Air NZ profit expected to be healthy
Friday, 23 Aug, 2006
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Analysts are expecting Air NZ to post a profit of $140 million before interest and tax, as the airline itself indicated in June.
The airline’s optimism was based on a 10 per cent hike in airfares and more demand for premium long-haul seats.
Analysts will also be looking for some confirmation that a heavy number of layoffs and plans for outsourcing will result in lower costs.
It has outsourced aircraft engine maintenance and cleaning, signalled head office cuts and, it is rumoured, plans to outsource most of its finance and ground work to save $250 million.
Looking ahead, persistently high oil prices and the less profitable trans-Tasman and Asian routes are likely to drag on next year’s profitability.
Graham Muldoon
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