Isavia Annual Report 2012
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2012 Isavia | www.isavia.is | Tel: 354 424 4000 | [email protected] /////////////////////////////////////////////////////////////////////////////////////////////////// //////////////////////////////////////////// Values of Isavia Safety We minimise risk by employing disciplined operating procedures, relentless pursuit of knowledge and systematic supervision and effect safety for our customers, personnel and the public. Co-operation We co-operate as one toward the goal of success and excellence in service. We respect each other’s work and encourage initiative toward reformation. Service We establish clear service benchmarks and greet our customers with positive aitude and respect. We exercise prudence and seek ways to maximise success. The annual report of Isavia for 2012 is partly in electronic form. In this way, the company wants to minimise printed versions and be more environmentally friendly. The electronic part of the annual report is accessible at the web address: www.isavia.is/annualreport /////////////////////////////////////////////////////// CONTENTS ADDRESS OF THE CHAIRMAN OF THE BOARD OF DIRECTORS. 3. DIVISIONS . .7 . FLIGHT STATISTICS . 8 KEY FIGURES . 10 OPERATIONS AND PERFORMANCE. 12. Independent Auditor’s REPORT . .14 . STATEMENT BY THE BOARD OF DIRECTORS AND MANAGING DIRECTOR . .15 . CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 2012 . 16 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION . .17 . CONSOLIDATED STATEMENT OF CHANGES IN EQUITY . 18 CONSOLIDATED STATEMENT OF CASH FLOWS . 19 NOTES . .20 . /////////////////////////////////////////////////////// 2 /////////////////////////////////////////////////////// ADDRESS OF THE CHAIRMAN OF THE BOARD OF DIRECTORS Isavia has chosen safety, service and co-operation alternates were asked to attend the December as its core values. The development of the comp- meeting, at which the company's operating any over the past three years, following the mer- budget for 2013 was discussed, and also the ger of Flugstodir and Keflavik Airport, has been a meeting on 4 April 2013, at which the 2012 success, and achievements have been in line with annual financial statements were discussed. expectations. We continue to ensure aviation safety by co-operating with, and providing The board meetings were held alternatively at services to, both the authorities and all those Reykjavik Airport and Keflavik Airport. In who use Iceland's airport facilities or air addition, one meeting was held in Bildudalur on navigation services. Employees and management 4 October in accordance with the policy of have worked together under the slogan: "We visiting and holding one to two board meetings serve aviation". We have saved a significant every year at one of the company's main operati- amount by containing costs. ons locations. In Bildudalur, the Board met with the airport's staff and the Westfjords area mana- Isavia's operation is divided into three parts: the ger for airports and familiarised themselves with operation at Keflavik Airport, international flight the operation of the airport and the issues that services and services to domestic flights. Increases relate to the operation, to construction and to in the number of aircraft passengers through investments in the airport. Keflavik Airport continue to demand an exp- anded level of service; international flight services On the way home from Bildudalur, the Board 3 have grown stronger slowly but surely, while had a stop-over at Gjogur Airport, which is the domestic services are struggling. only gravel-surfaced airport in Iceland used for scheduled flights. In Gjogur, the Board had The Board of Directors elected during the comp- discussions with airport staff about the operation any's most recent Annual General Meeting, on 3 and also about the challenges involved in runn- May 2012, consists of Arnbjorg Sveinsdottir, ing a facility that does not meet the demands Municipal Representative and alternate Member made of modern airports. of Parliament; Asta Rut Jonasdottir, Business Administrator; Jon Nordfjord, Managing There has been significant growth in internati- Director; Ragnar Oskarsson, Upper Secondary onal flights, and records have been broken again School Teacher; and Thorolfur Arnason, Engineer. and again as regards passenger throughput at Keflavik Airport. The increase in the number of The alternates elected at the meeting were passengers was approximately 13% between Hjortur M. Gudbjartsson, Johanna Harpa years, with just under 2.4 million passengers in Arnadottir, Olafur Sveinsson, Sigrun Palsdottir 2012, which is approximately 9% more than in and Sigurbjorn Trausti Vilhjalmsson. Arngrimur the record year 2007. There has been an incredi- Johannsson and Jonas Bjarnason retired as