Profits and confidence at Air NZ
Air New Zealand’s record profit probably won’t mean your next flight is cheaper, but the airline’s boss still reckons it is a great time to be a traveller here.
That is because of new market launches, increasing competition bringing more options for travellers, and money being ploughed back into upgrading or buying new aircraft, lounges and technology, chief executive Christopher Luxon said.
And with the number of people signed up to the Airpoints loyalty programme jumping by nearly a fifth to 2.2 million last year, customers seem interested.
Air NZ said yesterday it had made a record after-tax profit of $463m for the year ended June 30, the highest in its 76-year history.
This led to a $2500 bonus for a big portion of its staff, as well as a $260m dividend for the Government, which owns just over half of the company.
But while Luxon would not say the 42 per cent profit increase would result in airfares being slashed, he suggested the takeaway from the company’s best-ever result was that it was ‘‘a great time to be a traveller in New Zealand’’.
‘‘You’ve got so much competition coming into the marketplace, you’ve got Air NZ growing very strongly with big international markets and big growth domestically,’’ Luxon said.
Growth in tourism had been a big driver of the nation carrier’s performance, as Air New Zealand and its partner airlines, including United Airlines, Cathay Pacific and Singapore Airlines, bring about 45 per cent of visitors to the country.
New aircraft, like the Boeing 787-9, also increased fuel efficiency, which for a company which spends nearly $1 billion a year on it, helped keep costs down.
But he also warned this year would not produce another record, as the level of competition soared.
The confidence remained, however, because of three to four years of taking profits and ‘‘ploughing them straight back in the company.’’
Air NZ launched services to Buenos Aires, Houston, and Ho Chi Minh city in the second half of last year, which had gone much better than expected.
Flights to the Philippines were announced and then put on ice, where they remained amid security concerns.
Luxon said the airline still saw plenty of opportunity for new routes, but had nothing to announce just yet.
‘‘There’s still millions of consumers or potential visitors we’ve got to reach out to and build the proposition with. But every quarter we’re looking at new markets or emerging or potential new markets, in Asia, the Americas and Australasia, and that’s something that’s ongoing.’’