New Zealand’s national airline notched up an after-tax profit of NZ$412 million, which represents a more than billion-dollar turnaround from the 2022 financial year, in which the carrier had a net loss of NZ$591 million.
The airline has attributed the large profit to travel demand that “exceeded expectation” since New Zealand’s borders began reopening to international visitors in stages from April 2022.
“As we reflect on the year that’s been, we’re conscious that a strong financial result for the airline comes at an increasingly uncertain time for many of our customers and the wider economy,” said Air New Zealand’s CEO, Greg Foran, in a video discussing the airline’s financial results.
“Our result was delivered in the context of an extraordinary operating environment which provided unique tailwinds for the business.”
Foran acknowledged that the airline had experienced significance challenges during the performance period, including long contact centre wait times, delayed flights, lost baggage and issues with providing refunds.
“We’ve also not fully resolved these issues, but performance is much improved,” he said, adding that working on these shortfalls “remains a top priority for us”.
“When Aotearoa New Zealand’s borders reopened in July 2022, Kiwis desire to travel exceeded all expectations,” said Air New Zealand’s CFO, Richard Thomson.
“Even though we made an early start retraining pilots, undertook our biggest hiring programme ever and brought aircraft back from desert storage as quickly and safely as possible, supply was constrained, particularly in the first half of the year.”
The airline has now returned to 94 per cent of its pre-COVID domestic capacity, while international capacity is a 71 per cent, with Air New Zealand having returned to 30 international destinations so far.
Foran also acknowledged the increased cost of flying, but said it was likely to remain elevated.
“We know increased costs and high demand have made flying more expensive. In the past year we put more aircraft and seats in the air, so there are more choices for customers which helps alleviate the cost of flying,” he said.
“At the same time, our own costs continue to rise and the reality is that airfares are unlikely to return to pre-pandemic levels.
“After several volatile years it’s great to be back in the black and standing on our own two feet especially given we have more than $3.5 billion in aircraft investment coming over the next five years.
“Today we also announced an order for two new ATR turboprop aircraft for regional routes, as well as two new Airbus A321neos for our international short-haul network. That’s in addition to the existing domestic Airbus A321neo orders, and the eight new Boeing 787 Dreamliners we have coming into the fleet as we retire our Boeing 777-300s over time.”
Air New Zealand said that travel demand remained strong for the 2024 financial year, but that there was significant uncertainty related to continued customer demand and the airline’s profitability due to factors including increased international competition, volatile fuel prices, a weaker New Zealand dollar, ongoing wage inflation and increased airport charges.