Challenging regional market conditions are expected to continue dampening the prospects of Air New Zealand (ANZ) and its 50%-owned partner Ansett Australia. The tougher conditions were already evident in the results for the 12 months ending 30 June.
ANZ relied on marginal improvements to domestic performance to produce a profit of NZ$129.7 million ($64 million) on revenue of NZ$2.6 billion, in the face of falls in international capacity and yield, which resulted overall in an 11.6% profit reduction compared with last year.
Ansett chief executive Rod Eddington warns that the Australian carrier's "modest" pre-tax A$28 million ($16.3 million) operating profit represents only 0.8% on A$3.7 billion revenue, "-less than 1% in every dollar, and still a long way from the 10% trading profit margin required to sustain the business". ANZ says its results were also hit by adverse foreign exchange movements.
Source: Flight International
