Air New Zealand swings back into the black


WELLINGTON: Air New Zealand swung back into profit in the first half of its current financial year as it benefited from lower costs, a surging kiwi dollar and a major revamp after its near-collapse in 2001. 

The majority state-owned airline said yesterday it was on track to meet its full-year profit forecast, but warned that bookings were down 10% for March and the possibility of war in Iraq and global terrorism had cast a pall over the outlook. 

Larger rival Qantas Airways of Australia sounded a similar warning last week when it posted record first-half profits. 

“There is no doubt ... the uncertain world stage will negatively impact our business, with passenger numbers, yields and fuel prices all likely to be affected,” chairman John Palmer said. 

For its first half ended Dec 31, 2002, Air New Zealand reported a NZ$93.9mil net profit, compared with a one-off driven NZ$376mil loss in the year-earlier period. 

Revenues rose 2% as higher numbers of passengers slightly outweighed cheaper fares after Air NZ launched the domestic no-frills Express class.  

Profit before unusual items and tax came in at NZ$138mil, compared with a NZ$90mil loss in a year earlier, and the airline stuck to its December forecast of a NZ$230mil full-year surplus in core earnings. 

The improved result follows last year’s life-saving NZ$885mil government rescue package and comes as competition regulators study a proposed alliance with Qantas. 

Regulators say a decision could be made sometime around mid-year, with Air NZ hoping to seek shareholder approval in the final quarter of 2003. The airline has said the tie-up with Qantas is needed to ensure its long-term viability. – Reuters  

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