Airwork extends contract with Toll Group

Wednesday 17th June 2015

Airwork Holdings, the listed aviation service firm, has extended its contract with Toll Group to service and maintain the logistic company's Australian express air freight business.

The contract has been extended to mid-2022, and provides the air freight business with aircraft, crew, all maintenance, certification and insurance in what is known as a wet lease, the Auckland-based company said in a statement. The deal will see Airwork replace two of its three Boeing 737-300F planes used by Toll with larger 737-400F models next February.

The "contract extension with logistics provider Toll Group cements a strong base for its fixed-wing business unit and will increase operating efficiency," the aviation company said. It has been working with Toll for the past eight years.

The company has been focused on refining its fixed wing service, reducing unscheduled and charter flying hours, cutting down on costs and expanding its dry lease fleet and customer base to widen margins.

In February, Airwork lifted first-half profit 19 percent to $7.9 million, beating its prospectus guidance of $5.9 million. The company raised its earnings guidance to about $15.3 million for the year ending June 30, from a previous forecast of $14.5 million, which reflected the impact of the revision of Boeing 737 aircraft residual values.

Airwork shares last traded at $3.09 and have fallen 1.1 percent since the start of the year.

BusinessDesk.co.nz

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