Air New Zealand H1 Profit Rises

February 25, 2010

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National carrier Air New Zealand's first half profit more than doubled but it said it expected a weaker second half.

The largely state-owned airline said on Friday, net profit for the six months ended December 31 was NZD$54 million (USD$37 million), compared with NZD$24 million a year ago.

The company declared an interim dividend of 3 cents a share, unchanged from last year.

Shares in the company, 77 percent owned by the New Zealand government, closed on Thursday at NZD$1.31.

The stock has risen more than 9 percent so far this year, compared with 2.4 percent fall in the benchmark NZSX-50 index.

Air New Zealand, which has cut costs by using smaller aircraft and axing uneconomic routes, said it expected the second half to be weaker than the first.

It also said the current exchange rate would see a hedging loss of around NZD$20 million from a NZD$24 million gain in the first half.

Earlier this week it reported a rise in the number of passengers carried in January, and said it had reduced capacity more than the decline in demand resulting in a rise in its load factor.

Operating revenue ion the first half was down 15 percent on a year ago but its load factor was up 3 percentage points to 81.6 percent.

Last November the airline said it plans to buy 14 new Airbus A320 planes to replace its fleet of Boeing 737-300s.

It has faced increasing competition in the domestic market, which it dominates, from Australian carrier Jetstar the low cost offshoot of Qantas, and Virgin Blue.

(Reuters)