsening global fi nancial crisis, booking trends shortened from three months and longer to six to eight weeks from date of travel, resulting in tightening cash fl ow from September 2008.

Compounding the cash fl ow impact of the late booking trend, yields continued to decline as prices were cut to stimulate demand.

Cash fl ow was further hampered by losses associated with fuel hedging.

Following record fuel cost increases Air Pacifi c hedged on a rising market against forecasts that jet fuel would reach USD200 per barrel. However, the dramatic and unexpected plunge in fuel prices from August 2008 left Air Pacifi c committed to the higher hedged price. Contracts to buy out hedges were not achieved as the Reserve Bank of Fiji did not approve applications for remittance of funds from Fiji to pay for the purchase of fl oor pricing.

John Campbell – Managing Director & CEO, Glen Brabant – EGM Operations/Services, Jimmy Samson – GM Customer Relations & Service, Michael Nacola – GM Sales & Marketing, Ranjan Naidu – GM Information Technology & Communication, Isake Komailevuka – GM People


Offshore borrowing was obtained due to Reserve Bank of Fiji’s requirement to bolster and protect Fiji’s cash reserves. Air Pacifi c’s cash had to remain onshore and was not permitted to remit funds for offshore commitments.

Staffi ng of senior roles in Finance was again a major issue with fi ve key positions lost to overseas migration. Constant on the job training is carried out in an effort to promote from within but some of the positions had to be fi lled by advertising externally.

Last year saw the adoption of new IFRS standards for the Company’s fi nancial reporting. This year’s fi nancial report provides more disclosure and detail on key fi nancial drivers, risks and impact of market trends and shifts.

Finance continues to provide full accounting functions for subsidiaries Richmond Limited and Pacifi c Sun. Staff are on secondment to Pacifi c Sun and ongoing training is being conducted for the domestic and regional carrier. Finance’s Revenue Accounting Systems were reviewed and updated during the year to maximise effi ciency.

STRATEGIC PLANNING

Further delays to the delivery dates of the new Boeing 787 aircraft due to production problems incurred by Boeing forced Air Pacifi c to extend lease and maintenance arrangements on the B767-300 and two B747-400 aircraft. The two B747 aircraft underwent scheduled heavy maintenance D-Checks during the year which presented

an opportunity to refresh and refurbish the interior of the aircraft to maintain standards during the lease extensions.

As each aircraft was offl ine for two months at a time, relief aircraft were obtained to maintain schedules for the benefi t of Fiji tourism. Despite a scarcity of suitable aircraft for short-term lease, negotiations were successfully concluded to lease a fully crewed aircraft through United Airlines.

A Three Year Plan was developed and presented to the Board based on growing business through the introduction of new regional services and adding new international ports to the network. Following route studies the decision was taken to operate to fl y to Coolangatta on Queensland’s Gold Coast and to Hong Kong. Coolangatta commenced twice weekly B737 operations in early December 2008, immediately following cessation of the Honolulu-Vancouver service. The route initially performed to expectation but the Fiji fl oods in January 2009 and the escalation of the global fi nancial crisis led to declining travel markets worldwide. The service was suspended and fl ights consolidated with daily Brisbane-Nadi services in March 2009.

The Hong Kong service was deferred from June to December 2009 in view of the global economic conditions.

An ongoing Strategic Planning role is the maintenance of Air Pacifi c’s government relationships in Fiji and throughout the region. Several presentations were made to various government ministers and offi cials and assistance was provided to the Fiji government in the negotiations for Hong Kong traffi c rights and the air service agreement with the Chinese government. A Memorandum of Understanding was signed and an Air Services Agreement fi nalised for initiation in April 2009.

“A Three-Year Plan was developed and presented to the Board based on growing business

through the introduction of new regional services and adding new

international ports to the network.”

page 13

INFORMATION TECHNOLOGY

A number of projects identifi ed in the 3-year IT Strategic Plan approved by the Board last year were initiated during the year.

One of the most signifi cant events was the implementation of Air Pacifi c’s Disaster Recovery Centre in July 2008. VT Solutions were contracted to establish this mirror operations centre offsite in Nadi.

To protect business continuity Air Pacifi c now has a back-up site that guarantees ‘business as usual’ in the case of a disaster at Head Offi ce. All critical systems currently in use within the airline have a real-time redundant switch over.

Air Pacifi c’s electronic ticketing project, initiated to meet IATA’s paperless ticketing deadline, achieved 100% implementation across the network.

The IT and Airport departments were heavily involved with the training and implementation of new Customer Management and Flight Management systems for all ports in the domestic and international network. Through the

commitment and dedication of the project team all airports were able to cut over by March 2009, thereby replacing the old Qantas QUBE system.

Employing the latest in internet technology, Air Pacifi c successfully implemented the AMADEUS ALTEA check-in and fl ight management systems.

Air Pacifi c is now in the process of implementing one of IATA’s Standardising the Business projects – bar coded boarding passes. These new boarding passes will replace the old magnetic strip system. All airports should be online with bar coding by December 2009.

A de-centralised Refunds System was established in all regional stations in December 2008. This allows each offi ce to speed up the processing of customer refund claims that previously had to be handled as a paper-intensive process originating from head offi ce.

Enhancement of the Air Pacifi c website continued throughout the year to introduce more online product options through the Air Pacifi c Holidays booking engine. These enhancements achieved $1 million a week performance by July 2008. Sales continue to rise in 2009.

Fiji is also now fully compliant with U.S. Homeland Security AQQ online requirements that safeguard travel to and from the United States. Certifi cation was obtained in March 2009.

Work is currently underway in Hong Kong to interlink with the two major reservations systems in the Asia region – ABACUS and SKYTRAVEL. Once both systems are online, 95% of sales and distribution for Air Pacifi c will be interlined.

Automation upgrades were completed for all Air Pacifi c ports including remote stations Christmas Island, Funafuti and Tarawa.


Self-ticketing and the establishment of B2B portals on the internet are other streamlining options currently being developed as Air Pacifi c focuses on online distribution and promotion in line with customer preference for self service.

A wireless communication network was implemented between the Air Pacifi c headquarters, the Nadi and Suva airport offi ces and its subsidiary regional airline, Pacifi c Sun. A new PABX/telephony system that ‘talks’ wirelessly to the Air Pacifi c network was also implemented for Pacifi c Sun.

HUMAN RESOURCES

One of the major tasks undertaken by the Human Resources division was an internal ‘Cultural’ survey that involved interviews and input from staff network wide to evaluate staff satisfaction, training needs, career planning and motivation.

A number of initiatives related to delivery of expectations of staff and management arose from this survey. These included:

- Individual HR relationship accountability for specifi c departments within each division

- Improved departmental manager training to oversee and direct outcomes

- Creation of an Employee Services department to not only better administer staff issues but to also involve staff more in the delivery process and support their welfare and wellbeing

- Increased emphasis on the ‘Relations’ side of ‘Industrial Relations’ both internally and with external organisations such as Unions

- Development of specifi c HR-based skills such as succession planning and career development.

The division is now reviewing how staff are recruited, trained and progressed through the ranks to ensure Air Pacifi c has the people skills and resources to meet projected

expansion and increasingly sophisticated IT and service applications.

The cultural survey also identifi ed areas requiring action to turn negative feedback into positive outcomes.

Improvement Teams, headed by GM People, have been established in selected divisions with the aim of generating involvement from the less senior ranks. There is a need to involve everyone in sharing information, contributing suggestions and playing a role so that management is not isolated in the decision-making process.

The crux of the program is to improve communication and provide adequate training so that personnel are better equipped to improve productivity, customer services and streamline operations.

The IPHRIS system was upgraded to refl ect and handle these initiatives with new modules being inserted into the system to help chart and customise career paths for individuals. Performance Management systems were also reviewed to link with productivity-related initiatives.

FALPA, Air Pacifi c’s pilots association, also signed off on a ‘more you work, the more you are paid’ productivity-related agreement. Dialogue is continuing with other unions in order to broker similar initiatives.

The division also supported employees who were in need of urgent overseas medical attention. Employees and management pulled together to create an appeal that raised $100,000 that went towards treatment for two Air Pacifi c staff members.

The closure of the Japan offi ce after more than twenty years involved redundancy packages for station staff compliant with Japanese labour laws. Although diffi cult for all, the redundancy program was successfully concluded without the need for legal or union intervention.

page 15

The January fl oods in Nadi generated a huge groundswell of support from all staff, management and the tourism industry in general with many kind and generous gestures that involved the provision of food, shelter and aid to fl ood victims – many of whom were Air Pacifi c employees.

FREIGHT

Price played a very signifi cant part in Air Pacifi c’s freight strategy during the year. The overall market shrank and was very much price-driven, making generation of a reasonable yield to meet revenue budget a very diffi cult proposition. The continued high price of fuel, low yields and reduction in air-cargo volumes infl uenced the cargo business results.

Following the January 2009 fl oods in Fiji, Air Pacifi c coordinated and donated the cargo space for more than 60 tonnes of relief material being fl own into Fiji. Clothing, footwear, food, tents, water bottles, medical equipment and school supplies arrived from Australia, New Zealand, Japan and North America. These were distributed to charitable organisations and Air Pacifi c staff affected by the fl ooding.

LOGISTICS

At the beginning of the fi nancial year, Air Pacifi c actively sought new contract pilots to meet the forecast demand for increased schedules and to cover operations whilst National pilots underwent progression courses and training, particularly from B737 to B767 and B747 aircraft and from

wide bodied Second Offi cer to B737 First Offi cer roles. At one point, the Company’s pilot register listed fi fty-three expatriate pilots on short-term contracts.

As the global economic situation worsened and fl ights were cut back and aircraft types re-scheduled to match demand, the number of contracted pilots was reduced to a point where less than thirty remained. The Company is still concentrating on fast-tracking local pilots and retaining their services by offering structured succession planning and involving pilots in the progression process.

OPERATIONS

A vast effort went into the IATA Operational Safety Accreditation (IOSA) Audit. Working closely with inspectors and auditors Air Pacifi c’s team carried out amendments to manuals and processes met stringent guidelines on safety and security in order to qualify for this important accreditation. All requirements were met by the September 2008 deadline.

