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Air New Zealand interim profit takes a nosedive as demand falls
[WELLINGTON] Air New Zealand announced a 34 per cent fall in interim net profit on Thursday and said it was reviewing its operations as high fuel prices and falling demand hit the bottom line.
The airline said net profit for the six months to December 31 was NZ$152 million (S$140.2 million), down from NZ$232 million in the same period a year earlier.
The airline said fuel prices had increased 28 per cent and forward bookings showed domestic demand had slowed.
Chief executive Chris Luxon said it appeared domestic growth in New Zealand was slowing so it was more in line with other developed markets.
As a result, Mr Luxon said the airline was reviewing its network, fleet and cost base, with an update expected by the end of March.
"We pride ourselves at Air New Zealand on being nimble and able to quickly adjust our business to reflect the changing macro environment and this time is no different," he said.
Earlier in the week Air New Zealand announced it was slashing entry-level prices on many of its New Zealand routes in a bid to "supercharge domestic tourism".
The airline, which announced an interim dividend of 11 cents, said operating revenue was up 7.1 per cent at NZ$2.9 billion.
Earnings before taxation, the airline's preferred performance measure, fell 35 per cent to NZ$323 million.
It reaffirmed an estimate released late last month that full-year earnings before tax would be NZ$340-400 million, down from a previous forecast of NZ$425-525 million.