Air New Zealand doubles net profits; AirAsia and Tiger Airways return to profitability in Dec-2009


Air New Zealand's shares fell 0.8% yesterday, ahead of the release of the carrier's financial results for the six months ended Dec-2009 this morning.

  • Air New Zealand reports a doubling of net profit in the six months to Dec-2009, despite declining passenger demand and yields.
  • AirAsia returns to profitability in 4Q2009 but experiences a 20% reduction in unit passenger revenue.
  • Tiger Airways reports a recovery in profit in the Dec-2009 quarter, driven by increased passenger numbers and stronger load factors.
  • Cathay Pacific and Air China sign a Framework Agreement to establish a jointly-owned cargo airline.
  • Air New Zealand's shares fall ahead of the release of its financial results, while AirAsia and Tiger Airways' shares also decline despite reporting profits.
  • Cathay Pacific's shares gain slightly, while Air China's shares fall after the announcement of the cargo airline joint venture.

The carrier reported a more than doubling of net profit in the six months to 31-Dec-2009, as the carrier reduced costs in response to declining passenger demand and yields. The carrier's shares have fallen 2.3% in early morning trading today. The carrier's shares have risen by approximately 9% in 2010, compared with 2.4% fall in the benchmark NZSX-50 index.

See related report: Air New Zealand doubles net profitability but warns of tougher second half conditions

AirAsia back to black in 4Q2009, but unit revenues suffer

AirAsia's shares slipped 0.7% yesterday, despite the carrier reporting is best ever annual profit and returning to profitability in 4Q2009 (with a net profit of USD23 million and an operating profit of USD94 million), as the economic crisis boosted demand for cheaper air travel.

However, while benefiting from the economic environment, the LCC has not been immune to the effects of the crisis, reporting a 20% reduction in unit passenger revenue in the quarter. Revenue per ASK down by 18%, more than offsetting a 14% reduction in cost per ASK (to an industry leading USD 3.26 cents). Costs per ASK excluding fuel remained stable at USD 1.87 cents. See article: AirAsia profits in 2009, but times are getting tougher

Tiger Airways profitable in Dec-2009 quarter

Shares in newly-listed Tiger Airways were also weaker yesterday, down 2.0%, despite reporting a recovery in profit in the three months ended 31-Dec-2009, due to surging passenger numbers (+54% to 1.3 million) and stronger load factors (+4.6 ppts to 87.6%).

The carrier reported an operating profit of USD17 million and a net profit of USD10 million, representing a turnaround from losses of USD3.6 million and USD5.5 million in the previous corresponding period, as revenues soared 30% (to USD99 million, of which ancillaries represented 18%) and operating costs increased by only 3%.

However, the carrier's average passenger fare was down 19% to USD62.6, although revenue per ASK increased 5.5%. Cost per ASK was down both including and excluding fuel costs, down 16.3% and 4.3%, respectively (to USD 4.19 cents and USD 2.68 - or some 29% and 43% higher than AirAsia's unit cost results, respectively).

Air China and Cathay sign cargo airline JV

In North Asia, shares in Cathay Pacific gained 0.3% yesterday, while Air China's shares were down 1.3%, as the carrier's signed a Framework Agreement to establish a jointly-owned cargo airline. See article: Air China and Cathay Pacific set up Shanghai cargo JV. Chipping away the Hong Kong hub

Asia Pacific selected airlines daily share price movements (% change): 25-Feb-2010

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