Procedures for pilots and engineering have also been fi ne tuned under the LOSA (Line Operations Safety Audit) Program where data on fl ight operations is collected electronically by downloading computer records of fl ights which do not involve training, checking or any other requirements that might cause aircrew to modify their fl ight command behaviour.

Data collected covers take off and landing, fuel burn during fl ight and a host of other safety and performance related issues. This was all part of a concerted effort to focus on safety, quality and security management within the airline. Air Pacifi c employs some of the most advanced and sophisticated safety and security management systems available and to be used effectively they have the total commitment of all staff involved.

“Following the January 2009 fl oods in Fiji, Air Pacifi c coordinated and donated the cargo space for more than 60 tonnes of relief material

being fl own into Fiji.”


ENGINEERING & MAINTENANCE

It was a busy year for Engineering with fi ve major aircraft and engine checks and overhauls and two unscheduled engine changes. Air Pacifi c’s two leased B747 aircraft underwent planned D-Checks in Singapore with each aircraft offl ine for two months (Oct-Nov 2008/Feb-Mar 2009).

In addition, all six CFM56-7B engines on the B737 fl eet underwent scheduled overhauls and Pacifi c Sun’s two ATR42, for which Air Pacifi c handles maintenance and spares control, went to Tahiti for their scheduled C-Checks.

In December 2008 a B737-700 engine experienced abnormal oil consumption in Nadi. With assistance from a Delta engineer who fl ew in from the USA on a freighter with the replacement engine, the changeover was effected within a 48 hour turnaround in Nadi. Thanks to the round-

the-clock efforts of the Engineering team, the aircraft was able to fl y out on its scheduled Sunday service to Christchurch.

Despite these scheduled and unscheduled maintenance issues and the ongoing problem of bird strikes at Nadi Airport (an issue that is still being addressed in consultation with AFL), the airline achieved Technical Dispatch reliability of 98.25% across the Air Pacifi c fl eet and 98.85% for Pacifi c Sun’s ATR fl eet.

Training remains a high priority in Engineering with the continuous migration of skilled tradesmen. The vacant Manager Aircraft Maintenance position provided an opportunity to develop four local engineers by rotating them through the position to provide valuable managerial experience.

CUSTOMER RELATIONS & SERVICE

Customer Service continues to be the central focus for the division, which underwent re-structuring at the end of the fi nancial year when responsibility for Airports was added to the Customer Relations, Cabin Crew and Catering portfolio.

Buoyed by the positive results of the IOSA Audit, CR&S conducted a series of training workshops and courses involving cabin crew aimed at service elements such as grooming, food/wine knowledge, infl ight service refi nements, addressing passengers and knowledge of infl ight supplies. Two external trainers were brought in to conduct these courses.

The division now meets monthly with ATS Catering Centre to review operations and to plan the two-monthly meal cycle change. In an effort to optimise service delivery, bi-monthly ‘snap audits’ are conducted infl ight with customer and cabin crew feedback used to institute changes and improvements.

page 17

Project SabetoThis ambitious corporate undertaking involves all divisions in a review of the airline’s brand, service style and delivery and airports customer services designed to lift the airline’s presentation to meet customer expectations identifi ed through research.

Airport presentation and effi ciency was one of the fi rst areas to be addressed with Nausori Airport offi ce and the Tabua Club lounge in Nadi Airport both undergoing major facelifts.

Improved customer service handling at Nadi is being addressed in consultation with ATS personnel.

PACIFIC SUN

Air Pacifi c’s domestic and regional subsidiary continues to expand rapidly. With the benefi t of two years’ operational experience behind it, Pacifi c Sun is growing steadily in confi dence and performance, with the addition of extra services on popular domestic routes plus the opening of new ports in Fiji and throughout the region. Starting with a staff complement of 130 in February 2007, the airline now has over 170 employees, sixty of whom are pilots with twenty of those employed on the popular ATR42.

This growth is refl ected in the number of passengers carried – increasing from just 4,000 per month on startup to an average of around 18,000 in 2008/09. The airline now operates up to eight ATR42 Suva-Nadi services a day, with a second hub being established out of Suva to service Savusavu, Taveuni and Kadavu. In March 2009, new services began operating between Suva and Levuka and from Nadi and Suva to Taunovo Bay once daily.

Charters were also operated to the new 7-star resort on the island of Laucala and to Taunovo Bay Airport in Deuba to service the Royal Davui and Taunovo Bay resorts.

When Savusavu Airport closed in July 2008, Pacifi c Sun introduced direct daily Nadi-Labasa ATR42 fl ights. Following the re-opening of Savusavu in December 2008, these direct Labasa fl ights were retained in addition to twice daily (plus a third service on weekends) Suva – Labasa ATR42 fl ights. The domestic network will expand further with licences approved to Cicia, Vanuabalavu and Rotuma. As part of future plans, Pacifi c Sun looks forward to an upgraded Rotuma Airport capable of accepting ATR aircraft and serviced by Government as a Customs Entry point for traffi c from Tuvalu. Underpinning this growing frequency and establishment of new ports is the seamless integration and connections offered to arriving Air Pacifi c international passengers. Holiday makers can now book international point to domestic point connecting fl ights through links to Air Pacifi c’s online booking engine. The introduction of e-ticketing in Fiji has generated increased support with all domestic ports now linked.

The next phase will see local hotels and resorts being able to access the booking engine to make reservations for guests.

“Pacifi c Sun is ever-mindful of its commitment to provide a safe, comfortable and on-time

fl ying experience for passengers throughout its expanding domestic

and regional network.”


The airline was also involved in destination-based tactical advertising campaigns for Fiji during the year, further reinforcing the seamless booking benefi ts to holiday makers. On the regional side, the creation of a regional South Pacifi c network using Pacifi c Sun to connect with north and southbound international traffi c into Nadi, is gathering momentum. In addition to increased services to existing destinations of Tonga and Port Vila, a new twice-weekly ATR service to Funafuti was launched in August 2008. This service has been very well received with an additional weekly fl ight added in peak periods. During the year, Pacifi c Sun took over passenger check-in functions at Nadi. Capabilities for limited avionics work in-house are being developed with on-the-job training. Two engineers were sent to Air Pacifi c for engine monitoring training and another engineer to Pratt & Whitney to gain experience on Cessna engines.

Fuel costs continue to be a challenge, consuming 30% of the airline’s overheads. This makes the maintenance of affordable air fare initiatives like the ‘Red Eye’ and ‘Companion’ fares, aimed at stimulating demand in light traffi c periods, that much more diffi cult. Pacifi c Sun outsources its IT requirements to Air Pacifi c who act as a Bureau Centre for the airline. All Pacifi c Sun domestic airports within Fiji and throughout the region are electronically linked to Pacifi c Sun head offi ce, which in turn links into the Air Pacifi c system.

While growing its business is a key priority, Pacifi c Sun is ever-mindful of its commitment to provide a safe, comfortable and on-time fl ying experience for passengers throughout its expanding domestic and regional network.

page 19

Wings of HopeThis community based project that starts with the ‘Cash for Kids’ envelope collection on board all fl ights is now well established and provides much needed support to children’s charities, schools and organisations in Fiji.

The committee undertook fi ve major projects this year including supply of generators and offi ce equipment, building renovation and installation of bores in rural area schools, and the donation of mini buses to The Hilton Special School and the Treasure Home Orphanage. All these projects were carried out by Air Pacifi c staff volunteering their own time and energy.

page 19

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financial statements and reports

Directors’ Report 22

Independent Auditors’ Report 23

Income Statements 24

Statements of Changes in Equity 25

Balance Sheets 26

Statements of Cash Flows 27

Notes to and Forming Part of 28the Financial Statements


The Directors of Air Pacifi c Limited (the Company) present their report together with the fi nancial statements of Air Pacifi c Group (“the Group”) being the Company and its controlled and jointly controlled entities for the year ended 31 March 2009 as set out on pages 24 to 49 and the auditors’ report thereon in accordance with the Companies Act 1983.

DirectorsThe Directors of the Company at the date of this report are:

Nalin Patel – Chairman John Campbell Charles Harvey Paul Edwards Aslam Khan Simon Hickey Narendra Kumar Bernadette Rounds Ganilau Isikeli Waqa

State of AffairsIn the opinion of the directors:

(i) the accompanying Income Statements, Statements of Changes in Equity and Statements of Cash Flows are drawn up so as to give a true and fair view of the results and cash fl ows of the Group and the Company for the year ended 31 March 2009.

(ii) the accompanying Balance Sheets are drawn up so as to give a true and fair view of the state of affairs of the Group and the Company as at 31 March 2009.

Principal ActivityThere has been no material change in the nature of the Group’s or Company’s business or in the classes of business in which the Group or Company has an interest. The Company has a 100% ownership interest in Fiji Airlines Limited. The principal activity of Fiji Airlines Limited is the provision of domestic and regional air transport services.

The Company has a 38.75% interest in Richmond Limited. The principal activity of Richmond Limited is the ownership of the Sofi tel Fiji Resort & Spa at Denarau Island in Nadi.

Operating ResultsThe operating loss of the Group after income tax benefi t of $7.133M (2008: expense of $13.186M) for the year ended 31 March 2009 was $7.170M (2008: profi t of $24.964M).

The operating loss of the Company after income tax benefi t of $7.066M (2008: expense of $12.566M) for the year ended 31 March 2009 was $5.178M (2008: profi t of $28.527M).

ReservesAn amount of $43.5M (2008: $Nil) has been charged to Shareholders’ Equity as Hedge Reserve.

DividendsThe Directors recommend that no dividend be paid (2008: 47.75 cents per share, $12.459M)

Events Subsequent to Balance DateOn 15 April 2009, the Reserve Bank of Fiji devalued the Fiji Dollar by 20 percent. No adjustment has been made in respect of this in the fi nancial statements for the year ended 31 March 2009. The general effect of the devaluation would include a likely increase in future revenue, an increase in future costs of operations denominated in foreign currencies in Fiji Dollar terms and increases in Balance Sheet items denominated in foreign currencies.

