Air New Zealand has recorded a six per cent fall in normalised earnings, although the airline says that it remained one of the world’s best performing airlines during a challenging year.
For the financial year ending June 31, the airline recorded normalised earnings of NZ$137m (A$108.6m), compared to NZ$145m (A$114.9m) the year prior, while net profit after tax increased by 290 per cent to NZ$82m (A$65m). Revenue was down by 12 per cent to NZ$4bn (A$3.17bn) as passenger demand (in revenue passenger kilometres) decreased by 4.7 per cent and yield fell by 10.7 per cent on long haul services and 5.4 per cent on short haul. An overall decrease in capacity of eight per cent resulted in load factor increasing by 2.8 percentage points to 83.1 per cent.
While acknowledging that the financial year had been challenging, CEO Rob Fyfe said that key decisions made by the airline had paid off. “The many changes and announcements we have made have been well received in global markets and have helped us once again outperform our main competitors.”
A number of those announcements will be implemented over the year ahead, with domestic capacity to increase by eight per cent progressively from September while the first new, all-economy configured A320s will arrive from February 2011 to boost Tasman and Pacific Island capacity.
“In addition, our proposed trans-Tasman alliance with Virgin Blue will create a far better and more sustainable service through working together, providing a greatly enhanced offering to our customers that will stimulate demand,” said Fyfe.
Air NZ will also take delivery of the first of its new Boeing 777-300ERs over the next year, with the aircraft to feature its new cabin products across the three cabin classes. The airline says that is is experiencing strong early bookings for the first services of the aircraft on the Auckland-Los Angeles-London route from April next year.
In its outlook, Air NZ said that it is optimistic that earnings will continue to improve over the next year, but cautioned that earnings could be “significantly impacted by changes in economic conditions or input costs, such as fuel price.”