ble 44% increase since 2009, which was the alternates and were thanked for all their hard worst year of the economic crisis in Iceland. This work on behalf of the company. success has not been automatic. Many people have contributed to marketing the country and The Board allocated tasks among themselves so to creating the optimal conditions for this that Thorolfur Arnason was re-elected as achievement. The tourist industry is advancing by Chairman and Ragnar Oskarsson likewise as Vice leaps and bounds and is often referred to as the -Chairman. economy's principal growth area. Isavia has become one of the most progressive companies The Board held 13 meetings during 2012 and in this sector, and even greater efforts are being has held 13 meetings since the most recent made in encouraging flight operators to expand Annual General Meeting. Meetings are now held their operations at Keflavik International Airport regularly on the first Thursday of each month. All and to take advantage of the award-winning /////////////////////////////////////////////////////// services that have been developed there. It is through Keflavik Airport over the next four to estimated that passenger figures through Kefla- five years. Preparations for the expansion of the vik Airport will reach approximately 2.7 million air terminal, therefore, have already been initiated. this year. In addition, investments in runway resurfacing are planned. Such resurfacing is inevitable over Efforts to increase the number of travellers the next few years, and the project will cost up to outside the summer season, and to lengthen tra- ISK 4bn, or an average of ISK 500m per year over vel in spring and autumn, have been successful. the next eight years. Five flight operators maintained scheduled flights to Keflavik Airport last winter, and 17 flight The report from 2011 described projects that operators plan to operate there this summer. Keflavik Airport has initiated to integrate airport staff jobs, as is the norm in most of the airports It is quite clear that this increase will involve in countries with which we compare ourselves. some growth-related problems that will have to The concept integrates all aspects of airport be addressed. The company will be spending services, with no distinction between the indi- approximately ISK 900 million in investments in vidual roles of fire-fighters, heavy equipment 2013 on improvements to the Leif Eiriksson Air operators, etc. Now all are referred to as airfield Terminal in order to meet this significant increase services personnel. The airport services are, in in passengers. The focus will be on maximising fact, still in different buildings, although the plan the use of facilities and on economisation. The is to build a new services building where all largest project is the reorganisation of the south equipment, service areas and staff will be under building of the air terminal to improve services the same roof. The size of the building will be and passenger experience. Once the project has approximately 4,000 square metres and will be 4 been completed, there will be much better located near the centre of the airport, south of sanitary facilities, speedier processing in passport the Leif Eiriksson Air Terminal. Construction will control, more seating in waiting areas, a new begin later this year, and the estimated cost of Duty-Free Store and more restaurants. In the project is around ISK 800m. addition, we will embark on costly actions to increase the capacity of luggage systems and Work will continue on the preparation of new security scanning equipment. There are also zoning plans for Keflavik Airport in accordance plans to increase the number of self-service with the polices established and presented last check-in stations, which have increased per- summer and which the company's Board and formance considerably, and to increase the num- Planning Committee have approved. ber of departure gates so that a greater number of aircraft can be processed during peak times. On the whole, the results of 2012 are quite Passengers will then be transported by bus to good. The group's income was ISK 18.4bn. aircraft near the terminal building. Profits before depreciation and financial items are approximately ISK 3.8bn, or around 20.8% However, these measures will only meet the of income, and profits after taxes amount to ISK needs of increases this summer and the next, 738m. The fund creation in the operation is and are an indication of what needs to be done sufficient to pay the company's non-current lia- to further increase future capacity. Investments bilities as well as to cover the projects the comp- in connection with Keflavik Airport during this any considers necessary to initiate during the year and the next amount to a total of ISK 2.7bn, year. The company had approximately