Air New Zealand doubles interim profit despite lower sales

WELLINGTON, Feb 26, 2010 (AFP) - National airline Air New Zealand said Friday it more than doubled its first half net profit despite a fall in revenue as it reined in operating costs.

Net profit in the December half rose to 56 million dollars (41 million US) from 24 million dollars in the previous first half, the state-controlled airline said.


Operating revenue fell 15 percent to 2.1 billion dollars as passenger demand declined 4.6 percent, but this was offset by lower fuel costs and a fall of 11 percent in non-fuel operating costs, the airline said.

"The fallout from the global financial crisis continued to make operating conditions extremely difficult," said Air New Zealand chairman John Palmer.

"At the same time, fuel prices have returned to more stable levels following unprecedented volatility in the 2009 financial year."

The airline said trading was improving, although demand and average fares still remained significantly lower than before the global financial crisis.

"The challenge remains to improve passenger numbers and yields," it said.

Its forecast that the second half was expected to be weaker than the first because of seasonal factors saw its shares fall two cents to 1.29 dollars by the close on the New Zealand Stock Exchange.

If current exchange rates continue, there would be a foreign exchange hedging loss of around 20 million dollars in the second half compared with a gain of 24 million dollars in the first half.


by Lachlan Carmichael
(c) 2010 AFP