30 Aug 2013

Air NZ predicts even better results

7:16 am on 30 August 2013

Air New Zealand expects to produce an even better result from the current year than the annual net profit it made in the 12 months to the end of June.

Chairman John Palmer, who will retire at the annual shareholders' meeting in September after 12 years in the role, says Air New Zealand's early results and forward bookings are encouraging.

He said the company expects to improve on its just announced result, although there is a caveat with regards to the global situation in terms of market demand and fuel prices.

Mr Palmer said the results give a very good start to 2014.

Air New Zealand's net profit for the year rose to $182 million from $71 million in the previous year and that was its third best result ever.

Driving the results, the airline flew 2.2% more passengers in the 12 months and its revenue per passenger kilometres rose 2.7%.

Air New Zealand owns nearly 20% of Virgin Australia which is expected to announce an annual net loss between $A95 - $A110 million later on Friday.

Chief executive Christopher Luxon stressed that Air New Zealand's investment in Virgin Australia is a long-term strategic position.

Although the Virgin Australia results were disappointing, he said it has achieved a lot.

Mr Luxon said Virgin Australia is taking on its competitors in its home market and has changed its reservation system which will ultimately help it connect with other airlines around the world.

He said the airline is also reaching out to new customers through the Tiger and Skywest acquisitions.

"Those are strategies that I think we are all very, very supportive of and very confident will pay off in the long-run."

Virgin Australia was valued at $261 million at 30 June compared with its $207 million market value on Thursday.