28 Feb 2013

$100m half year profit reported by Air NZ

10:18 pm on 28 February 2013

Air New Zealand's half year profit has soared to its highest level in five years.

The airline made $100 million in the six months to December, nearly triple for the same period a year earlier due to more people flying on its planes and higher air fares on long haul flights.

Excluding one-off items and unrealised accounting changes, Air New Zealand's normalised pre-tax earnings rose sharply to $139 millon.

Revenue rose 4% to $2.4 billion, helped by long haul operations moving into profit for the first time since the 2008 global financial crisis, while costs were reduced in part due to newer, more efficient planes. Net cash stands at $1.1 billion.

The airline said it will comfortably exceed last year's pre-tax normalised earnings of $91 million.

Shares rose 2.6% to $1.38 in early trade, hitting their highest since mid-December.

Air New Zealand will pay an interim dividend of three cents per share to investors, who include the Government which holds 75%.

Chief executive Christopher Luxon said the airline is now well positioned for growth. He said at the end of last year at the full year results Air New Zealand said it would more than double its performance in the coming year and it's well on track for that.

Radio New Zealand's business editor said airline industry has struggled in recent years, due to a slump in air travel following the global financial crisis, high fuel prices and intense competition.

While Air New Zealand has not been immune, it has stood out for being one of the few profitable airlines in the world.

But Thursday's result bettered the expectations of most analysts and it is Air New Zealand's best half year profit in five years.