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Air New Zealand expects 1H pre-tax earnings of $166.8m, on target to exceed FY earnings

Air New Zealand [NZX: AIR] expects first half pre-tax earnings to rise 20 percent from the year earlier on optimism about its December bookings and on certainty about redundancy costs.

The Auckland-based carrier said it expects normalised earnings before tax to increase about 20 percent in the six months ending Dec. 31, including about $10 million of redundancy costs from $139 million a year earlier.

Air New Zealand said it has made "good progress" so far this financial year and is on target to exceed last year's full-year earnings. It didn't provide further details of its full year estimate.

Last financial year, the company more than doubled annual profit to $182 million as it squeezed more revenue from a rising volume of passengers and benefited from favourable foreign exchange movements.

Shares in Air New Zealand rose 0.9 percent to $1.645. New Zealand's government sold a 20 percent holding in the company last month at $1.65 a share, reducing its stake to 53 percent.

The company said today it carried 1.1 percent more passengers in November than the same month last year. Revenue passenger kilometres fell 0.4 percent as capacity declined 2.5 percent, while its group load factor increased 1.8 percentage points to 83.2 percent.

(BusinessDesk)

Comments and questions
5

Yes and once again it is the Provinces that provide 9/10's of that profit, as we are completely screwed here by the Monopoly competitor.
The only way we get a fair suck of the Saveloy, is when a competitor appears on the scene, and Air NZ drops their prices to send it broke.

Cry me a river William, when will small town New Zealand understand that economies of scale are realised on larger aircraft, and that smaller provincial centres only have the demand to warrant small planes! Less seats to split the cost amongst!

Great work Air NZ, a well run efficient airline, putting the Australian aviation market to shame, where might I add, you pay considerably more to fly anywhere also!

Mass redundancies and cost cutting do not grow a business. Where is the expansion? Hawaiian, Singapore, Jetstar Asia, China Southern ... all have expanded their business into New Zealand while Air New Zealand lies down and takes it.

Spot on Nick - it costs ALOT more per passenger to operate smaller aircraft - it just does.

Air NZ support an entire network - and the economics of routes vary radicallly.

Air NZ has tried to support many new very small routes - an expensive exercise indeed.

It is noted by aviation commnetators that NZ's domestic market can economically about 1:3 players only.

Jetstar runs only the main trunk lines -effectively cherry picking. Lets see them get into the hard routes and we'll see how that goes fo rthem.

JetStar is toe to toe with Air NZ on the Tasman, Air New Zealand couldn't hack it in Singapore and pulled out, so Singapore Airlines and JetStar increased services.

Who's running now?