By Jenny Ruth
Thursday 13th January 2011 1 Comment
|Text too small?|
Air New Zealand's capacity discipline and strong demand have driven its high load factors and positive yield growth which are contributing to operating earnings momentum, says Craigs Investment Partners.
That's despite unfavourable currency hedging and rising fuel costs providing a slight headwind, the broker says. Air New Zealand has hedged 91% of its US dollar operating cashflow requirements at 66 US cents compared to the year-to-date average 74 cent spot price.
The airline's passenger numbers were up 8.1% in the five months ended November and up 11% in November. "As demand recovers, capacity is being added at a slower pace, driving record load factors," it says.
Craigs says the Rugby World Cup and the Virgin Alliance on the Tasman route "arguably provide further upside to full-year 2012 estimates, should they be executed successfully."
The broker has raised its earnings per share forecast for the year ended June 2011 by 5% and its 2012 forecast by 8%.
It is forecasting net profit in the year ending June 2011 will be $150 million, up from $82 million the previous year, rising to $231 million in 2012.
Key risks to its forecasts include increased fuel costs, New Zealand dollar weakness and a weaker macro backdrop, Craigs says.
Air NZ plans to raise stake in Virgin Australia to 25.9 percent after gaining approvals
Air NZ keeps balance sheet plump, holds back on dividends as fleet renewal looms
Air New Zealand plans to close Auckland maintenance facility, cut 180 jobs, union says
Air NZ's Safe Air unit cuts 84 jobs in Blenheim as contracts end
Air NZ agrees to settle cartel case, expects earnings at upper end of guidance
Air NZ lifts stake in Virgin Australia to 23 percent , may creep up to 26 percent
Air NZ backs down on challenge to cargo suit against regulator
Air New Zealand reviews Japan flights as decline in yen makes travel more expensive
Ex-Foodstuffs boss Carter to head up Air NZ board
Air NZ shares jump 5.6 percent as airline flags annual earnings to more than double