Air New Zealand has reports interim profit of $198 for H1, ending I December 31, 2019, a slight decline on the $217 million it posted for the first six months of the year.
In a statement, accompanying the results the carrier said this fall reflecting a number of market factors, “the slower demand growth environment, weakness in the global cargo market and the ongoing unrest in Hong Kong”.
While operating revenue growth of 3% 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 was undercut by weaker cargo demand, increased competition on the Tasman route and the impact of disruptions in Hong Kong.
Operating costs increased 3.5 percent in the period, which the carrier said was a result of significant price increases in domestic air navigation and landing charges, as well as a weaker New Zealand dollar.
Chairman Dame Therese Walsh says the firm has quickly adapted to the evolving situation surrounding the coronavirus outbreak. "Our capacity discipline on existing routes, stimulation of leisure traffic with the domestic fare restructure and entrance into attractive new international markets has driven good revenue performance in the first half.
On February 24, Air New Zealand announced a number of changes to its network as a result of the coronavirus outbreak, both to China and other Asia Pac markets that are showing a weakening in demand, resulting in a 17% lowering of capacity to the region.
Based on current assumptions around capacity and fuel prices Air New Zealand said it expected the coronavirus outbreak to negatively impact earnings in a range of $35 million to $75 million.
Air New Zealand report small fall in H1 profits
