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PJIAE saw decline in revenue, but maintains healthy finances

AIRPORT--Lower passenger and aircraft traffic in 2009, associated with the global economic downturn, resulted in a decline in total revenue of NAf. 4.3 million for the Princess Juliana International Airport operating company (PJIAE).

Former President of PJIE Eugene Holiday, in his last fiscal year as president before being appointed Governor of St. Maarten, outlined in PJIAE's annual report the challenges and efforts to mitigate the effects of the economic downturn. However, despite the decline in revenue, PJIAE recorded a positive overall financial performance, with a net positive result of NAf 4.6 million.

While PJIAE's balance sheet total declined by 14.1 per cent from NAf. 326 million in 2008 to NAf. 280.1 million, the mitigation of the negative effects on the operating results of the economic downturn combined with the deleveraging of its balance sheet through the debt buy back operation, resulting in PJIAE maintaining a stable return on asset at some 6.4 per cent.

"Operating in 2009 was particularly challenging due to the impact of the global financial and economic crisis on the business activity at PJIA," Holiday said. "By meeting the challenges head on with determinate actions, we managed to strengthen the financial position of the company and create value for our stakeholders," he said, adding that passenger movements dropped 5.8 per cent and aircraft handled declined 12.9 per cent.

To offset the lower revenues, PJIAE implemented policies in expenditure management, policies that focused on increasing non-aeronautical revenues, maintaining rates and charges to airlines at the current levels and strengthening of air service development efforts.

"Some of the key policies include the retention of capital through tightening cost controls, rationalizing of energy costs, freezing the hiring of personnel, investing in increased safety and customer comfort and implementing debt service burden reduction strategies," Holiday noted.

He said despite increased passenger movement at PJIA in the first half of 2010, "we are clearly not out of the woods as yet. With the US economy continuing to show signs of weakness, the outlook for the rest of 2010 and 2011 remains uncertain."

Therefore, Holiday stressed, financial and economic challenges require continued application of best business practices, caution and prudence in the management of the affairs of the company. "It is my hope that the future management of PJIAE will adhere to these sound principles to guarantee the continuity of our islands single most important economic engine and thus secure and build on PJIAE's position as the third busiest airport in the region," Holiday said.

In the context of good business principles, he also took pride in noting that PJIAE received a positive review in keeping compliance with the Corporate Governance Code and pertinent legislation. External auditors PricewaterhouseCoopers reported that PJIAE's balance sheet and statement of income for 2009 are consistent in all material respects with the consolidated financial statements.

"The governance approach is critical to the realization of the objectives of any organization. It is our policy to apply and encourage strict adherence to the principles of best business practices. The recent introduction of the Corporate Governance Code provides a good yardstick for the measurement of the observance of the best business practices. In this regard we continuously evaluate our policies and procedures for observance with developments in the area of corporate governances," Holiday said.

Looking ahead, Holiday reiterated that PJIAE's only mission should be continuing to focus on ensuring safe and secure operations in keeping with international safety standards and on the provision of efficient and quality services with the aim of improving its competitive position.

The report of 2010 is expected during the course of 2011.

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