Feb 25 Air New Zealand’s half-year net profit after tax jumped 154 percent to NZ$338 million ($225 million), the company said on Thursday.
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Chief executive Christopher Luxon said on the long-haul network it was pleased with demand and performance on new routes to Houston and Buenos Aires.
Mr Carter concluded that based upon current market conditions and assuming current fuel prices and foreign exchange rates, the airline is targeting earnings before taxation for the full year 2016 to exceed $800 million.
The airline, which is majority-owned by the New Zealand Government, is increasing its six month dividend to shareholders by 54 percent to 10 cents per share. That was due in large part to the fall in the price of aviation fuel. Even though it did 16 per cent more flying during the last six months it used only 12 per cent more fuel – the promised savings from new planes are materialising.
“Our network will provide more frequency, more routes and competitive prices throughout New Zealand and the Pacific Rim, combined with modern aircraft offering better operating economics”, he says.
Luxon said it was in good shape to take on that competition.
Air NZ shares listed in Australia have risen 5.6 per cent in the last 12 months, besting a 17.8 per cent rise in the benchmark S&P/ASX200 index over that period but underperforming relative to the 37.6 per cent rise in Qantas shares. “In recognition of the opportunity, we will continue to build our presence in Australia”.
He said it was still early days with respect to competition from Jetstar on regional routes but so far the impact had been less than expected. Domestic capacity grew 11 percent during the half while yield declined 3.9 percent.
Air New Zealand’s stake in Virgin and its share of the Christchurch Engine centre earnings contributed $15 million and $10 million respectively for the half. This outlook excludes equity earnings from the Virgin Australia shareholding.
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Lower fuel prices boosted pretax earnings by NZ$184 million, Air New Zealand said.
