27 Feb 2014

Air NZ soars, Qantas plummets

8:35 pm on 27 February 2014

Air New Zealand has reported a record first-half profit - a result it attributes to hard work and a relentless focus on global sales and marketing.

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Photo: RNZ

The airline's net profit rose by 40 percent to $140 million for the six months to December, compared with $100 million in the same period a year earlier.

Air New Zealand says it's well placed to take advantage of the positive economic outlook in many of its key markets.

It says significant additions to its fleet are also due to arrive soon, which it expects will grow its capacity by the next financial year.

Chair Tony Carter says that under a five-year "Go Beyond" strategy the company has worked hard to improve the cost base, realign the international network and invest in new aircraft.

Air New Zealand has lifted its dividend by 50 percent to 4.5c.

Qantas deep in the red

It's a different story across the Tasman, where Qantas has announced a statutory after-tax loss of $A235 million for the six months to December, compared with a $109 million profit for the same period last year.

It made an underlying before-tax loss of $A252 million compared with a profit of $A220 million.

Alan Joyce announcing the cuts at a news conference in Sydney on Thursday.

Alan Joyce announcing the cuts at a news conference in Sydney on Thursday. Photo: AFP

It has also announced it's cutting the equivalent of 5000 full-time jobs - about 15% of its workforce - as part of savings measures worth more than $A2 billion. It says the job losses will come from every division - including maintenance, cabin crew, catering and management.

Fifty planes will be sold, including the old 747 fleet, and unprofitable services will be dropped.

Chief executive Alan Joyce says the moves are necessary as the current position is unsustainable, but the national secretary of the Transport Workers Union, Tony Sheldon, says staff are bearing the brunt of bad management.

"This is a company and a board of directors that have had a policy that has failed for the last six years - losses for most of those years - and the only thing that's gone up is their executive salaries of 82 percent since 2010 whilst destroying hard-working Australian's jobs."

The Australian government is expected to make an announcement on the airline's plans in the next few days.

The Australian Prime Minister Tony Abbott says he grieves with Qantas workers who face an uncertain future, but he has ruled out providing a debt guarantee, because that would be unfair to other businesses.

  • The Unite union in New Zealand says Qantas has not told it if there will be job losses here, though it expects to hear something soon. Qantas employs managers at Auckland, Wellington and Christchurch airports, and has 120 staff at its Auckland call centre.