Air New Zealand Profit Falls As Competition Bites
Air New Zealand reported a 17.5 percent fall in annual net profit as the airline suffered “an unprecedented increase in the level of competition.”
Profit for the year to end June 2017 came in at NZD$382 million (USD$276 million), as revenue dipped 2.3 percent to NZD$5.1 billion. Pre-tax profit was NZD$527 million, down from the NZD$663 million reported the previous financial year.
Chief executive Christopher Luxon said that in delivering the airline’s second highest profit, it had faced an unprecedented increase in competition from some of the world’s largest airlines.
Although domestic and trans-Tasman revenue increased, Europe fell by over 15 percent, America was down by 12.3 percent, and Asia-derived revenue dropped 6.4 percent.
Group airlines carried 15.95 million passengers during the year, a 5.2 percent increase as New Zealand continued to be a popular destination for international travel, and domestic flying remained strong.
Passenger yield dropped 6.6 percent due to competitive pressure, but cost per available seat km edged down by 0.2 of a percent as aircraft fuel and maintenance costs fell.
Looking forward, the airline said it will continue to grow its domestic network and enter key international markets with the help of revenue-sharing alliance partners. Japan will be a focus for route expansion with the addition of flights to Tokyo Haneda.
The airline said it was optimistic about market dynamics, and based on current market conditions, it is aiming to improve upon 2017 earnings.