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Air New Zealand reports NZD136 million 1HFY2013 profit, up 300%. A generally favourable outlook

Analysis

The fruits of several years of investment in new aircraft and product are finally bearing fruit for Air New Zealand, with the carrier reporting a NZD139 million (USD115.6 million) underlying first half profit for FY2013, up 300% on a year earlier. Statutory profit after tax of NZD100 million (USD83.1) was also up NZD62 million (USD51.5 million).

The key driver of the result, the highest in five years, is a NZD72 million (USD59.9 million) improvement in passenger revenue on a 3.2% increase in demand and a 2.7% increase in capacity.

The restructured long-haul network provided the biggest improvements, having returned to profitability for the first time since the global financial crisis and seeing significant growth in demand and yield.

Air NZ's new CEO, Christopher Luxon, who took over from Rob Fyfe on 01-Jan-2013 has declared the airline is now in a "growth phase" and will take delivery of two additional 777-300ER from Jul-2014, replacing the last two 747-400s. The carrier is now focused on sustainable growth in the Pacific Rim region and a number of initiatives will be rolled out over the next few months.

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