Freightways announces aircraft fleet upgrade
- Increased airfreight carrying capacity
- Faster sector speeds
- Savings in annual capital and operating costs
- Modern navigational systems
- Reduced carbon emissions per item of freight carried
Key points relating to this initiative are:
- Freightways' subsidiary, Fieldair Holdings Limited, will form a Joint Venture company with Airwork Holdings Limited that will operate three Boeing 737-400 freighter aircraft to replace the airfreight service currently performed by Fieldair’s subsidiary, Air Freight NZ Limited, which uses five Convair freighter aircraft.
- Airwork will lease the three 737-400 freighter aircraft to the joint enture company.
- The joint venture company will operate the aircraft.
- Customers of the joint venture company will be Freightways' express package businesses and NZ Post’s Express Couriers Limited business. If demand warrants it, capacity will be made available to other freight operators.
- The 737-400 freighter aircraft will provide sufficient capacity to accommodate the expected future growth of Freightways’ express package volumes.
- Freightways' existing Convair fleet will be made available for sale upon the transition to the 737-400 freighter aircraft.
- The carrying value of Freightways’ Convair fleet and related spare parts has been written down by $7.6 million to reflect the realisable US dollar (USD) value of the fleet and parts at the current USD foreign exchange rate. The carrying value of the Convair fleet had previously been based on the exchange rate applicable at the time the last Convair was purchased in 2003 and supported by the fleet’s value in use to Freightways. The decision to transition from and sell the Convair fleet triggered the need to assess realisable values for accounting purposes and to reflect those values at the prevailing exchange rate. As a non-recurring and non-cash expense this write-down in value will not impact on Freightways' dividend payments to its shareholders.
- To transition to the new airfreight service, including redelivery of a currently-leased aircraft, capital expenditure of $1.7 million and transition costs of $1.35 million will be incurred.
- The financial benefit to Freightways is primarily related to cash savings in capital expenditure of approximately $3 million per annum and incremental savings in annual operating costs.