Air New Zealand cruises back to profit in post-Covid rebound

Thursday, 23 February 2023

Air New Zealand has regained the wind beneath its wings, returning to profit for the first time since the Covid-19 pandemic.

Air New Zealand’s profit has rebounded strongly to $213 million after tax in the six months to December 31 on the back of strong revenue growth as the national carrier continues its recovery from the Covid-19 downturn.

The result turns around a $272m loss for the same period a year earlier.

Air NZ reported three years of losses after the Covid-19 pandemic closed international borders to travellers.

Chairperson Dame Therese Walsh said the result “reflects an important milestone in our recovery and places us in a strong position to deliver on our strategy”.

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When the boarder reopened the airline had quickly returned aircraft to service, relaunched 29 routes, onboarded more than 3000 staff and carried 8 million passengers between July and December – “the busiest period we’ve seen in over three years”, Walsh said.

”This result means we can continue to invest in our fleet, our people and our decarbonisation goals,” she said.

The airline expects to make a full year profit before other significant items and tax of $450m to $530m, she said.

The board would also consider paying shareholders a dividend to shareholders in August.

Air New Zealand is majority owned by the Government.

Chief executive Greg Foran said the result was delivered against a backdrop of significant labour, supply chain and operational pressures that had challenged the airline, and the entire global aviation system.

Business travel was strong across the Tasman and to the Pacific Islands. Long haul routes were performing well to North America and Asia.

Staff numbers were almost back to normal on the domestic network and about 85% on the Tasman, but only about 60% on long hour routes, Foran said.

The recovery was well underway and operating performance was improving steadily, “but like most airlines globally, we continue to experience challenges that make it hard at times to deliver the level of service we expect of ourselves, and our customers”, Foran said.

“We know we have more work to do to tackle customer concerns like long wait times at our call centres, getting planes to depart and arrive on time, lost baggage and getting refunds back in a timely manner.

“We’re very aware that flying is not currently the pain-free experience it should be and getting back into shape is a key priority.”

The airline was facing higher costs for fuel, labour and other supplies which meant air fares were higher than they were before the Covid pandemic, he said.

A key focus had been to bring back capacity to minimise the impact of higher fares. Six Boeing 777-300ER widebody aircraft had been returned to service as well as three new Airbus A321neo aircraft on the domestic network and a leased aircraft to serve the Auckland to Perth route, Foran said.