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Profit down but Air New Zealand remains strong
Air New Zealand has announced a Net Profit before Unusuals and Tax of $81 million for the six month period ending 31 December 2005, a 45 % decrease ($65 million) on the same period last year.
Net Profit after Tax was $46 million, a 55% decrease ($56 million) on the previous period.
Despite this, the Company has grown yield and traffic by $136 million over the half year, implemented significant cost savings and continues to drive for further overall efficiencies.
“It is quite clear that the Airline is facing unprecedented fuel costs, which have unduly affected the result for this period,” said Chairman John Palmer. “A 36 percent increase in fuel prices over this period combined with a reduction in fuel hedging gains has placed considerable pressure on earnings.”
“The Airline is firmly confident of its strategic direction,” said Chief Executive Officer Rob Fyfe. “Despite very difficult operating conditions, we have clear visibility of the changes we need to make to ensure this Company remains competitive.”
Mr Fyfe said streamlining and simplifying the business would now dominate his agenda.
“Air New Zealand will become a nimble and fast moving airline, able to rapidly adapt to change more quickly than its competitors. I am determined to implement the necessary measures to ensure this happens.”
Mr Fyfe said the 2006 financial year and some of the 2007 financial year will serve as transition periods.
“By December 2006, the new long-haul product will be on all routes. The Airline will have a refreshed brand identity in place.
“New route opportunities and a distinctive new New Zealand themed customer experience offer the chance to grow the business by opening up new markets and luring back customers.
“We are also on track to realise $100 million in cost savings in 2006 with a further $115 million in savings in the 2007 financial year, an increase of $35 million on previous targets,” Mr Fyfe said.
Graham Muldoon
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