NAV CANADA shows growth of 2.5% in Q1
Jan. 13, 2014, Ottawa - NAV CANADA today released its financial results for the three months ended November 30, 2013. The results show continued success in controlling costs while maintaining safe and efficient air navigation services, as well as growth in air traffic volumes of 2.5 per cent compared to the same period in the prior year.
NAV CANADA's fiscal year runs from September 1 to August 31. In the first quarter of fiscal 2014, the Company achieved positive financial performance as evidenced by an improvement of $7 million in its rate stabilization account, finishing with a positive balance of $60 million. When adjusted for rate setting purposes, there is a positive "notional" balance of $93 million in the rate stabilization account, which is equal to its target balance.
"We have witnessed a continuation of the fledgling recovery in traffic volumes that began in the third quarter of fiscal 2013," said John Crichton, president & CEO. "And while the airline industry is projecting overall growth in 2014, forecasts for growth in North America are more modest and we must remain vigilant in controlling our costs.
"We will continue our approach of targeting investments that enhance safety and translate to tangible economic benefits for our customers through greater efficiency and the resulting fuel cost savings," added Crichton.
NAV CANADA's revenues before rate stabilization for the first quarter of fiscal 2014 were $308 million, compared to $301 million in the first quarter of fiscal 2013, mainly due to the growth in air traffic volumes.
Operating expenses before rate stabilization for the first quarter of fiscal 2014 were $251 million as compared to $238 million over the same period in fiscal 2013, mainly due to higher compensation levels, higher pension expense and inflationary increases.
Interest, depreciation and amortization expense before rate stabilization totalling $60 million was in line with the comparable period in the previous fiscal year.
Positive fair value adjustments in the first quarter of fiscal 2014 contributed $7 million to other income before rate stabilization. As at November 30, 2013, the fair value of the company's investments in ABCP restructured and non-restructured notes is $269 million on holdings with a face value of $307 million. Of the total fair value variances from face value of $38 million, $33 million is considered recoverable over the terms of the notes.
Based on the above, NAV CANADA had an excess of revenue and other income over expenses before rate stabilization of $6 million for the first quarter of fiscal 2014.