Air NZ hit by quakes, high fuel prices

Thursday 25th August 2011 1 Comment

Air New Zealand's full year normalised earnings before tax fell 45 percent to $75 million, as the airline took hits from earthquakes in Christchurch and Japan, along with high fuel prices.

Chief executive Rob Fyfe said operating conditions in the past six months were cumulatively the most difficult Air New Zealand had faced in the past decade.

The combination of reduced demand for travel as a result of the devastating Christchurch and Japan quakes, additional capacity into Christchurch to help the relief effort and compassionate fares for those affected by the Christchurch earthquakes resulted in an estimated $70m negative impact on earnings, Fyfe said.

Chairman John Palmer said the natural disasters and sustained high fuel prices had "dramatically altered" what had been shaping up to be a positive full year result.

A final divided of 2.5c per share is to be paid, taking the total for the year to 5.5cps.

Revenue from ordinary activities for the 12 months to June 30 was up 7 percent from the previous year to $4.38 billion, while reported net profit slipped 1 percent to $81m.

After tax normalised earnings, which exclude net gains or losses on derivatives that hedge exposures in other financial periods fell 11 percent to $82m.

Comments from our readers

On 26 August 2011 at 12:54 pm Mike said:

And they are issuing 150m of bonds. Wonder if the investors will get their money back.