Air NZ earnings meet forecast

Thursday 26th August 2010

Air New Zealand has posted normalised earnings before tax of $137 million for the year to June 30, broadly in line with expectations.

The results were down 6% on the previous period, as the lingering effects of the global recession continued to put pressure on demand.

Operating revenue for the period fell to $4 billion, down from $4.6 billion, as yields fell 7.1% and traffic declined 4.7%. This was offset by a 2.8% improvement in load factors as capacity was slashed and an increase in cargo volumes in the second half.

"The uncertainty surrounding the recovery of global economic conditions has continued to suppress demand for air travel over the past 12 months," said John Palmer, the airline's chairman

"This has been a really tough period and improving service while maintaining profit is a significant Air New Zealand achievement, by comparison with our global airline peers."

Air New Zealand slashed costs by $4 billion in the period, through improved fuel efficiencies, a reduction in headcount, reduced aircraft operations and passenger service costs and improved net finance costs.

The airline also benefitted from a stronger kiwi dollar, which resulted in a net $113 million dollar positive impact on the translation of foreign revenues and costs.

The company declared a fully imputed dividend of four cents per share, taking total dividend for the year to seven cents, an increase of 8% on the previous period.

Air NZ shares rose 1.7% to $1.23 after the announcement.

Businesswire.co.nz

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