26 Aug 2015

Air NZ shares record profit with staff

1:36 pm on 26 August 2015

Up to $11 million is heading to the pockets of thousands of Air New Zealand staff, after the company declared a record profit today.

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Photo: RNZ / Diego Opatowski

The company has reported net profit after tax of $327 million in the year to June. Operating revenue jumped 5.9 percent to $4.9 billion, while operating cash flow of $1.1 billion was up 51 percent on the year before.

As a result, about 8,000 staff, who are not in other incentive schemes, will each get up to $1400.

Engineering, Printing and Manufacturing Union organiser Strachan Crang said the bonus was an acknowledgment of the work staff did to increase the airline's profitability.

The airline said lower fuel prices, more people flying and efficiency gains had all contributed to the increased profit.

As it announced the record profit, the airline said it expected to offer passengers more than than two million domestic fares for less than $100 over the next year.

Chief executive Christopher Luxon said it was looking to develop the domestic market, including regional routes, and an 8.4 percent increase in the number of seats was planned. With Jetstar and other smaller airlines adding capacity throughout New Zealand, there would be "lots of good competition".

Chairman Tony Carter said given the airline's current state, its increased capacity and improvement in efficiency, it expects to do even better this financial year.

"Our strategic initiatives over the past three years have positioned us well to take advantage of market dynamics which have contributed to these results," he said.

Today's result is the fourth consecutive rise in annual profit. In the year to June 2014, annual net profit went up 45 percent to $262 million, as the carrier held costs while increasing capacity and passengers.

Last week, Australia's national carrier Qantas turned around its financial woes with a full-year, after-tax profit of $A557 million, compared to a loss the year before of $A2.84 billion.

It too pointed to lower fuel prices and cost cutting; it had saved $894 million over the past year in cost reductions which allowed it to pay down more than a SA1 billion in debt.

Qantas chief executive Alan Joyce said every airline had benefited from lower fuel prices, but said Qantas was "outperforming the market." The airline's accounts show that almost half of its total $1.2 billion cost reduction over the year was due to lower fuel cost

As a result of Air New Zealand's profit increase, 8000 staff will get a $1400 bonus payment, paid to employees who are not on other incentive programmes.

The board has declared a fully imputed final ordinary dividend of 9.5 cents per share, an increase of 73 percent on the previous year.


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