Air New Zealand reported an 8.8 per cent fall in half-year, adjusted pre-tax profits, which the airline blamed on a weak cargo market and the ongoing unrest in Hong Kong.
Greg Foran, who started work as chief executive on 3 February, said he would conduct a business performance review in his first 100 days in office.
The results come days after Air New Zealand warned coronavirus could cost it NZ$35–$75 million, and suspended services to Shanghai and Seoul.
Foran said in a statement, “Our business is resilient, and we have demonstrated the ability time and again to respond quickly to changing market conditions. We have a highly capable and experienced senior leadership team who have dealt with challenges such as this before, and I am confident that we will effectively navigate our way through this.”
Air New Zealand posted a mixed set of financial results on Wednesday.
The airline’s profit before significant items and tax was NZ$198 million in the six months to 31 December, down from NZ$217 million a year earlier.
Earnings before taxation were $139 million and net profit after tax was $101 million.
An interim dividend of NZ$0.11 per share was maintained, while operating revenue rose 3 per cent, driven by strong demand for domestic and Pacific island networks.
Meanwhile, operating costs increased 3.5 per cent, caused by price rises in domestic air navigation and landing charges as well as a weaker local dollar.
The results will concern stakeholders as they don’t reflect the ongoing impact of the coronavirus outbreak. As well as temporarily pausing services to Shanghai and Seoul, the airline has announced capacity reductions to Hong Kong and Japan.
Foran said, “By proactively reducing these services we are better able to manage the cost implications of making late changes to our network and can redirect our most efficient aircraft, the Boeing 787 Dreamliner, to other parts of the network.
“Air New Zealanders from across the business have been working around the clock to manage the impact of the COVID-19 outbreak on our operations.
“As I travel around the various parts of the business, it is clear that what makes Air New Zealand stand out from its global competitors is the enthusiasm and dedication of our people. Their focus on providing our customers with the best service will continue to be a key differentiator as we look to set the airline up for future success.
“Air New Zealand holds a special place in the hearts of New Zealanders, and we take that responsibility very seriously.”
The results come a day after Virgin Australia posted a $97 million half-year loss and announced its Tigerair brand was to dramatically reduce its fleet by cutting seven A320s.
It means Tigerair will soon operate less than half the number of aircraft it had in its ranks two years ago.