Air NZ shows the way with profit surge
While Qantas was outlining the parlous state of its business in Sydney, across the Tasman Air New Zealand revealed a record interim result for the first half of the 2014 financial year.
The airline’s net profit after tax was NZ$140 million, an increase of 40%.
Normalised earnings before taxation for the half-year were NZ$180 million, an increase of 29% on the previous corresponding period.
Chairman Tony Carter said that with stable fuel prices and a traditional seasonal earnings pattern of a stronger first half, Air New Zealand expects to deliver a full year result of earnings before tax in excess of NZ$300 million.
Chief executive Christopher said the outlook for Air New Zealand was "incredibly exciting".
"We expect to deliver capacity growth of around 8% in the 2015 financial year as new Boeing 787-9s and 777-300s enter our fleet from the middle of this calendar year," he said.
"Additionally, new Airbus A320 and ATR72-600 aircraft will be growing capacity in our domestic network over the next year."
Luxon said the combination of a competitive cost base and economies of scale achieved through growth would be a material benefit for Air New Zealand in the coming years.
"We have worked hard on improving our cost base in an environment where we have not grown.
"In fact, we have reduced our capacity flown overall as we realigned our long-haul network. With new fleet additions and capacity growth, our scale grows.
"Our new aircraft will be significantly more efficient than those they replace and having fewer aircraft types drives unnecessary complexity out of our operations."
Luxon praised the "continuing strength" of Air New Zealand’s alliances, including relationships with Virgin Australia and Cathay Pacific.
Air New Zealand and Singapore Airlines recently unveiled a proposed new alliance which, subject to regulatory approval, would see the return of Air New Zealand onto the Singapore route.
Ian Jarrett
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