Dated at Nadi this 25th day of September, 2009.

Signed in accordance with a resolution of the Directors.

Nalin Patel John CampbellDIRECTOR DIRECTOR

Air Pacifi c Group

Directors’ Report for the Year Ended 31 March 2009

page 23

Air Pacifi c Group

Independent Auditors’ Report to the Members of Air Pacifi c

ScopeWe have audited the fi nancial statements of Air Pacifi c Limited and of the Group (comprising the consolidated fi nancial statements of the Company and its controlled entity) for the year ended 31 March 2009, consisting of the Income Statements, Statements of Changes in Equity, Balance Sheets, Statements of Cash Flows and accompanying notes, set out on pages 24 to 49. The Company’s directors are responsible for the preparation and presentation of the fi nancial statements and the information they contain. We have conducted an independent audit of these fi nancial statements in order to express an opinion on them to the members of the Company.

Our audit has been conducted in accordance with Fiji Standards on Auditing to provide reasonable assurance as to whether the fi nancial statements are free of material misstatement. Our procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the fi nancial statements, and the evaluation of accounting policies and signifi cant accounting estimates. These procedures have been undertaken to form an opinion as to whether, in all material respects, the fi nancial statements are presented fairly in accordance with International Financial Reporting Standards and statutory requirements so as to present a view which is consistent with our understanding of the Company’s and the Group’s fi nancial positions and the results of their operations and their cash fl ows.

The audit opinion expressed in this report has been formed on the above basis.

Audit opinionIn our opinion:

(a) proper books of account have been kept by the Company, so far as it appears from our examination of those books, and

(b) the accompanying fi nancial statements of the Company and the Group which have been prepared in accordance with International Financial Reporting Standards:

(i) are in agreement with the books of account;

(ii) to the best of our information and according to the explanations given to us:

(a) give a true and fair view of the state of affairs of the Company and the Group as at 31 March 2009 and of the results, changes in equity and cash fl ows of the Company and the Group for the year then ended;

(b) give the information required by the Companies Act 1983 in the manner so required.

We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit.

25th September, 2009 KPMGNadi, Fiji Islands Chartered Accountants


Air Pacifi c Group

Income Statements for the Year Ended 31 March 2009

2009 2008 2009 2008

Note $’000 $’000 $’000 $’000 Revenue 3 648,471 558,422 622,787 542,842 Staff & Related Costs 4 65,930 57,855 59,509 52,807 Operations 5 166,565 173,477 163,022 171,230 Selling & Marketing 36,218 37,763 35,277 37,175 Fuel 305,515 177,191 297,725 171,339 Depreciation & Amortisation 10 22,887 20,797 17,739 17,393 Impairment Losses 5 1,133 453 - 2,000 Administrative Expenses 5 56,809 67,516 54,747 65,569 Share of Net Loss of Jointly Controlled Entity 12 89 218 - - 655,146 535,270 628,019 517,513 (Loss)/Profi t From Operations (6,675) 23,152 (5,232) 25,329 Finance Income 6 5,148 18,303 5,764 19,069 Finance Expenses 6 (12,776) (3,305) (12,776) (3,305)Net Finance (Expense)/Income 6 (7,628) 14,998 (7,012) 15,764 Operating (Loss)/Profi t Before Income Tax (14,303) 38,150 (12,244) 41,093 Income Tax (Benefi t)/Expense 7 (7,133) 13,186 (7,066) 12,566 Operating (Loss)/Profi t After Income Tax (7,170) 24,964 (5,178) 28,527 Basic Earnings Per Share 17 (0.27) 0.96 (0.20) 1.09 Diluted Earnings Per Share 17 (0.27) 0.96 (0.20) 1.09

Air Pacifi c Group Air Pacifi c Ltd

The Income Statements are to be read in conjunction with the Notes to and Forming Part of the Financial Statements set out on pages 28 to 49.

page 25

Air Pacifi c Group

Statements of Changes in Equity For the Year Ended 31 March 2009

Air Pacifi c Group Share Capital Hedge Retained Total Reserve Earnings $’000 $’000 $’000 $’000

Balance at 1 April 2007 26,093 - 123,182 149,275 Operating Profi t after Income Tax - - 24,964 24,964 Dividends Declared (47.75 cents per share) - - (12,459) (12,459)

Balance at 31 March 2008 26,093 - 135,687 161,780

Balance at 1 April 2008 26,093 - 135,687 161,780 Changes in fair value of cash fl ow hedges - (61,272) - (61,272)Tax effect of fuel hedge reserve - 17,769 - 17,769Operating Loss after Income Tax - - (7,170) (7,170)

Balance at 31 March 2009 26,093 (43,503) 128,517 111,107

Air Pacifi c Limited Share Capital Hedge Retained Total Reserve Earnings $’000 $’000 $’000 $’000

Balance at 1 April 2007 26,093 - 129,993 156,086Operating Profi t after Income Tax - - 28,527 28,527 Dividends Declared (47.75 cents per share) - - (12,459) (12,459)

Balance at 31 March 2008 26,093 - 146,061 172,154

Balance at 1 April 2008 26,093 - 146,061 172,154Changes in fair value of cash fl ow hedges - (61,272) - (61,272)Tax effect of fuel hedge reserve - 17,769 - 17,769Operating Loss after Income Tax - - (5,178) (5,178)

Balance at 31 March 2009 26,093 (43,503) 140,883 123,473

The Statements of Changes in Equity are to be read in conjunction with the Notes to and Forming Part of the Financial Statements set out on pages 28 to 49.


2009 2008 2009 2008

Note $’000 $’000 $’000 $’000

Current Assets Cash & Cash Equivalents 8 15,292 31,020 14,726 29,320Term Deposits 8 76,316 197,988 76,316 197,988Income Tax Refund 7(c) 1,197 - 1,170 -Trade & Other Receivables 9 117,526 57,482 112,301 54,473General Inventories 1,105 597 1,005 554Total Current Assets 211,436 287,087 205,518 282,335

Non-Current AssetsAircraft, Property, Plant & Equipment 10 171,581 187,511 139,203 154,578Other Deposits 45,450 36,934 45,450 36,934Advance to Related Parties 11 872 819 45,760 42,631Investments 12 15,893 15,982 17,915 17,915Deferred Tax Asset 7(b) 27,793 7,198 28,373 7,818Total Non-Current Assets 261,589 248,444 276,701 259,876

Total Assets 473,025 535,531 482,219 542,211

Current LiabilitiesBorrowings 13 23,775 - 23,775 -Lease Liability 14 19,776 15,519 19,776 15,519Trade Creditors & Accrued Expenditure 134,916 151,970 131,950 148,590Revenue Recieved in Advance 35,088 75,258 35,088 75,116Other Financial Liability 61,272 - 61,272 -Income Tax Payable 7(c) - 14,807 - 14,807Employee Benefi ts 15 6,228 4,088 6,220 4,079Provisions 16 1,068 6,037 1,068 6,037Dividends Payable - 12,459 - 12,459Total Current Liabilities 282,123 280,138 279,149 276,607

Non-Current LiabilitiesLease Liability 14 23,225 35,641 23,225 35,641Deferred Tax Liability 7(b) 38,452 41,520 38,452 41,520Employee Benefi ts 15 3,032 4,033 2,834 3,870Provisions 16 15,086 12,419 15,086 12,419Total Non-Current Liabilities 79,795 93,613 79,597 93,450

Total Liabilities 361,918 373,751 358,746 370,057Net Assets 111,107 161,780 123,473 172,154

Shareholders’ EquityShare Capital 17 26,093 26,093 26,093 26,093Hedge Reserve 17 (43,503) - (43,503) -Retained Earnings 128,517 135,687 140,883 146,061Total Shareholders’ Equity 111,107 161,780 123,473 172,154

Commitments and Contingent Liabilities 19/18

Signed in accordance with a resolution of the Board

Nalin Patel John CampbellDIRECTOR DIRECTOR


The Balance Sheets are to be read in conjunction with the Notes to and Forming Part of the Financial Statements set out on pages 28 to 49

Air Pacifi c Group

Balance Sheets ss at 31 March 2009

page 27

Air Pacifi c Group

Statements of Cash Flows for the Year Ended 31 March 2009

2009 2008 2009 2008

Note $’000 $’000 $’000 $’000

Cash Flows from Operating Activities Receipts in the Course of Operations 612,414 581,658 588,523 567,620 Payments in the Course of Operations (724,140) (501,464) (701,889) (484,872)Interest Received 5,491 17,188 5,491 17,188 Income Taxes Paid (14,765) (6,377) (14,765) (6,377)Interest Paid 6 (2,795) (3,305) (2,795) (3,305)Net Cash (Used In)/Provided by Operating Activities (123,795) 87,700 (125,435) 90,254 Cash Flows from Investing Activities Advance to Fiji Airlines Limited (subsidiary) - - (6,676) (10,281)Repayment of Advance - Fiji Airlines Limited (subsidiary) - - 3,600 2,700 Transfer of Funds to Term Deposits (76,316) (197,988) (76,316) (197,988)Proceeds from Term Deposits 197,988 156,109 197,988 156,109 Payments for Property, Plant & Equipment 10 (8,316) (10,038) (2,398) (6,533)Proceeds from Disposal of Property, Plant & Equipment 238 60 170 55 Net Cash Provided By/(Used In) Investing Activities 113,594 (51,857) 116,368 (55,938) Cash Flows from Financing Activities Proceeds from Borrowings 23,775 - 23,775 - Repayments of Lease (16,843) (15,234) (16,843) (15,204)Dividend Paid (12,459) (3,914) (12,459) (3,914)Net Cash (Used In) Financing Activities (5,527) (19,148) (5,527) (19,118) Net (Decrease)/Increase in Cash and Cash Equivalent Held (15,728) 16,695 (14,594) 15,198 Cash & Cash Equivalents at the Beginning of theFinancial Year 31,020 14,325 29,320 14,122 Cash & Cash Equivalents at the End of theFinancial Year 8 15,292 31,020 14,726 29,320


The Statements of Cash Flows are to be read in conjunction with the Notes to and Forming Part of the Financial Statements set out on pages 28 to 49.


