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UPDATE 1-Air New Zealand posts 24 pct fall in half-year profit as competition heats up
February 22, 2017 / 8:20 PM / 9 months ago

UPDATE 1-Air New Zealand posts 24 pct fall in half-year profit as competition heats up

(Adds background, details on competition and oil prices)

WELLINGTON, Feb 23 (Reuters) - Air New Zealand posted a 24 percent decline in half-year profit on Thursday, hurt by rival airlines expanding rapidly into the market.

Low oil prices and double-digit growth tourism to New Zealand propelled earnings to record profits last year.

Competitors like Emirates, Tianjin Airways and China Southern have also sought to gain a greater slice of the tourism boom, increasing the number of flights to New Zealand. Qatar Airways this month launched one of the world’s longest flights between Auckland and Doha.

Net profit for the national carrier came in at NZ$256 million ($183.86 million) for the six months to Dec. 31, down from a half-year record of $NZ338 million in the same period last year.

Chairman Tony Carter said that the airline faced, “unprecedented competitive capacity into the New Zealand market.”

It will pay an interim dividend of NZ$0.10 per share, in line with NZ$0.10 a year ago.

The company forecast full-year earnings between NZ$475 to NZ$525 million. It has previously guided for a full-year pre-tax profit between NZ$400 million and NZ$600 million

Air New Zealand said that higher oil prices, which jumped 50 percent in the last year, had not affected the its half-year results, but increased fuel costs would be a headwind in the second half.

The New Zealand carrier may also face further headwinds on U.S. routes if an attempt by American Airlines < AAL.O> and Qantas Airways to revive their partnership under the Trump administration is successful. ($1 = 1.3924 New Zealand dollars) (Reporting by Charlotte Greenfield; Editing by Toby Chopra)

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