Air New Zealand says long flights profitable again
WELLINGTON, New Zealand (AP) - Air New Zealand said Thursday its long-distance international flights are profitable again for the first time in five years after it axed its Hong Kong to London route and upped its offerings in Asia.
The national carrier announced Thursday its half-year profit before tax had tripled to 139 million New Zealand dollars ($116 million). After-tax profit was 100 million New Zealand dollars ($83 million). It announced a dividend of 3 New Zealand cents per share, up from 2 cents last year.
Chief Executive Christopher Luxon said in statement that demand was up on domestic routes despite a sluggish economic recovery. He said the airline's long-haul international business returned to the black after changes to its destinations and improvements in its sales execution.
"A key driver in achieving this turnaround has been getting our network right," he said in documents filed with New Zealand's stock exchange. "We recently announced the suspension of the Hong Kong-London route, which has been underperforming for some time."
He said the airline had entered into an alliance agreement with Cathay Pacific for that route.
Luxon said the extra capacity will be "quickly redeployed to growth markets."
The airline announced in January it was increasing the number of flights to Shanghai and Tokyo in response to strong growth in Asian markets.
North American revenue was up 17 percent from a year earlier and up by 9 percent in Asia. Revenue from the U.K. and Europe was down by 18 percent while revenue from Australia and the Pacific Islands was up by 2.5 percent.
"China is now New Zealand's second largest inbound tourist market, after Australia, having recently overtaken both North America and the UK," Acting Chief Sales Officer Norm Thompson said in a January statement.
The company predicts its full-year profits will "comfortably exceed" last year's after-tax profit of 71 million New Zealand dollars ($59 million).
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)