N.A.C. “Severely” Hit By Devaluation

Press, Volume CVIII, Issue 31740, 25 July 1968, Page 1

N.A.C. “Severely” Hit By Devaluation

Devaluation had had severe repercussions on the National Airways Corporation, the deputy general manager of the corporation (Mr L. L. Ford) said in Christchurch at a national news forum yesterday.

Additional operating costs this financial year because of devaluation were estimated at $600,000. In a full year of Boeing 737 operations next year they would rise to $750,000, he said. The effects of devaluation were more severe than on road transport operators, because the additional cost of imported motor spirit had been offset by lower taxation and the price of petrol had not been increased. Yet aviation fuels, the price of which had increased in January, had added $400,000 annually to the airline's costs. The cost of spares was increasing as replacement stocks

were purchased and promotional expenses overseas had automatically increased, as had the cost of servicing and repayment of overseas loans. The most significant area was the additional cost in New Zealand currency of the Boeing 737 and its spares. “The $13.3m American dollar loan has increased in terms of New Zealand dollars from $9.7m to $11.9m. The extra s2.2tn will have to be found over the next 10 years as the loan is repaid, but there is an immediate effect in the cost of operations through depreciation and in. terest payments on the loan,” he said.