Air Pacifi c Group

Notes to and Forming Part of the Financial Statements for the Year Ended 31 March 2009

Air Pacifi c Limited (the ‘Company’) is a public company domiciled in the Fiji Islands. The consolidated Financial Statements for the period ended 31 March 2009 comprises the Company and its controlled entity. In addition, the Company’s interest in its jointly controlled entity is brought to account in the consolidated fi nancial statements using equity accounting (these entities are together are referred to as the Group).

The principal business of the Company is to provide air transport services. The principal activity of controlled entity,

Fiji Airlines Limited, is the provision of domestic and regional air transport services.

The operations of the jointly controlled entity, Richmond Limited, are in the hotel industry and are set out in Note 12. The principal assets are located at Nadi, Fiji Islands.

The fi nancial statements were approved by the Board of Directors on 25th September, 2009.

2. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation The fi nancial statements have been prepared on a historical cost basis except where stated. The accounting

policies have been consistently applied by the Group and the Company, unless otherwise stated.

The fi nancial statements are presented in Fiji Dollars and all values are rounded to the nearest thousand dollars ($’000) unless otherwise stated.

(b) Statement of Compliance The fi nancial statements have been prepared in accordance with International Financial Reporting Standards

(IFRS) adopted by International Accounting Standards Board and the requirements of the Laws of Fiji.

(c) Use of Estimates and Judgments The preparation of fi nancial statements requires management to make judgments, estimates and assumptions

that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future period affected.

In particular, information about signifi cant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most signifi cant effect on the amounts recognised in the fi nancial statements are described in the following notes:

• Note 2 (h) - Depreciation • Note 2 (i) - Aircraft/Engine Overhaul • Note 2 (k) - Trade Receivables • Note 2 (m) - Employee Benefi ts • Note 2 (o) - Impairment • Note 2 (p) - Trade Creditors & Accrued Expenditure • Note 2 (s) - Income Tax

(d) Principles of Consolidation The consolidated Financial Statements comprise the fi nancial statements of the Company, its controlled

entity (Fiji Airlines Limited) and its interest in the jointly controlled entity (Richmond Limited).

Controlled Entity The controlled entity (Fiji Airlines Limited), in which the Company holds a 100% interest, is consolidated.

The consolidation process eliminates intercompany balances, transactions, income and expenses.

Jointly Controlled Entity The jointly controlled entity is an entity over which the Company exercises signifi cant infl uence or is

jointly controlled. In the consolidated fi nancial statements, the investment in the jointly controlled entity is accounted for using equity accounting principles and the Company’s share of the jointly controlled entity’s net profi t or loss is recognised in the consolidated Income Statement.

1. REPORTING ENTITY

page 29

Air Pacifi c Group


(e) Foreign Currency Transactions Foreign currency transactions are translated to Fiji dollars at the rates of exchange published by the

International Air Transport Association (IATA) at transaction date.

In respect of aircraft, property, plant and equipment and revenue received in advance the values calculated at transaction date are not adjusted at balance date to refl ect exchange rates then applying.

Foreign currency borrowings and lease liabilities are translated to Fiji dollars at the bank exchange rates ruling at balance date. Other foreign currency assets and liabilities are adjusted by applying the IATA rate ruling at balance date.

Exchange differences are brought to account in the Income Statement as exchange gains or losses in the fi nancial year in which the exchange rates change.

(f) Earnings per Share The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS

is calculated by dividing the profi t or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is calculated in the same manner as there are no ordinary shares that are considered diluted.

(g) Aircraft, Property, Plant & Equipment Items of aircraft, property, plant and equipment are recorded at cost and depreciated or amortised on a

straight line basis at rates estimated to write off the cost less residual value over the useful life of each class of asset.

(h) Depreciation Depreciation is charged to the Income Statement on a straight line basis at rates estimated to write off

the cost less residual value over the useful life of each class of asset. The estimated useful lives of aircraft, property, plant and equipment for depreciation purposes are:

Aircraft and Spares:

- B737-700/800 Aircraft & Spares: 15 years. Residual value being 25% of cost. - B737-700/800 Engines: 11 years. Residual value being 25% of cost. - B737-700/800 Maintenance & Overhaul: Period to next scheduled maintenance - B767 Spares: 15 years. Residual value being 20% of cost. - ATR42-500: 10 years. Residual value being 10% of cost. - Twin Otters and Islanders: Based on actual fl ying hours.

Other:

- Plant and Equipment: 3 to 10 years - Motor Vehicles: 4 years - Buildings - Concrete: 80 years - Wooden: 40 years Buildings are depreciated at the above rates or over the period of the relevant land lease whichever is the

shorter. (i) Aircraft/Engine Overhaul For aircraft under operating lease where there is a contractual obligation to undertake overhauls, provisions

are made for the future expected cost of major airframe and engine overhauls equal to the expected cost per fl ight hour of such overhauls in respect of fl ight hours since acquisition or the previous overhaul.

For aircraft owned or under fi nance lease, costs incurred in respect of heavy maintenance and overhaul of aircraft engines and airframes are capitalised and depreciated over the period to the next scheduled maintenance. Other non-heavy maintenance and overhaul costs are charged to the Income Statement on consumption or as incurred.


Air Pacifi c Group


(j) Leased Assets Finance Leases Assets acquired under fi nance lease are included as non-current assets in the balance sheet. Leased assets are

recognised at the present value of the minimum lease payments and amortised on a straight-line basis to the estimated residual value over the expected useful life of the asset. A corresponding liability is also established and each lease payment is allocated between the liability and fi nance charges.

Operating Leases Operating lease rentals are included in the determination of the operating profi t or loss for the year in

accordance with the contractual lease payment obligations.

(k) Trade Receivables Trade receivables are recorded at cost less impairment losses.

(l) General Inventories General inventories are valued at the lower of cost (calculated using a weighted average formula or fi rst in

fi rst out principle) and net realisable value and includes expenditure incurred in acquiring the inventories and bringing them to their existing condition and location.

(m) Employee Benefi ts Contributions are paid to the Fiji National Provident Fund or equivalent schemes overseas on behalf of

employees to secure retirement benefi ts. Costs are included in the Income Statement.

Outstanding annual leave and long service liabilities due to employees at balance date are brought to account based on current legal and contractual obligations.

Provision is made for the future expected retirement and long service leave benefi ts based on current contractual obligations by applying an actuarial calculation.

(n) Cash & Cash Equivalents Cash & cash equivalents comprise cash at bank and on hand for the purposes of the Statement of Cash

Flows.

(o) Impairment The carrying amounts of the Group’s and Company’s assets are reviewed at each balance sheet date to

determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognised in the Income Statement.

(p) Trade Creditors & Accrued Expenditure Trade creditors & accrued expenditure are stated at their cost.

(q) Revenue Passenger and freight sales are recorded as ‘revenue received in advance’ and transferred to revenue earned

when the service is performed. Passenger and freight sales are included in the Income Statement net of sales discounts. Agents’ commission is included as sales and marketing expense and is recognised on the same basis as revenue.

Where services sold are not availed within the following periods, the sales values are transferred to revenue: - ‘BULA’ fare tickets subject to conditions 6 months - other passenger services 18 months - cargo services 12 months

In the current year, the Company has changed the revenue recognition for the “other passenger services” category from 24 months to 18 months.

(r) Finance Income & Expenses Finance income & expenses comprise interest income on funds invested, interest on borrowings and foreign

exchange gains & losses.

(s) Income Tax Income tax expense comprises current and deferred tax. Income tax expense is recognised in the Income

Statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

page 31

Air Pacifi c Group


Current tax is the expected tax payable on the taxable income for the year, using tax rates at the reporting date.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the

carrying amounts of assets and liabilities for fi nancial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

A deferred tax asset is recognised to the extent that it is probable that future taxable profi ts will be available against which the temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefi t will be realised.

(t) Derivative Financial Instruments Derivative Financial Instruments are used to hedge fuel prices. These are recognised at fair value both

initially and on an ongoing basis. Transaction costs attributable with the hedges are recognised in the income statement when incurred.

Air Pacifi c Group designates fuel hedges as a hedge of highly probable forecast transactions (cash fl ow hedges). Gains and losses qualifying for hedge accounting are recognised in the same Income Statement category as the underlying hedge instrument.

Cash Flow Hedges The effective portion of the changes in fair value of the hedges that qualify for cash fl ow hedges are

recognised in equity in the hedge reserve. Amounts accumulated in the hedge reserve are recognised in the Income Statement in the periods when the hedged item will affect profi t and loss.

(u) Comparatives Certain comparatives fi gures have been reclassifi ed to conform with current year presentation.

3. REVENUE

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Passenger 460,695 384,145 436,810 368,730 Capacity Seat Sale 126,299 111,329 126,299 111,329 Cargo & Mail 41,458 38,914 41,141 38,638 Others Charters 2,729 6,221 2,426 6,052 (Loss)/Gain on Disposal of Assets 12 (8) 136 15 Sundry Income Related Parties - Fiji Airlines Limited (controlled entity) - - 1,311 1,309 - Richmond Limited (jointly controlled entity) 30 35 30 35 Other Parties 17,248 17,786 14,634 16,734 648,471 558,422 622,787 542,842


In 2009, an amount of $2.8M is included in Passenger Revenue for the Group and the Company due to a change in accounting estimate for the timing of recognition as revenue for unavailed passenger services and other charges.


Air Pacifi c Group


4. STAFF & RELATED COSTS

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Included in Staff & Related Costs are the following items: Key Management Compensation - Short Term Benefi ts 3,281 3,389 2,555 2,748 - Other Long Term Benefi ts 527 546 455 494 Employee Benefi ts 3,726 2,665 3,548 2,592 Superannuation Contributions 3,511 3,345 3,276 3,154 The average staff strength for the Group was 966 (2008: 959) and for the Company was 803 (2008: 804).

