Air New Zealand has reported earnings before other significant items and taxation of NZ$198 million for the six-month period ended December 31, 2019, compared to NZ$217 million in the prior period, reflecting the slower demand growth environment, weakness in the global cargo market and the ongoing unrest in Hong Kong. Earnings before taxation were NZ$139 million and net profit after taxation was NZ$101 million.
Operating revenue growth of 3 percent was driven by solid demand across the airline’s Domestic and Pacific Islands networks, as well as recently launched services into Asia and North America. This helped to mitigate weaker cargo demand, increased competition on the Tasman and the impact of disruptions in Hong Kong.
Operating costs increased 3.5 percent in the period, impacted by significant price increases in domestic air navigation and landing charges, as well as a weaker New Zealand dollar. Maintenance costs for third party contracts also increased, however this was more than offset by the related revenues. Fuel costs increased 1.1 percent, as an improvement in the underlying fuel price was offset by foreign exchange and fuel volumes resulting from growth in the International network. (US$1 = NZ$1,58 at time of publication)
