Air New Zealand earnings down 24%

Air New Zealand has reported Normalised Earnings before unusual items and taxation of $197 million for the year ended 30 June 2008, a decrease of 24% on last year.

Operating revenue was $4,667 million for the year, up $388 million or 9.1% on the same period last year. The increase was primarily due to additional capacity added both to the domestic and long haul airlines and higher load factors, up 2.8 percentage points to 79.3%. The airline carried 13.2 million customers, which is up 5.6% on the previous year.

The Air New Zealand Board declared a fully imputed dividend of 3.5 cents per share. Dividends declared for the year have totalled 8.5 cents per share, reflecting the 2008 operating performance while recognising the importance of maintaining financial flexibility through what promises to be a period of significant adjustment for the airline industry. The dividend record date is 9 September 2008.

Air New Zealand Chairman John Palmer said the airline's strong operating performance had enabled it to deliver a solid profit against a backdrop of record fuel prices. The cost of fuel increased by $300 million in the past year. Despite fare increases, Air New Zealand continues to only partially recover the increase in the total cost of fuel.

"The current challenges facing airlines are immense but the Board is confident that Air New Zealand is in a good position to create and seize opportunities in both the domestic and international businesses. Our ability to innovate and adapt much more rapidly than many of our competitors, combined with our strong financial position and the strength that comes with having a committed and stable shareholder base, continues to ensure we have a strong platform for growth.

"In 2009, we will continue to examine all aspects of our operations and decisions will be made quickly to ensure capacity closely matches demand. Innovation will again be a key theme in our pursuit of creating world class and uniquely Kiwi travel experiences."

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