5. EXPENSES Operations Operating Lease Rentals and related costs Related Parties - Fiji Airlines Limited (controlled entity) - - 3,949 3,225 Other Parties 56,477 49,887 56,081 49,586 Airport Related Costs 56,981 57,734 55,785 57,001 Engineering and Maintenance 53,107 65,856 47,207 61,418 166,565 173,477 163,022 171,230

Administrative Expenses Included in the Administrative Expenses are the following items: Directors’ Fees 161 157 161 157 Auditors - Remuneration 58 51 38 38 - Other Services 74 43 69 41 Bad Debts Written Off 52 675 52 669 Allowance for Uncollectability 30 227 30 227 Operating Lease Rentals 1,484 1,480 1,422 1,422 Exchange (Gains)/Losses (5,715) 5,863 (5,801) 5,863

Impairment Losses Impairment Loss – Aircraft (Note 10) 1,133 - - - Impairment Loss – Goodwill - 453 - 2,000 1,133 453 - 2,000


page 33

Air Pacifi c Group


6. FINANCE INCOME & EXPENSES

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Finance Income Interest Income Related Parties - Fiji Airlines Limited (controlled entity) - - 616 771 - Richmond Limited (jointly controlled entity) 53 50 53 50 Other Parties 5,095 11,776 5,095 11,776 Unrealised Exchange Gains - 5,156 - 5,156 Realised Exchange Gains - 1,321 - 1,316 Total Finance Income 5,148 18,303 5,764 19,069 Finance Expense Interest Expense Other Parties (2,795) (3,305) (2,795) (3,305) Unrealised Exchange Losses (7,359) - (7,359) - Realised Exchange Losses (2,622) - (2,622) - Total Finance Expenses (12,776) (3,305) (12,776) (3,305) Net Finance (Expense)/Income (7,628) 14,998 (7,012) 15,764

7. TAXATION

(a) Income Tax (Benefi t)/Expense recognised in the Income Statement Current Tax (Benefi t)/Expense (1,239) 19,913 (1,212) 19,913 Deferred Tax (Benefi t) (5,894) (6,727) (5,854) (7,347) Income Tax (Benefi t)/Expense (7,133) 13,186 (7,066) 12,566 Reconciliation of effective tax rate Income Tax at 31% (2008: 31%) (4,434) 11,825 (3,796) 12,739 Non-deductible Expenses 278 227 (75) 19 Other (1,016) 1,134 (1,275) (192) Effect of change in tax rate (1,961) - (1,920) - (7,133) 13,186 (7,066) 12,566



Air Pacifi c Group


7. TAXATION (Continued)


2009 2008 2009 2008

$’000 $’000 $’000 $’000 (b) Deferred Tax Asset and Liability (i) Recognised Deferred Tax Asset Employee Benefi ts 2,625 2,464 2,625 2,464 Allowance for Uncollectability 580 611 580 611 Provisions 4,685 5,721 5,265 6,341 Fuel Hedge Reserve 17,769 - 17,769 - Unrealised Exchange Loss/(Gain) 2,134 (1,598) 2,134 (1,598) 27,793 7,198 28,373 7,818

A potential deferred tax asset totalling $3.310M (2008: $3.055M) in respect of tax losses not brought to account by the controlled entity will only be obtained if: (i) the controlled entity derives the future assessable income of a nature and an amount suffi cient to enable the benefi t to be realised; (ii) the controlled entity continues to comply with the conditions for deductibility imposed by law; and (iii) no changes in tax legislation adversely affect the controlled entity in realising the benefi t.

(ii) Recognised Deferred Tax Liability Property, Plant & Equipment 36,769 43,316 36,769 43,316 Unrealised Currency Gain/(Loss) 1,683 (1,796) 1,683 (1,796) 38,452 41,520 38,452 41,520 Net Deferred Tax (Liability) (10,659) (34,322) (10,079) (33,702)

page 35

Air Pacifi c Group Balance Recognised Recognised Balance 1 April 07 in Income in Equity 31 March 2008 $’000 $’000 $’000 $’000

Property, Plant & Equipment (47,135) 3,819 - (43,316) Employee Benefi ts 2,337 127 - 2,464 Allowance for Uncollectability 540 71 - 611 Provisions 4,310 1,411 - 5,721 Unrealised Exchange (Gain)/Loss (1,101) 1,299 - 198 (41,049) 6,727 - (34,322)

Air Pacifi c Group Balance Recognised Recognised Balance 1 April 08 in Income in Equity 31 March 2009 $’000 $’000 $’000 $’000

Property, Plant & Equipment (43,316) 6,547 - (36,769) Employee Benefi ts 2,464 161 - 2,625 Allowance for Uncollectability 611 (31) - 580 Provisions 5,721 (1,036) - 4,685 Fuel Hedge Reserve - - 17,769 17,769 Unrealised Exchange Loss 198 253 - 451 (34,322) 5,894 17,769 (10,659)

Air Pacifi c Limited Balance Recognised Recognised Balance 1 April 07 in Income in Equity 31 March 2008 $’000 $’000 $’000 $’000

Property, Plant & Equipment (47,135) 3,819 - (43,316) Employee Benefi ts 2,337 127 - 2,464 Allowance for Uncollectability 540 71 - 611 Provisions 4,310 2,031 - 6,341 Unrealised Exchange (Gain)/Loss (1,101) 1,299 - 198 (41,049) 7,347 - (33,702)

Air Pacifi c Limited Balance Recognised Recognised Balance 1 April 08 in Income in Equity 31 March 2009 $’000 $’000 $’000 $’000

Property, Plant & Equipment (43,316) 6,547 - (36,769) Employee Benefi ts 2,464 161 - 2,625 Allowance for Uncollectability 611 (31) - 580 Provisions 6,341 (1,076) - 5,265 Fuel Hedge Reserve - - 17,769 17,769 Unrealised Exchange Loss 198 253 - 451 (33,702) 5,854 17,769 (10,079)

Air Pacifi c Group


7. TAXATION (Continued)

(iii) Movement in Temporary Differences during the Year


Air Pacifi c Group


7. TAXATION (Continued) (c) Income Tax (Refund)/Payable

2009 2008 2009 2008

$’000 $’000 $’000 $’000 Balance at 1 April 14,807 1,271 14,807 1,271 Income Tax Paid (14,765) (6,377) (14,765) (6,377) Current Income Tax 3 20,105 30 20,105 Over Provision in prior year (1,242) (192) (1,242) (192) Balance at 31 March (1,197) 14,807 (1,170) 14,807

8. CASH & SHORT TERM DEPOSITS

Cash & Cash Equivalents 15,292 31,020 14,726 29,320 Term Deposits 76,316 197,988 76,316 197,988 91,608 229,008 91,042 227,308

The average interest rate on term deposits in 2009 was 2.8 percent (2008: 5.2 percent). The deposits had an average maturity of 187 days (2008: 226 days).

9. TRADE & OTHER RECEIVABLES

Trade Receivables Related Parties - Richmond Limited (jointly controlled entity) 3 3 3 3 Other Parties 25,991 30,451 21,778 27,817 Allowance for Uncollectability (2,149) (2,119) (1,999) (1,969) 23,845 28,335 19,782 25,851 Other Receivables 93,681 29,147 92,519 28,622 117,526 57,482 112,301 54,473


page 37

10. AIRCRAFT, PROPERTY, PLANT & EQUIPMENT

Air Pacifi c Group Aircraft Aircraft Plant Land & Total - Leased & Spares Equipment Buildings Owned & Vehicles $’000 $’000 $’000 $’000 $’000

Cost Balance at 1 April 2008 269,911 20,793 16,638 23,838 331,180 Acquisitions 5,646 704 1,944 22 8,316 Disposals (243) - (892) - (1,135) Balance at 31 March 2009 275,314 21,497 17,690 23,860 338,361

Depreciation, Amortisation & Impairment Balance at 1 April 2008 111,746 10,782 12,870 8,271 143,669 Depreciation & Amortisation for the year 19,660 1,123 1,511 593 22,887 Impairment Loss 1,133 - - - 1,133 Disposals (63) - (846) - (909) Balance at 31 March 2009 132,476 11,905 13,535 8,864 166,780

Carrying Amount At 1 April 2008 158,165 10,011 3,768 15,567 187,511 At 31 March 2009 142,838 9,592 4,155 14,996 171,581

Air Pacifi c Limited Aircraft Aircraft Plant Land & Total - Leased & Spares Equipment Buildings Owned & Vehicles $’000 $’000 $’000 $’000 $’000

Cost Balance at 1 April 2008 236,123 18,467 16,030 23,203 293,823 Acquisitions - 690 1,708 - 2,398 Disposals - - (871) - (871) Balance at 31 March 2009 236,123 19,157 16,867 23,203 295,350

Depreciation & Amortisation Balance at 1 April 2008 107,686 10,549 12,758 8,252 139,245 Depreciation & Amortisation for the year 15,257 524 1,382 576 17,739 Disposals - - (837) - (837) Balance at 31 March 2009 122,943 11,073 13,303 8,828 156,147

Carrying Amount At 1 April 2008 128,437 7,918 3,272 14,951 154,578 At 31 March 2009 113,180 8,084 3,564 14,375 139,203

Air Pacifi c Group



Air Pacifi c Group


Aircraft Type Valuation Valuation Carrying (Defi cit)/ USD $’000 FJD $’000 Amount Surplus FJD $’000

ATR as at 31 March 2009 14,300 26,581 24,755 1,826 ATR as at 31 March 2008 14,000 21,148 23,120 (1,972) Twin Otters & Islanders as at 31 March 2009 - 6,506 4,573 1,933 Twin Otters & Islanders as at 31 March 2008 - 5,665 6,051 (386)

During the year ended 31st March 2009, an impairment provision of $1,132,518 (2008 : $Nil) was created to refl ect the recoverable or fair values of the Otter and Islander aircraft in the Fleet based on indicative values of the aircraft.

