23 Feb 2017

Air NZ's profits down as passengers opt for other airlines

11:23 am on 23 February 2017

Air New Zealand's first half net profit is down by nearly a quarter, amid increased competition on international routes.

An Air New Zealand plane at Auckland Airport.

An Air New Zealand plane at Auckland Airport. Photo: 123RF

The national carrier's net profit fell 24 percent in the six months ended in December, to $256 million, while revenue fell 4 percent to $2.6 billion, over the year earlier.

The company said revenue was expected to improve in the second half, but higher jet fuel prices would be a challenge.

Chairman Tony Carter said the interim profit was impressive in the face of unprecedented competitive capacity into the New Zealand market.

He announced an interim dividend of 10c, unchanged from last year.

"Based on the strength of the result, and the airline's financial position, future capital commitments and trading environment, the Board felt it appropriate to maintain the level of the interim dividend," Mr Carter said.

The company has revised down the top end of its full year underlying profit guidance to between $475m and $525m, from an earlier forecast of $400m to $600m.

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