Air New Zealand releases 2024 annual report

Air New Zealand launched its annual report for the 12 months ending 30 June 2024 with outcomes reflecting the challenges of the previous 12 months.

The airline introduced earnings earlier than taxation for the 2024 monetary 12 months of $222 million in comparison with $574 million for a similar interval final 12 months.

This was an anticipated discount on the prior 12 months, when the airline recorded certainly one of its highest ever outcomes following the reopening of New Zealand’s border. Internet revenue after taxation was $146 million.

Whereas Air New Zealand reported a stable first half outcome, the second half of the monetary 12 months proved more and more difficult because the influence of operational and financial headwinds turned extra pronounced.

Financial challenges

The more durable financial backdrop in New Zealand drove a deterioration in home demand within the second half, significantly for company and authorities segments.

Accelerated upkeep necessities for Pratt & Whitney PW1100 engines worldwide have meant that as much as six of the airline’s latest and best Airbus neo plane have been out of service at instances. Ongoing further upkeep necessities on the Trent 1000 engines that energy the present Boeing 787 Dreamliner fleet and diminished ranges of spares out there have meant that as much as three Dreamliners are additionally on the bottom at instances. These points, alongside elevated competitors from US carriers and the cumulative impact of excessive inflation, have had a major influence on the airline’s operational and monetary efficiency for the 2024 monetary 12 months.

Passenger income elevated 11 p.c to $5.9 billion, pushed by a 23 p.c ramp-up in capability, primarily throughout the worldwide long-haul community. This was partially offset by the weaker demand atmosphere and better ranges of competitors. Additionally included inside passenger income is $90 million of credit score breakage for unused buyer credit that have been thought-about extremely unlikely to be redeemed.

Operational prices

Whereas common jet gas costs have been barely decrease for the 12 months, complete gas prices elevated by round $190 million, pushed by capability development throughout the community. Non-fuel working prices elevated sooner than income, additionally pushed by the rise in capability, in addition to broad primarily based inflation throughout the fee base.

Non-fuel working price inflation of roughly $225 million was a major drag on the airline’s monetary efficiency. With touchdown expenses, air navigation charges and engineering supplies main the will increase, the non-fuel working price uplift of six p.c for the 12 months brings the cumulative influence of inflation throughout the previous 5 years to twenty to 25 p.c. Whereas development within the community has supplied some scale advantages, productiveness stays under the degrees achieved pre-Covid because the airline carries further prices to assist handle ongoing disruptions within the provide chain.

Based mostly on the airline’s stability sheet power and the outcome introduced in the present day, shareholders will obtain a closing unimputed extraordinary dividend of 1.5 cents per share, taking the overall extraordinary dividends declared for the 12 months to three.5 cents per share. 

The dividend might be paid on 26 September, to shareholders on report as at 13 September.