Australia key to Air NZ result

AIR New Zealand this morning reported a NZ$540 million pre-tax profit result for the year to 30 Jun - its second best ever - with Australia a “standout performer” in driving the performance, according to NZ chief commercial officer, Cam Wallace.

Speaking to TD this morning, Wallace said both short- and long-haul markets continued to be well supported by the trade.

The strong result will see a bonus of up to NZ$1,800 each paid to about 8,500 NZ permanent employees not participating in a short-term incentive program.

The carrier had record operating revenue of NZ$5.5 billion, up 7.4%, and achieved its earnings guidance despite a “fuel price headwind” which added more than $130 million to costs.

Ongoing investments will see the upcoming launch of new non-stop services to Chicago and Taipei plus additional Brisbane flights from Wellington and Queenstown, while the airline is also expecting to start taking delivery of 10 Airbus A320/321neo aircraft which will provide “continued growth and cost benefits to the Tasman and Pacific Islands network”.

NZ also announced it would lease three Boeing 777s to deliver greater schedule reliability as it continues to work through the maintenance requirements on its 787s relating to the global Rolls- Royce Trent 1000 engine issues.

The changes will free up two widebody aircraft and allow retiming of flights to Buenos Aires and Tokyo Haneda.

Another key development for Air NZ is the upcoming cessation of its trans-Tasman alliance with Virgin Australia, which terminates on 28 Oct, and the subsequent launch of the airline’s new codeshare deal with Qantas.

Wallace said he was excited about the opportunity to “compete more aggressively on the Tasman with a deeper schedule, new routes, updated planes and a fantastic codeshare connecting partner who will provide us with the best product and most comprehensive access to the Australian domestic market”.