HALIFAX, Aug. 6 /CNW/ - Today, the second quarter 2008 results of Jazz
Air Income Fund (TSX: JAZ.UN) and Jazz Air LP ("Jazz") were announced.
Q2 2008 HIGHLIGHTS
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- Operating revenue of $409.8 million, up 9.2%.
- Performance incentives of $4.0 million, down 13%.
- Operating income of $28.8 million, down 27.8%.
- Net income of $27.4 million, down 32.4%.
- Controllable Cost per Available Seat Mile, up 9.6 %.
- Distributable cash(1) of $30.1 million, down 26.8%.
"We've performed well this quarter despite significant weather-related
challenges in central Canada and the US eastern seaboard from an operational
point of view. Our employees continue to deliver a safe and reliable service
as evidenced by our achievement of 73% of the performance incentives available
under the CPA," said Joseph Randell, President and Chief Executive Officer of
Jazz. "Consistent with the guidance we provided earlier this year, we've
completed both the planned outsourced work and excess overtime charges related
to heavy maintenance. These costs are reflected in this quarter's results."
Financial Performance - Second Quarter 2008
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For the second quarter of 2008, operating revenue was $409.8 million,
compared to $375.3 million in the same period of 2007, representing an
increase of $34.5 million or 9.2%. The increase in operating revenue was
attributable to an increase of 0.5% in the Block Hours flown and a 23.3%
increase in pass-through costs under the Capacity Purchase Agreement (CPA)
with Air Canada. For the three-month period ended June 30, 2008, performance
incentives payable by Air Canada to Jazz under the CPA amounted to
$4.0 million or 1.7% of Jazz's Scheduled Flights Revenue as compared to
$4.6 million or 2.0% for the same period in 2007. This translates to 73% of
the incentives available under the CPA for the quarter versus an 86%
attainment in 2007. Incentives earned in the second quarter of 2008 were lower
primarily due to the consequential impact of inclement weather conditions
which led to lower on-time performance than 2007. Year-over-year, for the
second quarter, other revenue sources increased from $2.3 million to $3.1
million.
Total operating expenses increased from $335.4 million in the second
quarter of 2007 to $381.0 million for the same period in 2008, an increase of
$45.6 million or 13.6 %. Pass-through costs represented $32.5 million or 71.3%
of the total increase in operating costs, rising primarily as a result of the
continuing rise in fuel prices. Controllable Costs represented $13.1 million
or 28.7% of the total increase in operating costs, rising primarily as a
result of increased costs related to aircraft maintenance, depreciation,
salaries, wages and benefits and other expenses.
For the second quarter of 2008, EBITDA(1) was $36.9 million compared to
$45.6 million in the second quarter 2007, a decrease of $8.7 million or 19.0%.
Operating income of $28.8 million represents an $11.1 million or 27.8%
decrease from the same period last year.
Controllable Costs per Available Seat Mile, excluding fuel, for the three
month period ended June 30, 2008, increased by 7.5% over the same period in
2007.
