View Full Version : Air New Zealand $663 Million profit

26th Aug 2016, 07:31
From the news today

Record breaking: Air NZ's $663m profit - Business - NZ Herald News (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11700587)

mmm not bad

thorn bird
26th Aug 2016, 10:03
Amazing what proper regulation can achieve, love to see what the total contribution to GDB the entire Aviation industry in NZ makes.

26th Aug 2016, 10:30
Air NZ is a great product if you're flying long haul but the truth is there are 2 industries in NZ; the big ticket, and a bunch of lower forms scrabbling around in the dust trying to survive on the leftovers.

Luckily the CAA realizes that there needs to be an industry that isn't totally weighted in AirNZs favour so it does its bit to foster a surviving GA, but only just..

Ollie Onion
26th Aug 2016, 20:30
All of these airlines are making record profit mainly due to the fuel price, they were running very lean and scrapping out smaller profits at $120 per barrel and are now enjoying $50 per barrel. Like Qantas a bit of money has been made through restructuring and cost cutting, also the explosion in Asian tourism, will be interesting to see where they all are if oil goes back over $100. Of course the CEO's will be taking home millions based on a bit of good timing and luck.

26th Aug 2016, 21:09
All of these airlines are making record profit mainly due to the fuel price, they were running very lean and scrapping out smaller profits at $120 per barrel and are now enjoying $50 per barrel.

Very true, and a lot of airlines are still adding fuel surcharges onto tickets as well !! Qantas rolled theirs (some might say concealed !) into the base fare about a year ago. Don't know where NZ stands on fuel surcharge.

Still, credit where its due for a great result, and its good to see the rank and file getting a share of it as a bonus for a change, rather than just the top management.

26th Aug 2016, 23:38
As you say the real acid test will be when fuel prices return to +$100 USD per barrel. This aligned with the increased competition from US/ ME / CN carriers will start to bite and effect their bottom line.

Make hay whilst the sunshines because the clouds are gathering.:ok:

Needle Knocker
27th Aug 2016, 00:43
It was great in absolute $$$ terms, but as a percentage of turnover, it's somewhere around 9% - which can change either way in the blink of an eye.

Ollie Onion
27th Aug 2016, 01:09
Certainly, don't get me wrong, it is great to see big profits and a share going to staff.

27th Aug 2016, 02:01
Its fine saying "what will happen when oil hit $100 a barrel". But back when it was $100 a barrel, QANTAS pulled out of flying from NZ to the USA and a few others pulled out as well.

It has only been while the price of fuel has come down, that there has been increased competition. If the NZ to the rest of the world is a marginal route, then it may be cut when the acid comes back on with fuel prices.

27th Aug 2016, 02:34
I think you'll see increased competition regardless of the price of JetA1. NZ is now a favoured tourism destination. As long as we don't see another GFC the tourism sector will continue to grow.

27th Aug 2016, 10:24
I think the oil situation has changed significantly. The fracking and shale industry has made the barrel price a whole new kettle of fish. I think $100 a barrel is a ways off now. The US have the Ruskies, the Gulf and Greenpeace all grinding their teeth but cheap oil is back

28th Aug 2016, 04:48
Good result. So what happened to their partner in Oz, VA??

Ollie Onion
28th Aug 2016, 04:58
Amongst other things I am pretty sure that Virgin hedged the majority of their fuel for the next 5 years just prior to Oil dropping, if memory is correct they hedged for around $90 per barrel :-(

28th Aug 2016, 08:58
They certainly didn't hedge for 5 years. They are dumb but they are not THAT dumb!
The majority of the bad hedging expires through 2016.

29th Aug 2016, 09:43
I don't see how the fuel hedging alone caused these big losses...

Remember the board had some so-called smart airline type investor representatives including Air NZ. What really went wrong?