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Air New Zealand brings home bumper financial result

August 28, 2014 Financial, Headline News 1 Comment Email Email

egtmedia59Air New Zealand has produced an excellent financial result that the airline very reasonably says everyone working for it can be proud of.

As the carrier’s chief executive, Christopher Luxon, put it: “A successful Air New Zealand is good for everyone – it is a virtuous circle.”

Here are the main points from the result:

  • Normalised earnings before tax of NZD 332 million, up 30%
  • Statutory earnings before tax of NZD 357 million, up 40%
  • Statutory profit after tax of NZD 262 million, up 44%
  • Operating revenue of NZD 4.7 billion, up 1% (3.2% excluding foreign exchange)eGlobal Media-ÃÇÁ
  • Passenger revenue of NZD 3.9 billion, up 2.3% (4.6% excluding foreign exchange)
  • Operating cash flow of NZD 730 million
  • Strong cash position of NZD 1.23 billion
  • Gearing at 42.9%
  • Fully imputed final ordinary dividend of 5.5 cents per share, taking total ordinary dividends for the year to 10 cents per share, an increase of 25%
  • Fully imputed special dividend of 10 cents per share
  • Expected aircraft capital expenditure of NZD 2.2 billion over the next 4 years
  • Moody’s Baa3 investment grade credit rating, outlook stable.

Operating revenue, capacity and yields grew across the network, while unit costs remained stable.

Chairman Tony Carter said that the result represented the third consecutive year of strong earnings growth for the airline.

“This is a result Air New Zealand can be proud of. Our employees, our customers and our shareholders can be confident that Air New Zealand continues to be a world leading airline both in terms of customer experience and financial performance,” Carter said.

“We have made significant progress on our key strategic initiatives. With new aircraft offering better operating economics, an optimised network with the right alliance partners, disciplined cost management and a daily focus on improving the customer experience, we are very well positioned to continue growing.”

Carter said that Air New Zealand would significantly grow its capacity in the coming year, as new aircraft arrived.

“Based on our current expectations of market demand and fuel prices, we expect to improve on the 2014 result in the coming year. This outlook excludes equity earnings from the Virgin Australia shareholding,” he said.

Chief executive Christopher Luxon said the result was testament to the efforts of Air New Zealanders at all levels of the organisation.

“Our team is demonstrating their passion and commitment to ensuring that Air New Zealand is performing better than ever before. A successful Air New Zealand is good for everyone – it is a virtuous circle. As we grow our revenue and control costs, we generate strong financial results which lead to sustainable returns to shareholders and investment back in the business,” Luxon said.

“We have a number of initiatives underway to further improve the customer experience, including induction of the Boeing 787-9 fleet, the refurbishment of our Boeing 777-200ER fleet, moving to new terminals and lounges in Los Angeles and London and multiple lounge upgrades across the network.”

Mr Luxon also commented on the airline’s alliance with Singapore Airlines, which was recently granted full regulatory approval.

“This alliance is the third strategic revenue sharing alliance we have formed in recent years, following agreements with Virgin Australia (reauthorised in 2013) and Cathay Pacific in 2012. Forming alliances with the right partners in the right markets is a key pillar of our Go Beyond strategy.”

“Strong alliances such as this provide us with a platform for sustainable growth, allowing us to open up new routes and markets across the Pacific Rim,” he said.

Edited by : Peter Needham

Currently there is "1 comment" on this Article:

  1. Mark C says:

    pity we don’t have management of this calibre at QANTAS – $2.8 bn loss just announced !!
    the flying kangaroo is very sick……..

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