11. ADVANCE TO RELATED PARTIES

2009 2008 2009 2008

$’000 $’000 $’000 $’000 Advance to Fiji Airlines Limited (controlled entity) - - 44,888 41,812 Advance to Richmond Limited (jointly controlled entity) 872 819 872 819 Total Advances to Related Parties 872 819 45,760 42,631

No interest is charged on $8.0M (2008:$8.0M) of the advance to Fiji Airlines Limited. Interest is charged on the balance of the advance at the rate of 2 percent (2008: 2.5 percent). Interest is charged on the Advance to Richmond Limited at the rate of 6.25 percent (2008: 6.25 percent).


Aircraft Market Values The market values of aircraft tend to fl uctuate from year to year. An extended desktop valuation was carried out in

March 2007 by AVITAS on jet aircraft to determine the current market values. As at 31 March 2009 there is a surplus between carrying amount and market values.

Jet Aircraft (B737-700/800) Extended Extended Carrying Surplus/ Valuation Valuation Amount (Defi cit) USD $’000 FJD $’000 FJD $’000 FJD $’000

As at 31 March 2009 69,900 129,932 113,180 16,752 As at 31 March 2008 72,900 110,120 128,437 (18,317)

Valuations of ATR aircraft were obtained using ASCEND market values. There are no published market values for Twin Otter and Islander aircraft. The market values are based on indicative valuations from aircraft vendors overseas.

10. AIRCRAFT, PROPERTY, PLANT & EQUIPMENT (Continued)

page 39

12. INVESTMENTS

2009 2008 2009 2008

$’000 $’000 $’000 $’000 Investment in Jointly Controlled Entity Balance at 1 April 15,982 16,200 17,915 17,915 Share of Losses (89) (218) - - Balance at 31 March 15,893 15,982 17,915 17,915

TOTAL INVESTMENT 15,893 15,982 17,915 17,915

Investment in Jointly Controlled Entity represents the Company’s 38.75% interest in Richmond Limited pursuant to a Shareholders’ Agreement with Colonial Fiji Life Limited. The principal activity of Richmond Limited is the ownership of the Sofi tel Fiji Resort & Spa at Denarau Island in Nadi.

2009 2008 2009 2008

$’000 $’000 $’000 $’000 Investment in Controlled Entity (At Cost) Balance at 31 March - - 2,000 2,000

Impairment Losses Balance at 1 April - - 2,000 - Impairment Losses - - - 2,000 Balance at 31 March - - 2,000 2,000 Carrying Amount at 31 March - - - -

Investment in controlled entity represents 100% shares owned in Fiji Airlines Limited (a company incorporated in Fiji on 27th May 2005 servicing regional and domestic air routes).



Air Pacifi c Group



Air Pacifi c Group


13. BORROWINGS


12. INVESTMENTS (Continued)

Investment in Jointly Controlled Entity (continued) The Company’s 38.75% interest in the jointly controlled entity is shown below:

38.75% 38.75% 2009 2008

$’000 $’000 Current Assets 2,041 2,484 Non-Current Assets 28,841 29,115 Total Assets 30,882 31,599 Current Liabilities 2,139 2,091 Non-Current Liabilities 12,850 13,526 Total Liabilities 14,989 15,617 Net Assets 15,893 15,982 Total Shareholders’ Equity 15,893 15,982 Revenue 10,184 9,846 Hotel Operating Expenses (7,384) (7,017) Net Owners Expenses (1,856) (1,809) Net Finance Costs (1,033) (1,238) Share of Losses in Jointly Controlled Entity (89) (218)

Air Pacifi c Limited and Colonial Fiji Life Limited have provided an unlimited guarantee in respect of Richmond Limited’s borrowing. At 31 March 2009, the borrowing totalled $32.6M (2008: $34.4M)

Air Pacifi c Ltd

2009 2008 2009 2008

$’000 $’000 $’000 $’000 A loan of USD13M was drawn in March 2009 from the ANZ Banking Group Limited for a 12 month period at an interest rate of 4.25%, variable, with the principal repayment due on maturity.

Secured against: Rights and interests on term deposits held by Bank of Baroda, Westpac Banking Corporation and Colonial National Bank totalling FJD29M. 23,775 - 23,775 -

The Company is in breach of a fi nancial covenant in respect of debt service cover ratio with the Bank. The Bank has confi rmed that it does not propose to take any action in respect of the breach.

page 41

Air Pacifi c Group


14. LEASE LIABILITY The fi nance lease liability in respect of B737-700/800 aircraft and motor vehicles are allocated between current and

non-current elements. The principal component of the lease payments due as at the end of the succeeding fi nancial year is shown as current and the remainder of the liability as non-current.

2009 2008 2009 2008

$’000 $’000 $’000 $’000 The future lease payments under fi nance leases are:

Less than one year 21,717 18,000 21,717 18,000 Between one year and fi ve years 24,186 38,046 24,186 38,046 Minimum lease payments 45,903 56,046 45,903 56,046 Deduct: future fi nance charges 2,902 4,886 2,902 4,886 Provided for in the accounts 43,001 51,160 43,001 51,160 Represented by: Current 19,776 15,519 19,776 15,519 Non-Current 23,225 35,641 23,225 35,641 43,001 51,160 43,001 51,160


15. EMPLOYEE BENEFITS

Balance at 1 April 8,121 7,637 7,949 7,538 Provisions made during the year 3,726 2,665 3,548 2,592 Provisions utilised during the year (2,587) (2,181) (2,443) (2,181) Balance at 31 March 9,260 8,121 9,054 7,949

Represented by: Current 6,228 4,088 6,220 4,079 Non-Current 3,032 4,033 2,834 3,870 9,260 8,121 9,054 7,949

Current Employee Benefi ts include annual leave payable and anticipated retirement and long service leave due and payable in the next twelve months.

Non-Current Employee Benefi ts include the balance of retirement and long service leave accruals.

16. PROVISIONS

Aircraft/Engine Overhaul Balance at 1 April 18,456 13,904 18,456 13,904 Provisions made during the year 7,494 12,813 7,494 12,813 Provisions utilised during the year (9,796) (8,261) (9,796) (8,261) Balance at 31 March 16,154 18,456 16,154 18,456

Represented by: Current 1,068 6,037 1,068 6,037 Non-Current 15,086 12,419 15,086 12,419 16,154 18,456 16,154 18,456


2009 2008 Called & Paid-Up Paid-Up Paid Up Capital Capital

Shares % $ $’000 $’000 %

Government of Fiji 13,307,075 51.00 1.00 13,307 13,307 51.00 Qantas Airways Limited 12,084,832 46.32 1.00 12,086 12,086 46.32 Air New Zealand Limited 505,000 1.94 1.00 505 505 1.94 Government of Kiribati 70,400 0.27 1.00 70 70 0.27 Government of Tonga 70,400 0.27 1.00 70 70 0.27 Government of Samoa 32,000 0.12 1.00 32 32 0.12 Government of Nauru 22,800 0.08 1.00 23 23 0.08 26,092,507 100.00 26,093 26,093 100.00

17. SHARE CAPITAL & RESERVES

Earnings per Share (a) Basic earnings per share

2009 2008 2009 2008

$’000 $’000 $’000 $’000 Authorised Share Capital 100,000,000 Shares of $1 each 100,000 100,000 100,000 100,000

Issued and Paid-Up Share Capital Shareholders as at 31 March were:

2009 2008 2009 2008

$’000 $’000 $’000 $’000 Attributable to ordinary shareholders

Net (Loss)/Profi t attributable to ordinary shareholders (7,170) 24,964 (5,178) 28,527 Weighted average number of ordinary shares 26,093 26,093 26,093 26,093 Earnings per Share (0.27) 0.96 (0.20) 1.09

(b) Diluted earnings per Share

Diluted earnings per share is the same as basic earnings per share as there are no ordinary shares that are considered diluted.

Hedge Reserves Other Financial Liability 61,272 - 61,272 - Deferred Tax Asset (17,769) - (17,769) - Balance at 31 March 43,503 - 43,503 -

The hedge reserve comprises the effective portion of the cumulative net change in the fair value of fuel hedging instruments related to hedged transactions that have not yet occurred.



Air Pacifi c Group


page 43

Air Pacifi c Group


18. CONTINGENT LIABILITIES

2009 2008 2009 2008

$’000 $’000 $’000 $’000 Guarantees and letters of credit to support operating lease commitments and other arrangements entered into by the Group and the Company. Bank facilities in respect of the above are secured by a registered mortgage debenture over the Group’s and the Company’s assets. 17,359 14,982 17,359 14,982

The Company will also provide necessary fi nancial support to its controlled entity, Fiji Airlines Limited, in order to fulfi l its debt obligations as and when they are due and payable.

The Group also has provided an unlimited guarantee in respect of Richmond Limited’s borrowings as described in Note 12.

19. COMMITMENTS

As at balance date the Group and the Company had the following commitments. These commitments are not provided for in the fi nancial statements.

(a) The Group and the Company had entered into a nine year operating lease agreement for a Boeing 767-300 Extended Range aircraft effective September 1994 and exercised an extension for a further four years.

The lease has been further extended to March 2012 with an option for a 6 month early termination.

(b) The Group and the Company entered into fi ve year operating leases for two Boeing 747-400 aircraft with effect from April and June 2003. This has now been extended to July and November 2013 with two 1 year extension options.

(c) The following is a summary of future operating lease commitments for aircraft and properties payable by the Group and the Company translated (where applicable) at exchange rates prevailing at balance date:


2009 2008 2009 2008

$’000 $’000 $’000 $’000 Less than one year 39,377 34,105 38,954 33,789 Between one and fi ve years 109,031 62,495 107,853 61,317 Later than fi ve years 15,159 14,010 14,821 13,646 163,567 110,610 161,628 108,752

(d) The Group and the Company entered into a Purchase Agreement with the Boeing Company for the acquisition

of eight Boeing 787-9X2 aircraft. The scheduled delivery dates are one (1) each in March/September 2014, one (1) in June & two (2) in September 2015, two (2) in March 2019 & one (1) in December 2019.

