Air New Zealand returned to profit reporting net profit of $412 million for financial year 2023 (FY23) ending in June 30. The airline closed the FY23 with total revenue of $6.330 billion, up from $2.734 billion in FY22. The airline’s passenger revenue amounted to $5.349 billion versus $1.476 billion, cargo revenues dropped to $628 million from $1.016 billion while revenue from contract services were slightly higher to $133 million from $117 million.
The airline’s overall revenue per available seat kilometer (RASK) excluding fuel improved to 15.5 cents, up from 13.9 cents.
Air New Zealand reported an operating expanse of $5.044 billion versus $2.738 billion citing more flying, higher fuel prices, staffing costs and inflation. Direct labor costs were up by 15% as the airline rebuilt its workforce to 11.474 people. Variable costs were up by 21%, with the total cost base up by 16%. Costs per ASK were up by 40.3%to 14.03 cents. The fuel bill increased to $1.5 billion from $560 million. Fuel is hedged 54% for FY24.
The operating profit reached $1.286 billion, up from $-4 million last year. The profit before tax and significant items improved to $585 million from $-725 million. The net profit was $412 million compared to $-591 million. The airline reported cash flow of $937 million.
Air New Zealand will pay out $200 million in special dividends to shareholders. The airline has $2.6 billion in liquidity. Gross debt stood at $3.3 billion, and net debt at $0.4 billion.
“After several volatile years it’s great to be back in the black and standing on our own two feet,” said chief executive, Greg Foran. “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. At the same time, our own costs continue to rise and the reality is that airfares are unlikely to return to pre-pandemic levels.”
Air New Zealand ended the financial year this June at 94% domestic capacity compared to 2019 and bookings at 100%. Overall capacity in revenue passenger kilometers (RPK) was up by eighty% year on year to 36 million.
The airline carried a combined 15.8 million passengers, up from 7.7 million, which is two million short of 2019 levels. The load factor improved to 84.7% from 67.1%. The domestic network produced the highest results with 10.9 million passengers, up from 6.8 million.
The international network saw 1.5 million passengers versus 175K in the previous year, 37 percent behind pre-pandemic levels. The airline’s international bookings are at 86%. On the Tasman and Pacific Islands network, ANZ carried 3.4 million passengers versus 752K.
“The focus for FY24 will be on maintaining a resilient domestic operation with increased productivity and higher aircraft utilization. Domestic capacity is expected to grow by on average zero to five percent. The international network will be further optimized, in part thanks to deepening the alliances with partner airlines,” the airline said in a statement.
“Looking ahead to the first half of the 2024 financial year, customer demand remains strong across our markets. We are mindful of the uncertain economic environment however and acknowledge a number of factors that may impact future customer demand and profitability. These factors include increased international competition, volatile fuel prices, a weaker New Zealand dollar, ongoing wage inflation and increased airport charges. Given the uncertainty and volatility of some of these macroeconomic factors, the airline will not be providing guidance at this time,” the statement added.