Cheaper fuel helps Air NZ more than double profit

The All Blacks in Chicago. Timothy Hiatt/Getty Images for Air New Zealand

Air New Zealand posted a 154% rise in half year profit to $NZ338 million, joining other airlines including Qantas in announcing improved earnings and savings from cheaper fuel, cost cutting and efficiency improvements.

Earnings before tax rose 132% to $457 million for the six months to December, driven by exceptionally strong passenger revenue growth on a 16% capacity growth across the network. Passenger revenue was up 16% to $2.3 billion.

Air New Zealand also benefited from substantially lower jet fuel prices and the airline says economies of scale and business simplification drove incremental profitability of $NZ106 million.

CEO Christopher Luxon says the airline has received a tremendous response to expansion in the domestic market with passenger demand up 10%.

The Tasman and Pacific Island markets continue to perform strongly for the airline.

“New Zealand continues to be not only a destination that is in big demand for Australians but it is also a gateway to North America, South America and the Pacific Islands for travellers from Australia,” he says.

“This traffic is adding to the strength of Air New Zealand’s services to these markets. In recognition of the opportunity, we will continue to build our presence in Australia.”

Air New Zealand’s 25.9% investment in Virgin Australia contributed $NZ15 million during the first half.

The airline declared a fully imputed interim dividend of 10 cents a share, an increase of 54%.

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