(e) The following is a summary of future capital commitments for aircraft and properties payable by the Group and the Company translated (where applicable) at exchange rates prevailing at balance date:

Between one and fi ve years 665,721 1,690,900 665,721 1,690,900 Later than fi ve years 2,876,744 1,187,069 2,876,744 1,187,069 3,542,465 2,877,969 3,542,465 2,877,969



2009 2008 2009 2008

$’000 $’000 $’000 $’000 QANTAS Revenue 118,894 110,594 118,894 110,594 Expenditure 22,868 16,616 22,868 16,616 Trade receivables 4,461 3,685 4,461 3,685 Other receivables 43,639 - 43,639 - Trade creditors 4,970 5,505 4,970 5,505 FIJI GOVERNMENT Revenue 582 413 582 413 Expenditure 28,362 27,129 28,362 27,129 Trade receivables 111 42 111 42 Trade creditors 3,747 4,611 3,747 4,611

In addition to the fees and compensation disclosed in Notes 5 and 4, the Directors and Key Management of the Group and the Company receive travel benefi ts. Key Management Personnel are those individuals that have authority and responsibility for planning, directing and controlling the activities of the Company and the Group.

Fiji Airlines Limited is a related party by virtue of it being a controlled entity. Transactions and balances with Fiji Airlines Limited are disclosed elsewhere in the fi nancial statements.

Richmond Limited is a related party by virtue of it being a jointly controlled entity. Transactions and balances with Richmond Limited are disclosed elsewhere in the fi nancial statements.

21. FINANCIAL RISK MANAGEMENT

The Air Pacifi c Group is subject to credit, liquidity, interest rate, foreign exchange and fuel price risk. These risks are an inherent part of the operations of an international airline. The Air Pacifi c Group manages these risk exposures using various fi nancial instruments and using a set of policies as approved by the Board.

The Group uses different methods to assess and manage different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other prices risks, and ageing analysis and sensitivity analysis for credit and liquidity risk.

(a) Credit Risk

Credit risk relates to the possibility of default by customers and agents in settling their obligation to the Group and the Company. The Group and the Company have established internal policies to determine the creditworthiness and reliability of potential customers. Agents are also required to provide bank guarantees which the Group and the Company can exercise in the event of non-payment of amounts due.


20. RELATED PARTIES

Details of shareholding of major shareholders are provided in Note 17. Transactions with major shareholders are conducted on a commercial basis and comprise the following:

• Air Pacifi c provides passenger travel and freight carriage for the Fiji Government; • On certain Air Pacifi c routes Qantas codeshares for which it retains a percentage of the revenue for seats sold; • The Fiji Government or its controlled entities provide airport, ground handling, catering, landing and air

navigation services to Air Pacifi c; • Qantas provides ground handling, catering, fuel hedging, insurance purchase and aircraft maintenance services to

Air Pacifi c.

Transactions and balances with major shareholders included in the Financial Statements are as follows:

Air Pacifi c Group


page 45

Air Pacifi c Group



21. FINANCIAL RISK MANAGEMENT (Continued)

2009 2008 2009 2008

$’000 $’000 $’000 $’000 The table below sets out maximum exposure to credit risk as at reporting date.

Cash 15,292 31,020 14,726 29,320 Term Deposits 76,316 197,988 76,316 197,988 Trade Debtors & Other Receivables 117,526 57,482 112,301 54,473 Other Deposits 45,450 36,934 40,450 36,934 Advance to Related Parties 872 819 40,360 42,631

(b) Liquidity Risk

Liquidity risk is the possibility that the Group and the Company will not be able to meet its fi nancial obligations as they fall due. The Group’s and the Company’s approach to managing liquidity is to ensure, as far as possible, that they will always have suffi cient liquidity to meet their liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s and the Company’s reputation.

Typically the Group and the Company ensure that they have suffi cient cash on demand to meet expected operational expenses for a period of 180 days, including the servicing of fi nancial obligations. In addition, the Group maintains a $15M (2008: $15M) overdraft facility that is unsecured.

The following table summarises the contractual maturities of fi nancial liabilities, including interest payments as at reporting date.

Financial Liabilities

Less than 1 to 5 Total 1 Year Years

2009 $’000 $’000 $’000 Trade Creditors & Accrued Expenditure 134,916 - 134,916 Borrowings 23,775 - 23,775 Lease Liabilities 19,776 23,225 43,001 Other Financial Liability 61,272 - 61,272

2008 Trade Creditors & Accrued Expenditure 151,970 - 151,970 Borrowings - - - Lease Liabilities 15,519 35,641 51,160 Other Financial Liability - - -

Air Pacifi c Group


Air Pacifi c Group


Less than 1 to 5 Total 1 Year Years

2009 $’000 $’000 $’000 Trade Creditors & Accrued Expenditure 131,950 - 131,950 Borrowings 23,775 - 23,775 Lease Liabilities 19,776 23,225 43,001 Other Financial Liability 61,272 - 61,272

2008 Trade Creditors & Accrued Expenditure 148,590 - 148,590 Borrowings - - - Lease Liabilities 15,519 35,641 51,160 Other Financial Liability - - -

Air Pacifi c Limited

(c) Market Risk

Market risk is the possibility that changes in market prices, such as foreign exchange rates and interest rates will affect the Group’s and the Company’s result and the value of its holdings of its fi nancial instruments. The following section summarises the Group’s approach to managing these risks.

i) Interest Rate Risk

Interest rate risk refers to the possibility that the fair value of future cashfl ows of a fi nancial instrument will fl uctuate because of changes in market interest rates. The Group and the Company have exposure to movements in interest rates arising from its interest rate sensitive liabilities, predominantly in USD.

As at 31 March 2009, interest bearing liabilities amounted to $66.7M (2008: $51.1M). The fi xed/fl oating split is 64 percent and 36 percent respectively (2008: 100 percent fi xed).

The following table summarises the impact of reasonably possible changes in interest rates on net profi t and equity. For the purpose of this disclosure, the sensitivity analysis assumes a 100 basis points increase in all relevant interest rates. This analysis also assumes that all other variables, including foreign exchange rates remain constant.


(b) Liquidity Risk (Continued)

page 47

Air Pacifi c Group


21. FINANCIAL RISK MANAGEMENT (Continued) (c) Market Risk (Continued) i) Interest Rate Risk (Continued)

Net Profi t Equity

100bps increase in interest rates 2009 2008 2009 2008

$’000 $’000 $’000 $’000 Variable rate instruments Interest Expense (167) - (167) -

Net Profi t Equity

2009 2008 2009 2008

$’000 $’000 $’000 $’000 10% increase in all currency pairs 7,793 4,077 7,793 4,077 10% decrease in all currency pairs (7,793) (4,077) (7,793) (4,077)

Net Profi t Equity

2009 2008 2009 2008

$’000 $’000 $’000 $’000 10% increase in all currency pairs 7,103 4,077 7,103 4,077 10% decrease in all currency pairs (7,103) (4,077) (7,103) (4,077)

Net Profi t Equity

100bps increase in interest rates 2009 2008 2009 2008

$’000 $’000 $’000 $’000 Variable rate instruments Interest Expense (167) - (167) -

Air Pacifi c Group

Air Pacifi c Group



ii) Foreign Exchange Risk

The Group and the Company is exposed to foreign currency risks on revenues, expenses and borrowings that are denominated in a currency other than the Fiji dollar. There is no means of hedging foreign currency payments exchange risks in Fiji Islands. However the Group and the Company generate suffi cient foreign currency revenue to meet their obligations denominated in foreign currencies and all

net exposures are monitored by Management.

The following table summarises the impact of reasonably possible changes in foreign exchange rates on net profi t and equity. The sensitivity analysis assumes a 10% increase and decrease in all currency pairs.

The analysis also assumes that all other variables, including interest rates, remain constant.


Air Pacifi c Group

Notes to and Forming Part of the Financial Statements For the Year Ended 31 March 2009

Net Profi t Equity

2009 2008 2009 2008

$’000 $’000 $’000 $’000 10% increase per barrel in fuel indices (8,914) (14,652) (8,914) (14,652) 10% decrease per barrel in fuel indices 8,914 14,652 8,914 14,652

Net Profi t Equity

2009 2008 2009 2008

$’000 $’000 $’000 $’000 10% increase per barrel in fuel indices (8,362) (13,612) (8,362) (13,612) 10% decrease per barrel in fuel indices 8,362 13,612 8,362 13,612

Air Pacifi c Group


iii) Fuel Price Risk

Fuel hedging instruments are used to smooth the impact of sudden and signifi cant increases in fuel prices. As at 31 March 2009 28 percent (2008: 12 percent) of forecast fuel exposure less than one year have been hedged.

As at 31 March 2009, other fi nancial liabilities include fuel derivatives totalling $61.3M. (2008: $Nil). These are recognised at fair value.

The following table summarises the impact of reasonably possible changes in fuel prices on net profi t and equity. The sensitivity analysis assumes a 10% increase and decrease in fuel indices. The analysis also assumes that all other variables, including foreign currency exchange rates, remain constant.

(a) Capital Management

The Board’s policy is to maintain a strong capital base so as to maintain creditor and market confi dence and to sustain future developments of the business. There were no changes to the Group’s approach to capital management during the year.

22. GOING CONCERN & FINANCIAL SUPPORT

The Group and the Company had working capital defi ciencies of $70.7m and $73.6m respectively as at 31 March 2009, and incurred defi ciencies in operating cash fl ows of $123.7m and $125.4m respectively and net losses after income tax of $7.2m and $5.2m respectively for the year then ended. The Group and the Company’s continuation as going concerns are dependent upon their ability to maintain appropriate fi nancing and/or to generate suffi cient cash fl ows from operations in order to meet their obligations and to return to profi table operations. In order to address these issues, management has taken necessary actions including arranging additional fi nancing facilities and implementation of expense reduction programmes.

The fi nancial statements do not include any adjustments relating to the recoverability or classifi cation of recorded asset amounts or the amounts and classifi cation of liabilities that might be necessary should the Group and/or Company be unable to continue as going concerns.

