Air New Zealand paying dividends once more as it posts $412m annual profit

Air New Zealand has made a strong full year profit, as it continues to return to business-as-usual.

However, the national carrier was not offering guidance for this year, given an uncertain economic environment, increasing competition, volatile fuel prices, a weaker New Zealand dollar, wage inflation and increased airport charges.

Key numbers for the 12 months ended June vs year ago:

  • Net profit $412m vs net loss $591m
  • Revenue $6.45bn vs $2.75bn
  • Underlying profit $585m vs underlying loss $725m
  • Special dividend of 6 cents a share.

Chief executive officer Greg Foran said the result followed a year in which the airline balanced customer, staff, community, and shareholder needs, while making investments for the years ahead.

"We have rehired and trained in a tight labour market, lifted the starting wage for the airport teams to $30 an hour and improved the way we work with digital systems on the ground and in the air," he said.

Air New Zealand had restored services to 500 flights a day following a few difficult years of Covid-19 disruptions.

"We know increased costs and high demand have made flying more expensive," he said, adding that airfares were unlikely to return to pre-pandemic levels.

"After several volatile years it's great to be back in the black and standing on our own two feet especially given we have more than $3.5b in aircraft investment coming over the next five years."

The airline said it had ordered two new ATR turboprop aircraft for regional routes, as well as two new Airbus A321neos for the international short-haul network.

Those aircraft were in addition to the existing domestic Airbus A321neo orders, and eight new Boeing 787 Dreamliners which will join the fleet when Boeing 777-300s were retired.

The airline was also retrofitting 14 787s with the new premium business services and a refreshed cabin product.

Foran said the airline was focused on improving customer service.

"Contact centre wait times have, on average, reduced by 75 percent since December, we've introduced an enhanced app, and we've had a step change in on time performance and more importantly, a reduction in cancellations.

"This June we were one of the best airlines in the Asia Pacific region at arriving on time, so we have momentum." he said.

However, Foran said the airline had faced a number of challenges over the past year.

"We were tested during the Auckland floods and Cyclone Gabrielle, but pleased to be able to help the Napier and Gisborne communities with direct flights when roads linking the cities were washed away."

Looking ahead to the first half of the 2024 financial year ending June, the airline said customer demand remained strong across its markets.

Sales growth by region for the 12 months ended June vs year ago:

  • New Zealand $3.87b m vs $2.03b
  • Australia and Pacific Islands $838m vs $221m
  • Asia, United Kingdom and Europe $710m vs $247m
  • America $909m vs $235m
  • Total operating revenue $6.33b vs $2.73b.