Response to change is key to performance, says Air NZ CEO
AUCKLAND – Air New Zealand has announced earnings before taxation of NZ$26 million for the six-month period ended December 31 2008, a decrease of 84 percent on the same period last year.
Net profit after tax was NZ$24 million, down 79 percent.
Operating revenue increased by 3.7 percent or NZ$87 million on the same period last year to $2.4 billion for the first half of the year.
Foreign exchange movements contributed to $75 million of this improvement.
Air New Zealand chairman John Palmer said the past six months has been one of the toughest periods airlines have faced.
“Fuel costs reached unprecedented levels in 2008, with the average spot price increasing 36 percent on the same financial period last year adding an extra NZ$211 million to the fuel bill.
“This combined with the deterioration in both passenger and cargo demand, as the global credit crisis intensified, has seen the airline deliver an unsatisfactory financial result, despite the management team’s best efforts,” Palmer added.
Chief executive Rob Fyfe said the key priority remains closely matching supply to demand.
“In the first half of 2009, we have taken a proactive approach to capacity management that has been more agile and disciplined than in past industry downturns.
“In these challenging times, it is not the largest airlines that will outperform, but the ones most responsive to change.”
Air NZ will reduce long-haul capacity by 14 percent and remove 100 long haul cabin crew positions.
Other cost saving measures include pilots taking leave without pay, giving staff on individual contracts the opportunity to work fewer hours, introducing part-time hours for cabin crew, not replacing non-safety sensitive roles, not renewing temporary contracts and a freeze on executive salaries.
Fyfe said Air New Zealand would continue to vigorously defend its position in the Tasman and domestic markets.
He added, “I am confident that Air New Zealand is in one of the strongest positions to weather the current economic climate. We are nimble, have $1.4 billion cash in the bank, modest gearing and a team of 11,800 people committed to being world class."
Ian Jarrett
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