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Air New Zealand Reports Strong Profit Increase

Air New Zealand Reports Strong Profit Increase

2015 08 27

2015 08 27

Air New Zealand forecast strong earnings growth in the current year as it posted record annual net profit thanks to more passengers and lower fuel prices.

The national carrier, which is 52 percent state-owned, announced a net profit of NZD$237 million (USD$153.22 million) in the year to June 2015, up 24 percent from the previous year.

Revenue rose 6 percent after the airline increased capacity in domestic and international routes.

Passenger yields grew 2.5 percent on domestic flights compared with 2.8 percent a year earlier. On international routes, the yield fell 1.3 percent versus a 0.9 percent rise.

The company said it expected to achieve "significant" earnings growth this financial year with capacity to grow 11 percent as it expands its international routes.

It declared a dividend of 9.5 cents per share.

Air New Zealand has been preparing for Australian budget airline Jetstar, a subsidiary of Qantas Airways, flying to more regional destinations. Ending unprofitable routes and retiring aircraft has allowed for lower fares and improved efficiency, Air New Zealand said.

"We've got some competition to deal with but we feel we've been quite sensible about it (lowering fares) and most of it (costs) we've been able to recover quite a bit of," chief executive Christopher Luxon said.

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