Air New Zealand's annual profit up 45 percent

Staff Writer
Columbus CEO

WELLINGTON, New Zealand (AP) — New Zealand's national airline on Wednesday posted a 45 percent increase in annual profit and said it expects to benefit from the fuel efficiency of 787-9 Dreamliners it is adding to its fleet.

Air New Zealand announced a net profit of 262 million New Zealand dollars ($218 million) for the financial year ended June. Revenue was up 1 percent to NZ$4.7 billion.

The company was the launch customer for the 787-9 and took delivery of the first jet in July. It plans to begin using it on commercial flights between Auckland and Perth in October. The company plans to buy 10 of the new planes, which are an extended version of the 787. It has also been updating other planes in its fleet.

Chairman Tony Carter said in a statement Wednesday it was the carrier's third straight year of strong earnings growth. He said the carrier's new aircraft were able to operate more profitably and it was benefiting from alliances with other airlines.

He said the company's passenger capacity will grow significantly in the coming year as new airplanes arrive.

Carter said the carrier expects an improved result next year, based on its current assessments of demand and fuel costs, and excluding earnings from Virgin Australia, in which it owns a 24.5 percent stake.

The company's shares were up 1.4 percent to NZ$2.18. after the earnings announcement. Its strong results have contrasted with financial losses and job cuts announced this year by Australia's flagship airline, Qantas.

Air New Zealand was recently granted regulatory approval for an alliance with Singapore Airlines. It also has alliances with Virgin Australia and Cathay Pacific.

The carrier is 53 percent owned by the New Zealand government. It has gained international attention for its quirky inflight safety videos, which have featured actress Betty White, hobbits, and Sports Illustrated swimsuit models.