Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Air New Zealand delivers record interim result

Media release

27 February 2014

Air New Zealand delivers record interim result

Air New Zealand has announced a record interim result for the first half of the 2014 financial year.

The airline today announced normalised earnings[i] before taxation for the half-year of $180 million, an increase of 29% on the previous corresponding period.  Statutory earnings before taxation were $197 million, with net profit after taxation of $140 million, an increase of 40%.

The Board has declared a fully imputed interim dividend of 4.5 cents per share, an increase of 50% over the previous corresponding period.

Chairman Tony Carter says that with stable fuel prices and a traditional seasonal earnings pattern of a stronger first half, Air New Zealand expects to deliver a full year result of normalised earnings before taxation in excess of $300 million.

“Air New Zealand’s Go Beyond strategy is clear.  We have a relentless focus on global sales and marketing excellence, combined with a keen eye on continuously improving our cost base while delivering a world class customer experience,” Mr Carter says.

Chief Executive Officer Christopher Luxon says the hard work of Air New Zealand’s 11,000 staff has placed the airline in a position where it is able to adapt to a changing macro-economic and competitive environment.

“As we continue through a period of strong earnings growth, we are demonstrating that we can deliver increasing returns to shareholders.  Our improved commercial results are also enabling us to invest in the customer experience, explore new markets and invest in our people and culture,” Mr Luxon says.

“The journey ahead is shaping up as incredibly exciting, particularly given the positive economic outlook in many of our key revenue markets.  We are well placed to take advantage of this, with significant fleet additions soon to arrive. We expect to deliver capacity growth of around 8 percent in the 2015 financial year as new Boeing 787-9s and 777-300s enter our fleet from the middle of this calendar year. Additionally, new Airbus A320 and ATR72-600 aircraft will be growing capacity in our Domestic network over the next year.”

Mr Luxon says the combination of a competitive cost base and economies of scale achieved through growth will be a material benefit for Air New Zealand in the coming years.

“We have worked hard on improving our cost base in an environment where we have not grown. In fact, we have reduced our capacity flown overall as we realigned our long-haul network. With new fleet additions and capacity growth, our scale grows.  Our new aircraft will be significantly more efficient than those they replace and having fewer aircraft types drives unnecessary complexity out of our operations.”

Mr Luxon says that a reducing cost base also allows Air New Zealand to continue to price fares competitively.

“We are keenly focused on ensuring that air travel is more affordable for more Kiwis than ever before whether they are flying from the main centres or regional airports.  Equally, we want to seize on the growing demand for New Zealand as a destination and ensure both our pricing and our sales and marketing draw traffic away from competing destinations.”

Mr Luxon says a highlight of the first six months of the 2014 financial year was the continuing strength of Air New Zealand’s alliances.

“Through our alliance partnerships we are able to offer more connections, frequencies and destinations than ever before. Alongside our 27 Star Alliance partner airlines we also have deep individual alliance relationships with Virgin Australia and Cathay Pacific and look forward to working on our new relationship with Singapore Airlines.”

Air New Zealand and Singapore Airlines recently unveiled a proposed new alliance which, subject to regulatory approval, would see the return of Air New Zealand onto the Singapore route and enable customers to access codeshare travel on Singapore Airlines’ extensive global network.

“Forming the right alliances with the right partners allows us to deliver on our strategy of profitable growth as a Pacific Rim airline.”

Mr Luxon says Air New Zealand continues to be optimistic about the future of Virgin Australia.

“Virgin Australia has a sound strategy and I look forward to helping the airline to realise its potential when I join its Board.  We are confident that over the coming years Virgin Australia can deliver consistent earnings performance.”

Result highlights:

•          Normalised earnings before taxation of $180 million, up 29%

•          Statutory earnings before taxation of $197 million, or $140 million after taxation, up 40%

•          Revenue of $2.3 billion

•          Unit cost improved by 3%

•          Operating cash flow of $300 million

•          Net cash position of $1.13 billion

•          Gearing of 43.9%

•          Fully imputed interim dividend of 4.5 cents per share, an increase of 50%

•          Baa3 investment grade credit rating – outlook stable (Moody’s)


Click for big version.
 

Ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>

BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>

Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>


BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Housing: More House Price Gains Expected

House price expectations remain high, with a net 56% of respondents expecting house prices will increase. Fears of higher interest rates are fading, consistent with the RBNZ’s signals this year. Affordability and a lack of houses for ... More>>

TDDA: State-Of-The-Art Drug Testing Laboratory To Open In Auckland

World leading drug testing agencies, The Drug Detection Agency (TDDA) and Omega Laboratories, open New Zealand laboratory More>>

Network: Bigpipe Launches Ultra-Fast Broadband Into Wellington

Bigpipe Launches Ultra-Fast Broadband into Wellington Naked broadband provider Bigpipe has extended its national reach, announcing today, the launch of its unlimited UFB offering into Wellington. The Spark Venture business is giving Wellingtonians the ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news