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Staff bonus as Air NZ posts second highest profit ever

August 25, 2017 Headline News No Comments Email Email

Air New Zealand will pay a bonus of up to NZD 1700 (AUD 1554) next week to about 8500 of it employees who do not have other incentive programs as part of their employment agreement.

The airline has announced earnings before tax for the 2017 financial year of NZD 527 million (AUD 482 million) –the second highest result in the airline’s history. It compares to NZD 663 million in the prior year, the best result ever. The latest result represents a 17.5% fall in annual net profit as the airline suffered “an unprecedented increase in the level of competition from some of the world’s largest airlines”.

The airline’s net profit after taxation was NZD 382 million. Chairman Tony Carter praised the strong result, acknowledging the airline’s staff for their continued focus on driving profitable network growth during a period of significant new competition.http://www.lagunaphuket.com/events/event.php?event=3

Chief executive Christopher Luxon says 2017 has been an exciting and productive year and credits the airline’s staff for their outstanding contribution.

“This year Air New Zealand faced an unprecedented increase in the level of competition from some of the world’s largest airlines and effectively rose to the challenge,” Luxon said.

“The impressive way our team responded to the new competition while at the same time achieving commercial, customer and cultural excellence, helped to deliver our second highest profit ever.”

The airline’s loyalty program, Airpoints, now has more than 2.5 million members, up 16% on the previous year. In Australia, the largest offshore market for Airpoints, membership has grown by more than 17% over the past 12 months.

In 2018, Air New Zealand will continue growing its comprehensive domestic network. The airline sees opportunity coming from inbound tourism as well as strong domestic tourism. Following the rollout of last year’s Northland marketing campaign,A Summer of Safety, a key element of Air New Zealand’s growth strategy will involve continued support to regional stakeholders in developing attractive tourism propositions.

Internationally, the airline’s strategy to enter key markets with the help of revenue-sharing alliance partners and strong market development plans has helped drive successful expansion. In the coming year, Air New Zealand’s offshore growth will focus on the Japan market with the addition of Haneda, as well as increasing services during peak season across routes in the Pacific Islands and North and South America.

Luxon says that recent announcements regarding competitor capacity rationalisation support the airline’s view of a stronger revenue environment in the coming year.

Outlook

Looking forward to the year ahead, the airline is optimistic about the overall market dynamics. Based upon current market conditions and assuming an average jet fuel price of USD 60 per barrel (which represents the average over the past two months), the airline is aiming to improve upon 2017 earnings.

2017 highlights

  • Earnings before taxation of NZD 527 million
  • Net profit after taxation of NZD 382 million
  • Operating revenue of NZD 5.1 billion
  • 16 million passengers carried during the year
  • Capacity increased 6.3%
  • Operating cash flow of NZD 904 million
  • Pre-tax return on invested capital of 15.3%
  • Total annual shareholder return of 88.6%
  • Fully imputed final dividend of 11.0 cents per share, a 10% increase on the prior year, bringing the 2017 full year fully imputed ordinary dividends to 21.0 cents per share
  • Expected aircraft capital expenditure of NZD 1.5 billion over the next 4 years
  • Company Performance Bonus of up to NZD 1700 paid to all permanent employees who do not participate in a Short Term Incentive program
  • Top rated corporate reputation in both New Zealand and Australia
  • Record customer satisfaction levels, with increases in all major areas
  • Awarded New Zealand’s Most Attractive Employer for 2017

A 2017 final fully imputed dividend of 11 cents per share has been declared, an increase of 10% on the prior year, bringing the full year declared ordinary dividends to 21 cents per share.

Edited by Peter Needham

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