Published on : Thursday, August 24, 2017
Air New Zealand is expecting to boost its earnings this year due to strong domestic economy and expansion of new routes. The national carrier reported pre-tax earnings of $527 million for the year to June 30 – down from $663m from the previous year. Net profit fell to $382m from $463m in 2016.
Chief executive Christopher Luxon said that it was a strong profit and the company knew that it would be challenging because of tough competition.
“This year Air New Zealand faced an unprecedented increase in the level of competition from some of the world’s largest airlines and effectively rose to the challenge,” Luxon said.
Luxon said the domestic market had been the most resilient with extra seats being brought on board. The airline had a 9 percent increase in the number of seats on domestic flights in its 2017 financial year and will boost seat numbers by another 60,000 this summer increasing services to Nelson and Napier. Luxon said half of the growth had come from Queenstown.
The airline had faced a tough challenge in Asia, particularly with strong competition from China with a number of new airlines launching new routes.
Luxon said in-bound tourism from Japan had been hit by the Kaikoura earthquake in November last year but the company had launched a new route to Haneda Airport in Tokyo, hoping it would boost demand. Luxon said Kiwis’ outbound travel had grown by 12 per cent this year, a third of which was to the Pacific Islands.
The airline was also adding frequency to its Honolulu and Bali services. Luxon said it continued to see strong demand on its routes to North America, even after seeing 30 percent capacity growth.
The airline will add more premium seats to its Houston flight as it targets Australians travelling to the states via Auckland. Luxon said it expects 4 to 6 per cent capacity growth in 2018.
Tags: Air New Zealand