Air New Zealand enters its 75th year after posting largest profits and establishing growth platform

Air New Zealand is entering FY2015 on a high note. It starts the year having delivered what management expects will be an annual profit in the year to 30-Jun-2014 in excess of NZD300 million (USD262 million), the largest profit for Air NZ in a decade. Although not large in global terms, it should be seen in perspective; Air NZ is a small airline. But despite all the difficulties faced by a small airline at the end of the line, small can be beautiful: the projected profit represents a return on equity in excess of 15% - up from the 11% return anticipated by the market was expecting at the start of CY2014.

Although predictions can be dangerous in a turbulent industry, Air NZ is poised for earnings growth as it moves from five fleet types to two, implements capacity growth and makes a number of other improvements. Since the FAA and EASA certified the 787-9 on 16-Jun-2014, Air NZ can now prepare to receive its first of type (for which it is the launch customer) and plan network improvements with the much-awaited aircraft. It is an early birthday gift as Air NZ will mark its 75th anniversary in FY2015.