Air NZ Profit
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Air NZ Profit
Confident Air NZ in black with $148m net
By Scott Rochfort
August 29, 2003
Air New Zealand countered the recent global aviation downturn to post its first profit in four years although management warned the airline's future depended on the proposed $520 million alliance with Qantas.
Less than two years after being rescued by a $NZ885 million government rescue package, Air NZ's chief executive, Ralph Norris, said the airline was in its best financial shape in its entire history.
In stark contrast to the previous year's $NZ319 million loss, Air NZ reported a full-year net profit of $NZ165.7 million ($147.7 million), with revenues down marginally at $NZ3.6 billion.
Net operating cash flows rose from $NZ56 million the previous year to $NZ523 million.
The impact of the SARS crisis, the Iraq war and recent rash of losses across the industry made the result more remarkable, according to some analysts.
The vastly improved result was helped by Air NZ slashing its cost base by $NZ169 million, with fuel charges falling $NZ54 million and maintenance costs falling $NZ32 million, thanks in part to the stronger NZ dollar.
Aside from the $NZ22 million in labour costs, the airline benefited from a $NZ18 million fuel hedge gain, compared to the $NZ15 million loss the previous year.
With the New Zealand Commerce Commission holding a hearing last week over the proposed alliance between Air NZ and Qantas, Mr Norris said he was even more confident of the deal being passed, despite the airline's stronger financial position.
Mr Norris said the Kiwi airline faced the threat of "being marginalised and deteriorating over a number of years".
"The issue from our perspective is that the alliance is about what's likely to happen over the next three to five years and not over the past 12 months," he said.
Citing the demise of Ansett and the inability of Canada - which has a population seven times bigger than NZ - to sustain even two domestic carriers, Mr Norris said the expected entry of Virgin Blue would make Air NZ's survival even more questionable.
Air NZ chairman John Palmer added: "Layer on top of this the fundamental shift in the competitive landscape, through the success of the low cost airlines, and it is not difficult to see why many airlines have disappeared.
"The turnaround, from profitability to bankruptcy, for many of these airlines was very rapid. The combination of high levels of financial gearing with high levels of operating leverage can result in brutally fast endings to long and successful business histories."
I cannot understand how they can not be liable for paying the money owed to the Ansett Ground Staff Superannuation fund
By Scott Rochfort
August 29, 2003
Air New Zealand countered the recent global aviation downturn to post its first profit in four years although management warned the airline's future depended on the proposed $520 million alliance with Qantas.
Less than two years after being rescued by a $NZ885 million government rescue package, Air NZ's chief executive, Ralph Norris, said the airline was in its best financial shape in its entire history.
In stark contrast to the previous year's $NZ319 million loss, Air NZ reported a full-year net profit of $NZ165.7 million ($147.7 million), with revenues down marginally at $NZ3.6 billion.
Net operating cash flows rose from $NZ56 million the previous year to $NZ523 million.
The impact of the SARS crisis, the Iraq war and recent rash of losses across the industry made the result more remarkable, according to some analysts.
The vastly improved result was helped by Air NZ slashing its cost base by $NZ169 million, with fuel charges falling $NZ54 million and maintenance costs falling $NZ32 million, thanks in part to the stronger NZ dollar.
Aside from the $NZ22 million in labour costs, the airline benefited from a $NZ18 million fuel hedge gain, compared to the $NZ15 million loss the previous year.
With the New Zealand Commerce Commission holding a hearing last week over the proposed alliance between Air NZ and Qantas, Mr Norris said he was even more confident of the deal being passed, despite the airline's stronger financial position.
Mr Norris said the Kiwi airline faced the threat of "being marginalised and deteriorating over a number of years".
"The issue from our perspective is that the alliance is about what's likely to happen over the next three to five years and not over the past 12 months," he said.
Citing the demise of Ansett and the inability of Canada - which has a population seven times bigger than NZ - to sustain even two domestic carriers, Mr Norris said the expected entry of Virgin Blue would make Air NZ's survival even more questionable.
Air NZ chairman John Palmer added: "Layer on top of this the fundamental shift in the competitive landscape, through the success of the low cost airlines, and it is not difficult to see why many airlines have disappeared.
"The turnaround, from profitability to bankruptcy, for many of these airlines was very rapid. The combination of high levels of financial gearing with high levels of operating leverage can result in brutally fast endings to long and successful business histories."
I cannot understand how they can not be liable for paying the money owed to the Ansett Ground Staff Superannuation fund
