OTTAWA, July 11 /CNW Telbec/ - NAV CANADA today released its financial
results for the three and nine months ended May 31, 2008. The results show
continued growth in air traffic and revenues.
"As a result of solid operational performance, due to the efforts of all
our employees, we are able to make permanent the temporary one per cent rate
reduction, subject to the consultation process. This promises to deliver
approximately $ 13 million in customer savings for the fiscal year
September 1, 2008 to August 31, 2009," said John Crichton, President & CEO.
"But this is only part of the story," said Crichton. "With this latest
rate proposal, NAV CANADA service charges have been reduced by a total of
almost 5.8 per cent on average over the past two years. Customers stand to
save a combined total in the order of $ 75 million annually at a time of
rising fuel prices."
NAV CANADA implemented a reduction averaging 1.8 per cent rate on
September 1, 2006, followed by a 4.0 per cent service charge reduction on
August 1, 2007 which included a one per cent temporary reduction until
August 31, 2008. The Company released a Notice of Revised Service Charges in
June 2008 which proposes to make the temporary one per cent reduction
The Company's revenues before rate stabilization and the approved
transfer from the rate reduction obligation for the third quarter of fiscal
2008 were $ 305 million, compared to $ 297 million for the comparable period
in the previous year. The higher revenues arose primarily from a 6.5 per cent
year-over-year increase in air traffic volumes, partially offset by the
4 per cent reduction in customer service charges.
Operating expenses before rate stabilization for the quarter were
$ 250 million which was $ 4 million higher than in the comparable period in
the previous year. This increase was primarily due to higher compensation
levels partially offset by lower pension costs.
During the third quarter, interest, depreciation and amortization expense
before rate stabilization totalling $ 63 million were $ 1 million higher than
in the comparable period in the previous year. This was primarily due to
higher depreciation of capital assets offset by lower interest expense.
During the third quarter, the Company reduced by $ 49 million the fair
value of its investments in asset-backed commercial paper. The reduction was
partially offset by $ 1 million of interest income compared to $ 5 million of
interest income in the comparable period in the previous year.
The foregoing resulted in an excess of expenses over revenues and other
income of $ 11 million after rate stabilization in the third quarter of fiscal
2008. 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.
In order to achieve planned results, the Company recorded a $ 42 million
decrease in the rate stabilization account and a $ 3 million transfer from the
rate reduction obligation during the quarter. During the third quarter, the
Company's rate stabilization account decreased to $ 16 million.
The Company's financial statements and Management's Discussion and
Analysis for the three and nine months ended May 31, 2008 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 Relations, (613) 563-5972; Media Information Line: