OTTAWA, June 11 /CNW Telbec/ - NAV CANADA today announced that it has
decided not to propose an increase in its service charges at this time, citing
an acceptable level in its "notional" rate stabilization account. However, due
to the significant uncertainty regarding the timing of an improvement in air
traffic levels, the Company will carefully monitor air traffic levels on a
monthly basis. Should traffic levels not improve, a rate increase will be
considered no later than October for effect in 2010, if required.
"Thanks to the efforts of all employees, we have been able to offset much
of the impact of declining air traffic and revenues. Our operating expenses,
which remained essentially unchanged from fiscal 2007 to fiscal 2008, are
currently forecast to be approximately $20 million lower in fiscal 2009. We
have done this through active cost management, consistent with safety," said
John Crichton, President & CEO.
The rate stabilization account was established at the inception of NAV
CANADA to accumulate the variances between actual financial results and
estimates of traffic volumes and planned expenses. The Company has established
a target balance for the rate stabilization account of 7.5 per cent of
recurring expenses, or $94 million.
The Company considers the "notional" balance in the rate stabilization
account, for rate setting purposes, to be $92 million as of February 2009 (the
end of its second fiscal quarter), in view of the consideration that a
significant part of the cumulative fair value adjustments recorded on its
commercial paper investments should be recoverable over the time that the
Company continues to hold them.
Traffic levels will be closely monitored over the coming months, with
rate action a real possibility at a later date if traffic growth does not
Overall charges are only five per cent higher than they were in 1999 when
they were fully implemented, which is 19 percentage points below the growth in
Despite rate increases earlier in the decade following the 9/11 downturn,
the Company recently reduced fees by a combined total of about 6 per cent - in
2006 and 2007 - saving customers over $50 million on an annual basis.
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.
For further information:
For further information: Ron Singer, Manager, Media Relations, (613)
563-7303; Nadège Adam, Advisor, Media and Public Affairs, (613) 563-5972;
Media Information Line: 1-888-562-8226; www.navcanada.ca