Air New Zealand H1 Net Profit Down 24 Pct

Air New Zealand posted a 24 percent drop in first half net profit to NZD$256 million (USD$184.4 million), as competitors introduced “unprecedented competitive capacity” into the market.

Operating revenue for the six months to end December 2016 of NZD$2.54 billion, was a 4.2 percent dip from the previous year.

Revenue in revenue passenger km terms was up 5.5 percent on an ASK capacity increase of 7.1 percent, resulting in a drop in load factor of 1.3 percentage points to 83.1 percent. Air New Zealand carried 8.1 million passengers in the half.

The domestic network benefited from increased inbound tourism to New Zealand and continued strength in the economy. Recently launched routes to Houston and Buenos Aires performed strongly, the airline said.

Chairman Tony Carter said, “As we look to the second half of the financial year, we expect that the revenue environment will improve from the first half of the year. However, higher jet fuel prices will be a headwind.”

The airline is targeting 2017 earnings before tax to be in the range of NZD$475 million to NZD$525 million.

Air New Zealand has a fleet of 103 aircraft including nine Boeing 787-9s, for which it was the launch customer.