The directors consider the application of the going concern principle to be appropriate in the preparation of these fi nancial statements as the directors anticipate the lenders will continue to provide necessary fi nancial support and the Group and Company to generate adequate funds to meet their liabilities as and when they fall due.


page 49

23. EVENTS SUBSEQUENT TO BALANCE DATE

On 15 April 2009, the Reserve Bank of Fiji devalued the Fiji Dollar by 20 percent. No adjustment has been made in respect of this in the fi nancial statements for the year ended 31 March 2009. The general effect of the devaluation would include a likely increase in future revenue, an increase in future costs of operations denominated in foreign currencies in Fiji Dollar terms and increases in Balance Sheet items denominated in foreign currencies.

24. REGISTERED OFFICE

The Company’s registered offi ce is located at:

Air Pacifi c Maintenance & Administration Centre Nasoso Road Nadi FIJI ISLANDS



5 Year Statistics 2005–2009

The Year in Review 2008/09 2007/08 2006/07 2005/06 2004/05

FINANCIAL Revenue (000) $622,787 $542,841 $486,706 $449,389 $440,651Expenditure (000) $635,031 $501,749 $476,234 $427,928 $404,721Operating Profi t/(Loss) (000) ($12,244) $41,092 $10,472 $21,461 $35,930 Cost per ATK 86.0c 74.0c 69.9c 62.3c 56.7cYield per RTK 130.9c 122.7c 109.5c 99.9c 100.9cPaid up Capital as at 31 March (000) $26,093 $26,093 $26,093 $26,093 $26,093 GROUP Revenue (000) $648,471 $558,422 $487,682 Expenditure (000) $662,774 $520,272 $482,424 Operating Profi t/(Loss) (000) ($14,303) $38,150 $5,258 OPERATIONS Unduplicated Route Km as at 31 March 57,162 52,243 60,072 58,434 52,095Available Tonne Km (000) 738,109 678,193 681,368 686,516 713,871 AIRCRAFT UTILISATION (Actual Hours per Aircraft Type) B747-400 8,591 7,340 7,310 7,648 7,625B767-300 5,198 5,134 5,320 5,369 5,226B737-700 3,940 3,391 3,610 2,881 2,084B737-800 7,179 7,421 8,203 7,644 7,757ATR42-500 1,086 776 155 – – TRAFFIC (Excluding Charters to Other Airlines) Passengers Carried 658,150 614,935 642,549 596,285 595,019Revenue Passenger Kilometres (000) 3,730,106 3,404,511 3,451,184 3,310,339 3,353,836Available Seat Kilometres (000) 5,654,899 5,169,096 5,190,067 5,188,082 5,093,797Revenue Seat Factor 66.0% 65.9% 66.5% 63.8% 65.8%Cargo & Excess Baggage Tonne Kilometres (000) 73,642 72,125 69,855 324,994 220,487Mail Tonne Kilometres (000) 656 798 776 951 830Revenue Tonne Kilometres (000) 475,773 442,379 444,520 449,627 436,631Revenue Load Factor 64.5% 65.2% 65.2% 65.5% 61.2% AVERAGE KM FLOWN BY PASSENGER Average all Services 5,668 5,536 5,371 5,552 5,637 PERSONNEL Average Staff Strength 803 804 771 754 747Revenue per Employee $775,575 $675,176 $631,266 $596,006 $589,895ATKs per Employee 919,189 843,524 883,746 910,499 955,651Expenditure per Employee $790,823 $624,066 $617,683 $567,544 $541,796

DEFINITIONSATK: Available Tonne Kilometres Available payload of the aircraft times the kilometre distance travelled.RTK: Revenue Tonne Kilometres Total weight of all products carried i.e. passengers, cargo, mail and excess baggage on the aircraft times the kilometre distance travelled.RPK: Revenue Passenger Kilometres Number of revenue passengers carried times the kilometre distance travelled.ASK: Available Seat Kilometres Number of saleable seats on the aircraft times the kilometre distance travelled.Cargo & Excess Baggage Tonne Kilometres: Total weight of cargo and excess baggage carried times the kilometre distance travelled.Mail Tonne Kilometres: Weight of mail carried times the kilometre distance travelled.Revenue Seat Factor: Revenue Passenger Kilometres expressed as a percentage of Available Seat Kilometres.Revenue Load Factor: Revenue Tonne Kilometres expressed as a percentage of Available Tonne Kilometres.

Note: All weights are expressed in metric tonnes.

page 51

HEAD OFFICEAir Pacifi c LimitedPrivate Mail BagNadi Airport Fiji IslandsPhone: (679) 6720777 Fax: (679) 6720512www.airpacifi c.com

CARGOAir Pacifi c LimitedNadi Airport, Fiji Islands

SUBSIDIARYPacifi c SunCorner of Koromakawa Road CAAFI CompoundNadi AirportFiji Islandswww.pacifi csun.com.fj

REGIONAL OFFICES:

FIJIAir Pacifi c LimitedGround Floor, CML BuildingVictoria Parade, Suva

Air Pacifi c LimitedArrival Concourse Nadi Airport

AUSTRALIAAir Pacifi c Limited World Aviation Systems–GSA Level 2, 410 Queen Street Brisbane QLD 4000

Air Pacifi c LimitedWorld Aviation Systems–GSAGround Floor, 310 King StreetMelbourne VIC 3000

Air Pacifi c LimitedWorld Aviation Systems–GSALevel 10, 403 George StreetSydney NSW 2000

HONG KONGHoliday Tour & Travel – GSA Suites 803 – 804, 8th Floor World Finance Centre South Tower, Harbour CityTsimshatsui Kowloon Hong Kong

INDIAGriffon Aviation-GSAShop#4 Cusrow Baug,Colaba, Mumbai 400039

INDONESIA Holiday Tours & Travel – GSA Menara BDN Bldg 11th Flr JL. Kebon Sirih No. 83 Jakarta Pusat 10340

ISRAELTal Aviation Limited – Passenger GSA29 Ben Yehuda Street 63 807 Tel Aviv

KIRIBATIPacifi c World Travel – GSALagoon Drive, Bikenibeu Central, Kiribati

Pacifi c World Travel – GSAWithin Tobaraoi, Ronton Village, Kirimati IslandChristmas Island

KOREAHoliday Tours & Travel (Korea) Ltd – Passenger GSA 15th Floor Soonhwa Building 5-2 Soonhwa-dong Jung-gu Seoul Korea 100-130

International Air Transport Co., Ltd – Cargo GSA6th Floor, Sina Building39-1, Seosomun-dong,Jung-gu, Seoul, Korea 100-752

MALAYSIAMalaysian Airlines System– GSA 3rd Floor, MAS BuildingJalan Sultan IsmailKuala Lumpur 50250

NETHERLANDSQantas – GSAAtlanta BuildingStadhouderskade 6 Amsterdam

NEW CALEDONIAAir Pacifi c LimitedAgence de Voyages Jean Brock - GSA14 Rue George ClemenceauBP 122, 98845, Noumea

NEW ZEALANDAir Pacifi c LimitedWorld Aviation Systems-GSALevel 9 Sofrana House 396 Queen Street Auckland

Air Pacifi c LimitedQantas - GSAGround Floor Price Waterhouse Building119 Armagh StreetChristchurch

Air Pacifi c LimitedQantas – GSAGround Floor ASB Bank Tower 2 Hunter Street, Wellington

U.S.A. & CANADAAir Pacifi c LimitedSuite 490, 6080 Centre DriveLos Angeles, CA 90045 Cargo Handling Agent-5777 W.Century BlvdSuite # 1610Los Angeles, CA 90045

HAWAIIAir Pacifi c Limited300 Rodgers Boulevard #60Honolulu International Airport Hawaii 96819

SAMOAAir Pacifi c LimitedPolynesian Airlines-GSA 5th Floor, Central Bank Building, P.O. Box 599 Apia

SINGAPOREHoliday Tours & Travel (Korea) Ltd – Passenger GSA 15 Cairnhill Road #07-05, Cairnhill PlaceSingapore 229650

Cargo Handling Agent-International Air Cargo Services Pte LtdRoom 230 Sats AirfreightTerminal 2, Core E, Airport Cargo RoadP.O.Box 656Airmail Transit Centre Singapore Changi Airport Singapore 918105

SOLOMON ISLANDSAir Pacifi c LimitedTravel Industry Services-GSACity Centre BuildingMendana Avenue, Honiara

Cargo Handling Agent-Solomon Airlines–FreightHenderson Airport

TAHITIQantas - GSAShop 44, 2nd Floor, Vaima Centre, Plazza BasseP.O.Box 1695Papeete

TAIWAN, ROCHoliday Tours & Travel – Passenger GSA 10F-6, 106, Chang-An West Rd. Taipei 103, Taiwan ROC

JPK Air Freight Co. Ltd- Cargo GSA, 5th Floor, No.1, Nanking Road East Sec. 3, Taipei THAILAND Holiday Tour & Travel - GSA 942/160-163 Charn Issara Tower 21st Flr Rama 4 Road Surawongse, BangrakBangkok 10500

TONGAAir Pacifi c LimitedE.M.Jones Limited-GSAP.O.Box 34, Nuku’alofa

UNITED KINGDOMAir Pacifi c LimitedP.O.Box 10013Polstead, Colchester C06 5WY

Qantas–GSA395/403 King StreetHammersmith, London W69NJ

VANUATUAir Pacifi c LimitedVanuatu Travel Services-GSAC/- South Pacifi c TravelAnchor House, Kumul HwyPort Vila

VIETNAM Holiday Tour & Travel – GSA Unit 1601, Saigon Trade Centre 37 Ton Duc Thang, District 1 Ho Chi Minh City, Vietnam

QANTAS- GSA

FRANCE Qantas-GSA13/15 Boulevard de la Madeleine, Paris

ITALY Qantas-GSACorso Italia 8, Milan Via Bissolati 54, Rome

GERMANYQantas-GSAAirport Terminal 2, Level 6Frankfurt

SWEDENQantas-GSADalagatan 21, 113 24 Stockholm

SWITZERLANDQantas-GSALoewemstrasse 29 Zurich 8021


Offi ces, general sales agents and cargo

Documents

Air Pacific 2009 Annual Report