Air New Zealand result a tale of two halves
Natural disasters and fuel prices surge pulls Air NZ profit down 45%.
A rough second half of the financial year - including major earthquakes in Christchurch and Japan - has seen Air New Zealand (AIR) post a profit before tax of $75 million, down 45% on the year prior.
Air NZ says in full year to June results released this morning, the 12 months was split between brilliant and disastrous - with a $112 million profit booked in the fist six months, and a $37 million losses posted in the second.
“Natural disasters and sustained high fuel prices dramatically altered what was shaping to be a very positive full year result,” chairman John Palmer says.
Chief executive Rob Fyfe says long-haul routes have been responsible for weekly losses exceeding $1 million since January, partly due to the high New Zealand dollar.
“International markets remain volatile and this has an impact on the demand for New Zealand as a destination,” Mr Fyfe says.
Briefing notes supplied with the results describe the turbulence in the international financial environment as "concerning".
The high dollar appears to have also caused the airline to book a $95 million net loss from foreign exchange hedging.
Group operating revenue increased to $4.341 billion, up from $4.045 billion.
Operating expenses surged to $3.678 billion from $3.338 billion.
The results flag a potential bond offer in the future, with improved results in the next financial year contingency on fuel price reductions and an improvement in global economic conditions.
Matt Nippert
Thu, 25 Aug 2011
Thu, 25 Aug 2011
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Air New Zealand result a tale of two halves
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