Air New Zealand profit more than doubles

Auckland, New Zealand) – Air New Zealand today announced earnings before taxation of $256 million for the 2013 financial year, an increase of 172 percent on the previous year and the company’s best result in five years.

The net profit after taxation was $182 million, which is $111 million or 156 percent up on the previous year.

Operating cash flow was the highest ever at $750 million, and the company reported cash holdings of $1.15 billion. Gearing improved seven percentage points to 39.1 percent, a record low for the airline.

A fully imputed final dividend of 5.0 cents per share has been declared, taking the total dividend for the year to 8.0 cents per share, a 45 percent increase on the previous year.

Chairman John Palmer says the result places Air New Zealand amongst the best performing airlines globally. “We are focused on further improving on this result in the 2014 financial year. Based on the airline’s forecast of market demand and fuel prices at current levels, early results and forward bookings are encouraging.” he says.

“This result is one that investors, Air New Zealanders, customers and our nation can be proud of. It marks the start of an exciting new phase as Chief Executive Officer Christopher Luxon and his management team drive their Go Beyond strategy to grow the airline,” Mr Palmer says.

“Strong results allow Air New Zealand to reinvest in its products, services, training and development to further enhance the customer experience and to connect more people and businesses than ever to, from and within New Zealand.”

Air New Zealand has committed to investing NZ$1.8 billion in aircraft over the next three years.
The aircraft due to enter the Air New Zealand fleet over the next three years are:

· 2 Boeing 777-300ERs
· 6 Boeing 787-9s
· 9 Airbus A320s
· 4 ATR72-600s

“There can be no greater vote of confidence in the growth potential of the airline, and of the attractiveness of New Zealand as an international destination, than expanding and upgrading our fleet. Alongside this we continue to actively pursue new alliance partnerships and destinations to grow our traffic.”

Chief Executive Officer Christopher Luxon says the desire of Air New Zealanders to deliver further sustainable commercial success and take the customer experience to the next level is something that would be the envy of many companies.

“We have 11,000 people working together with the goal of growing Air New Zealand and further enhancing our award-winning customer experience. We have a range of initiatives that will roll out during the 2014 financial year as we reinvest in the business to keep us ahead of the competition.

“We are more customer centric than we’ve ever been and the growth in membership of our Airpoints™ programme during the last year shows that our products and services are resonating with customers. Airpoints™ membership is now 1.4 million, up 17 percent on the previous year,” Mr Luxon says.

“The relentless focus we have on growing Air New Zealand is not just confined to the passenger side of the airline. Our Cargo team delivered an outstanding result for the year against a tough industry backdrop.”

Mr Luxon says Air New Zealand delivering its best result in five years would not have been possible without the outstanding leadership John Palmer has shown as Chairman since he was appointed in late 2001.

“Air New Zealand would not be the airline it is today without John Palmer’s leadership of the Board for more than a decade. He took on the hardest governance job in the country following the recapitalisation of Air New Zealand and has recruited and supported three Chief Executive Officers and their management teams to rebuild the airline to again make it a profitable, customer centric, globally award-winning airline that New Zealand can be proud of.”

Mr Palmer will retire as Air New Zealand Chairman at the Annual Shareholders’ Meeting in Auckland on September 27 this year. He will be replaced by Deputy Chairman Tony Carter.

Key points:

· Earnings before taxation of $256 million, an increase of 172 percent

· Net profit after taxation of $182 million, an increase of 156 percent

· Operating revenue $4.6 billion, up three percent

· Operating cash flow of $750 million, a record for the Group

· Gearing improved seven percentage points to 39.1 percent, a record low

· Fully imputed final dividend of 5.0 cents per share, taking total dividend to 8.0 cents per share