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Air New Zealand flies to record profit

Friday, August 26, 2016 - 14:50

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Air New Zealand announced an operating windfall Friday, posting a record NZ$463 million (S$457.11 million) after-tax profit, up 42 per cent, as the country benefits from a tourist boom.

[WELLINGTON] Air New Zealand announced an operating windfall Friday, posting a record NZ$463 million (S$457.11 million) after-tax profit, up 42 per cent, as the country benefits from a tourist boom.

It was "the best result ever" in the 76-year history of the New Zealand national carrier, chief executive Christopher Luxon said.

The before-tax profit for the year to June 30 stood at a record NZ$663 million, up 40 per cent, with passenger revenue up 8.9 per cent to NZ$4.5 billion.

The record numbers coincide with New Zealand recording 3.31 million short-term visitor arrivals in the year to June 30, up 11 per cent on the previous year.

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Mr Luxon expressed confidence in the future, believing the airline was well-placed to meet increased competition ahead.

"There's no doubt customers have more choice but we are confident that we have the right pricing, products and services to stay a step ahead of the competition as we grow our business at home and overseas," he said.

But given the uncertain impact of competition, and based on the current market conditions, Air New Zealand forecast pre-tax earnings for the full year 2017 to be in the range of NZ$400 million - NZ$600 million.

The airline is to pay an ordinary dividend of 10 cents per share, bringing the full-year dividends to 20 cents per share, up 25 per cent on the previous year.

Employees will also benefit from the record performance with a bonus of up to NZ$2,500 to be paid to 8,200 staff not covered by other incentive programmes.

Air New Zealand shares dropped 0.45 per cent to NZ$2.22 in Wellington trading following the announcement.

Earlier this week, Air New Zealand's main regional rival, Qantas, reported a record annual net profit of A$1.42 billion (S$1.46 billion) in a strong turnaround after major restructuring.

It saw the company pay a dividend of seven cents per share, its first payout since 2009.

AFP

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