OTTAWA, April 8 /CNW Telbec/ - NAV CANADA today released its financial
results for the three and six months ended February 28, 2009. Continuing
declines in air traffic were largely offset by favourable cost variances from
plan during the quarter.
"Dealing with the negative impacts of the economic downturn, while
maintaining safe and efficient air navigation services for all customers, is
our top priority," said John Crichton, NAV CANADA President & CEO. "We
continue to effectively control expenses, and in this regard the Company is
benefiting from the excellent and professional collaboration of employees,
bargaining agents and other key stakeholders.
"The January restructuring of our ABCP investments into longer term notes
was a key highlight in the quarter, as was the constructive and welcome role
played by government in helping to finalize the process. The fair value
adjustments net of the credit loss provision for these investments should be
recoverable in the future, and therefore will not be considered at this time
when determining customer service charges."
The Company's revenues before rate stabilization for the second quarter
of fiscal 2009 were $ 261 million, compared to $ 281 million for the same
period in the previous year. The lower revenues arose primarily from a decline
in air traffic volumes. After eliminating the effect of the leap year in 2008,
traffic during the second quarter was 5.5 per cent lower than in the second
quarter of 2008. The actual air traffic decline for the quarter was 6.6 per
Operating expenses before rate stabilization for the quarter were $ 236
million which was $ 2 million lower than the comparable period in the prior
year. Management continues to effectively manage overtime and headcount to
offset higher compensation level increases.
During the second quarter, other expenses totalling $ 61 million were $ 2
million lower than in the comparable period in the prior year. This was
primarily due to lower interest expense partially offset by slightly higher
depreciation relating to new capital assets.
Restructuring of the asset backed commercial paper (ABCP) covered by the
Montreal Accord was successfully completed on January 21, 2009. The
restructuring has resulted in longer term investments that better match the
maturity of the underlying assets. The Company has continued to carry all
investments at their fair values, which resulted in a $ 6 million reversal in
previously taken fair value adjustments during the second quarter.
Before the impact of rate stabilization is taken into account, expenses
exceeded revenues and other income by $ 30 million in the second quarter of
fiscal 2009. While NAV CANADA intends to break even on an annual basis,
quarterly results may indicate an imbalance between revenues and expenses due
to seasonal fluctuations in air traffic and other factors. The excess of
expenses over revenues and other income (before rate stabilization and rate
reduction) for the second quarter of 2008 was $ 40 million. We finished the
second quarter with an asset balance of $ 36 million in the rate stabilization
The Company's financial statements and Management's Discussion and
Analysis for the three and six months ended February 28, 2009 are available on
NAV CANADA's website at: www.navcanada.ca.
NAV CANADA, the country's civil air navigation services provider, is a
private sector, non-share capital corporation financed through publicly-traded
debt. With operations coast to coast, NAV CANADA provides air traffic control,
flight information, weather briefings, aeronautical information services,
airport advisory services and electronic aids to navigation.
This press release contains certain forward-looking statements that are
subject to important risks and uncertainties. Actual results may differ
materially from the results indicated in these statements for a number of
reasons. NAV CANADA disclaims any intention to update any forward-looking
For further information:
For further information: John Morris, Director, Communications, (613)
563-7032; Ron Singer, Manager, Media Relations, (613) 563-7303; Nadège Adam,
Advisor, Media and Public Affairs, (613) 563-5972; Media Information Line: