Air NZ’s profit jump

written by | February 24, 2011
Air New Zealand's profitability has lifted off.

Air New Zealand has posted normalised earnings before tax of NZ$112 million for the first half of the current financial year, up 33 per cent on the same half in the 2009-10 financial year.

The result (NZ$96 million after tax) includes an NZ$18 million gain on equity swaps relating to Air NZ’s recent investment in Virgin Blue. Statutory profit before tax was $115 million, up NZ$31 million on the same period in 2009.

“Overall Air New Zealand has had a strong six months. Passenger numbers, cargo volumes and yields have all increased year on year, with an increase in revenues of nine percent. This has been offset by costs relating to increased capacity, increasing fuel prices and losses from foreign exchange hedges,” Air New Zealand chairman John Palmer said.


“Air New Zealand continued to invest throughout the worst of the global financial crisis and is now in a far stronger competitive position as a result of our innovation, people and strategic alliances. We now have a solid platform to progress and build value from these investments.”

The airline has a net cash position of $940 million, while the board has declared a fully imputed interim dividend of three cents per share.

Air New Zealand CEO Rob Fyfe said the last six months had been an “exciting period” for the airline, as it continued with new initiatives to strengthen its market position. “Bookings on our Tasman and Pacific Island services have increased 15 per cent since the introduction of the Seats to Suit product, performing far better than we expected. The trans-Tasman is an extremely competitive and important market for us and together with our alliance with Virgin Blue we are in a very strong market position,” Fyfe said.

“Domestic passenger numbers are also up eight percent on the same period last year and we are adding capacity to meet that increased demand as our new domestic A320 fleet arrives.


“Overall passengers load factors increased by 2.6 percentage points over the same period last year, group yield has increased by 3.0 per cent, we have added 2.7 per cent capacity and seen an increase of 6.0 per cent in demand.”

“Cargo revenue has recovered, up 13 per cent compared to last year. Volumes were up 6 per cent on a small capacity increase and a strong 10 per cent increase in yields. Improvements were achieved in all markets with the Pacific and Asian routes being the primary contributors.”

The airline says a key management focus will be assistance and recovery from the recent and devastating Christchurch earthquake, as the airline works with tourism partners to mitigate the economic effects.

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