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


Virgin folds NZ accounts into Aussie parent as revenues fall

Wednesday 09 November 2016 10:23 AM

Virgin folds NZ accounts into Aussie parent as revenues fall

By Fiona Rotherham

Nov. 9 (BusinessDesk) - Financial results from the New Zealand end of Virgin Australia’s trans-Tasman operations are no longer being reported separately although its annual group accounts show revenue from New Zealand falling markedly in the 2016 financial year.

During the 2016 financial year, Virgin Australia Airlines (NZ) transferred all its assets, liabilities, rights and obligations to its parent, Australia’s second-largest airline.

A remaining $2.15 million liability from the New Zealand arm was forgiven under the agreement. Financial accounts for VAA (NZ) were still prepared on a going concern basis although the only separately reported numbers this year were auditor costs and share capital and reserves. Last year the New Zealand subsidiary reported a $98,000 net loss on revenue of $194 million.

VAA (NZ)’s operations are now included under the group’s International division in its consolidated accounts. In the group’s full-year accounts to the end of June 2016, passenger and other service revenue from inbound and outbound services between Australia and New Zealand fell to A$154.7 million from A$218.2 million the prior year. That’s shifted New Zealand from the second highest revenue earner by market, behind Australia, to last place, although a number of countries are lumped under ‘other’.

An airline spokesman said that figure only recorded revenue that could be directly tracked from New Zealand and didn’t reflect trans-Tasman revenue as it omits bookings to New Zealand from Australia. It also said the figure wasn’t 100 percent reliable.

Full-year accounts for Virgin Australia (NZ) Employment and Crewing, which provides crew for Virgin’s transTasman flights, show revenue of just under $50 million, on par with the previous year. Net income was $10,000 attributable to its parent, while accumulated losses were $40,000.

Virgin Australia last week reported an underlying loss before tax of A$34.6 million for the first quarter of the 2017 financial year, blaming subdued industry trading conditions, particularly in the domestic market. The result includes the impact of restructuring charges.

Domestic revenue fell 3.9 percent to A$4.28 billion while its international division, which now includes New Zealand, increased by 8.6 percent to A$706 million. Load factor was unchanged at 84.8 percent.

Air New Zealand divested its stake in Virgin Australia during the year, mainly to Chinese company Nanshan Group, while continuing its long-standing codeshare alliance with the Australian airline on the trans-Tasman network. The A$67.5 million sale in October of its remaining 2.5 percent stake, which had been diluted from 6 percent due to Virgin’s private placement with HNA Innovation in June, will show up as a gain on sale in the New Zealand airline's 2017 results. That will partly offset the $86 million loss on the divestment recorded in the 2016 results.

Air New Zealand remains the largest player in the trans-Tasman market, though a growing number of carriers and increased capacity has whittled its market share to around 35 percent, despite passenger growth, and competition has lowered air fares.

Air NZ’s accounts show passengers carried on the Tasman and Pacific Islands routes gained 3.15 percent during the June 2016 financial year while passenger revenue per available seat kilometres fell 1.1 percent to 9.9 cents. An analysis of revenue by geographic region at point of sale showed Australia and the Pacific Islands at $619 million, down $20 million on the prior year. It said it expected competitive pressures on the routes to continue in 2017.



© Scoop Media

Business Headlines | Sci-Tech Headlines


Westpac: Sets Out Plan To Go Cheque-Free

Westpac NZ has announced details of its plan to phase out cheques, after signalling in May that it would be supporting a move to other forms of payment. Cheques will cease to be available as a means of payment after 25 June 2021. Westpac NZ General ... More>>


NZTA: Major New Zealand Upgrade Programme Projects Go To Tender

Two major New Zealand Upgrade Programme projects are beginning tenders for construction. The New Zealand Upgrade Programme is a $6.8 billion investment to get our cities moving, to save lives and boost productivity in growth areas. The first Auckland ... More>>

Reserve Bank: RBNZ Seeks To Preserve Benefits Of Cash

The Reserve Bank – Te Pūtea Matua is taking on a new role of steward of the cash system “to preserve the benefits of cash for all who need them”, Assistant Governor Christian Hawkesby told the Royal Numismatics Society of New Zealand annual conference ... More>>


Economy: Double-Dip Recession Next Year, But Housing Rolls On

New Zealand's economy is expected to slip back into recession early next year as delayed job losses, falling consumer spending, and the absence of international tourists bites into growth. More>>


Microsoft New Zealand: Microsoft Expands “Highway To A Hundred Unicorns” Initiative To Support Startups In Asia Pacific

New Zealand, 14 October 2020 – Today Microsoft for Startups launches the Highway to a Hundred Unicorns initiative in Asia Pacific to strengthen the region’s startup ecosystem. This follows the initiative’s success in India, where 56 startups were ... More>>

Fonterra: Farmers Taking Another Step Towards New Zealand’s Low Emissions Food Production

They’re hot off the press and intended to help take the heat out of climate change. Fonterra farmers are already among the world’s most sustainable producers of milk and now have an additional tool in their sustainability toolbox. Over the last few ... More>>


Courts: Businessman Eric Watson Sentenced To A Four-Month Jail Term

New Zealand businessman Eric Watson has been sentenced to a four-month jail term in the UK for contempt of court, TVNZ reports. More>>

OECD: Area Employment Rate Falls By 4.0 Percentage Points, To 64.6% In Second Quarter Of 2020

The OECD area employment rate – the share of the working-age population with jobs – fell by 4.0 percentage points, to 64.6%, in the second quarter of 2020, its lowest level since the fourth quarter of 2010. Across the OECD area, 560 million persons ... More>>

Spark: Turns On 5G In Auckland And Offers A Glimpse Into The Future Of Smart Cities

Spark turned on 5G in downtown Auckland today and has partnered with Auckland Transport (AT) to showcase some of the latest in IoT (Internet of Things) technology and demonstrate what the future could look like for Auckland’s CBD with the power of 5G. 5G is ... More>>

Stats NZ: Monthly Migration Remains Low

Since the border closed in late-March 2020, net migration has averaged about 300 a month, Stats NZ said today. In the five months from April to August 2020, overall net migration was provisionally estimated at 1,700. This was made up of a net gain ... More>>

University of Canterbury: Proglacial Lakes Are Accelerating Glacier Ice Loss

Lake Tasman, New Zealand | 2016 | Photo: Dr Jenna Sutherland Meltwater lakes that form at glacier margins cause ice to recede much further and faster compared to glaciers that terminate on land, according to a new study. But the effects of these glacial ... More>>


Dairy: Fonterra Sells China Farms

Fonterra has agreed to sell its China farms for a total of $555 million (RMB 2.5 billion*1), after successfully developing the farms alongside local partners. Inner Mongolia Natural Dairy Co., Ltd, a subsidiary of China Youran Dairy Group Limited ... More>>