Fiji Airways has cited higher fuel costs and adverse foreign currency movements as the drivers behind a 42% fall in profit before tax in 2018 to F$55.3 million ($25.8 million).
The cost increases outstripped a 10% rise in revenue to F$1.02 billion for the year ended 31 December 2018.
The airline, which is majority-owned by the Fijian government, did not disclose a net profit figure.
Chief executive Andre Viljoen commented that the year was one of “significant highs and lows”.
“Fuel price increases alone accounted for F$31.5 million being taken off our targeted bottom line, while unfavourable foreign exchange variations added another negative impact of F$8.2 million,” he adds.
“Our network and fleet size grew, which means our manpower requirements grew as well, contributing to increased cost. Despite these and other industry wide challenges, our team responded by diligently managing cost where possible and continuing with our infrastructure and fleet investment strategy.”
That investment included the start of work on its new training centre, which will host three full-motion simulators when it opens later this year.
Other key developments during the year included adding three Viking Air Twin Otter turboprops and a Boeing 737 Max 8 to its fleet, and introduced a new route from Nadi to Tokyo Narita.
It also launched the Oneworld Connect programme and signed new and expanded codeshare agreements with carriers including British Airways, Singapore Airlines and Alaska Airlines.
Despite some easing in conditions, Viljoen notes that there are several challenges the airline faces this year, with fuel prices expected to have a F$40 million negative impact.
“Our team stands ready to navigate these challenges, maintaining sound fiscal discipline and a relentless focus on customer experience,” he adds.
Fiji Airways recently announced that it will lease two Airbus A350-900s from DAE Capital that will join its fleet from November, and will be used on services to Australia and the USA.