Air NZ posts second highest profit in history

Air New Zealand has announced its financial results for the year, boasting an impressive $540 million profit.

It's the second highest annual profit in the history of the airline, up from $527 million last year.

The airline - which is 53 percent owned by the Government - has committed $150 million of that profit to investing in new cabins, digital products and lounges over the next four years.

The profit is good news for the airline's employees, too; approximately 8500 of them will receive an $1800 bonus.

Shareholders will receive a final dividend of 11 cents per share, taking the total 2018 dividend to 22 cents per share.

The last 12 months have been challenging for Air NZ, with the biggest issue being the ongoing technical problems with engines on its Dreamliner fleet. 

CEO Christopher Luxon thanked the airline's customers for their patience and understanding.

"I want to acknowledge the patience and loyalty of our customers who have been impacted by operational disruptions while travelling with us this year. These disruptions have resulted in a level of service for some that did not meet the high standards we set for ourselves," Luxon said.

To assist the airline in dealing with the engine issue, it has confirmed it'll lease three additional widebody aircraft, two Boeing 777-200s and one Boeing 777-300.

Its a busy year ahead for Air NZ. Soon, it will begin new direct services to Chicago and Taipei as well as adding a third daily service to Singapore.

As well as new routes, the airline will receive new planes.

The airline has ordered ten Airbus A320 NEO's.
The airline has ordered ten Airbus A320 NEO's. Photo credit: Air New Zealand.

Ten Airbus A320/321 NEO aircraft will arrive and begin service on Tasman and Pacific Island routes.

The NEO aircraft have new generation engines and approximately 25 percent more seats.

The outlook for 2019 includes an estimated cost of $30 million - $40 million due to schedule changes related to the global Rolls-Royce engine issues.

Financial Highlights:

  • Net profit after taxation of $390 million, up 2.1 percent
  • Operating cash flow of $1 billion, up 14 percent
  • Fully imputed final dividend of 11.0 cents per share, bringing the 2018 full year fully imputed ordinary dividends to 22.0 cents per share, an increase of 4.8 percent from the prior year
  • Commitment to third short term leased widebody aircraft to further assist with schedule reliability during ongoing maintenance requirements associated with the global Rolls-Royce Trent 1000 engine issues