Air New Zealand chairman Tony Carter says the Kiwi flag carrier is on track for profit growth in 2014/15 with bookings strong heading into summer.
Carter told shareholders at Air NZ’s annual general meeting in Christchurch on Tuesday it had been an “encouraging start to the year with solid forward bookings into the high season”.
“As we continue to deliver on our strategic priorities, and based on our current expectations of market demand and fuel prices, we expect to improve on the 2014 result in the coming year,” Carter said in prepared remarks.
“This outlook excludes equity earnings from the Virgin Australia shareholding.”
The Kiwi carrier reported net profit after tax of $NZ262m for the 12 months to June 30 2014, up 45 per cent from $NZ181 million in the prior corresponding period. It was Air NZ’s third straight year of profit growth.
Air New Zealand said on August 27 capacity as measured by available seat kilometres was forecast to increase by six per cent in 2014/15.
The increased growth would come from extra seats in the domestic market as Airbus A320 aircraft replaced older Boeing 737s flying around New Zealand, as well as the use of more Boeing 777-300ERs to North America and the replacement of 767s with 787-9s to Asia.
Chief executive Christopher Luxon said the airline’s performance on trans-Tasman routes, which were operated in conjunction with alliance partner Virgin Australia, were performing well despite some Australian dollar weakness.
“While the lower Australian dollar has impacted revenue, we continue to see areas of growth and opportunity,” Luxon said.
“From the early morning business traveller to leisure travellers flying during the day, we have a product that is in demand.”
Air New Zealand owns 25.99 per cent of Virgin and is the Australian flag carrier’s largest shareholder.
Luxon, who sits on the Virgin board, offered encouraging words for Australian airline’s prospects for the period ahead.
“While Virgin Australia’s progress has been impacted by capacity increases outstripping market demand in domestic Australia, they have made inroads in gaining market share, particularly in the corporate market which is a key plank of their Game Change strategy,” Luxon said.
“I look forward to working with other members of the Virgin Australia board to further enhance that business.”
Virgin posted a $A355.6 million loss in 2013/14.