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Air NZ Profit Slashed, Tip Analysts  
User currently offlineAnzett From , joined Dec 1969, posts, RR:
Posted (15 years 3 months 2 weeks 14 hours ago) and read 1448 times:

Air NZ profit slashed, tip analysts

Air New Zealand is expected to report an 85 per cent drop in first-half profit because of losses at its Australian unit Ansett
Holdings and as the low dollar and high jet fuel prices boost costs.

The Auckland-based carrier is expected to report that profit before
one-time items in the six months ended December 31 fell to $NZ12.5 million ($10.1 million), according to the median in a Bloomberg News survey of six analysts. That is down from $NZ83.4 million in the same period a year earlier. Forecasts ranged from $NZ3.5 million to $NZ28.6 million.

Competition from new Australian entrants Virgin Blue and Impulse Airlines on domestic routes, and higher fuel costs have hurt earnings
at Ansett, Australia's No2 carrier. As well, the decline in the NZ
dollar and higher oil prices added to costs at the New Zealand airline.

"People are expecting the worst," said Mr Andrew South, who manages $NZ250 million in New Zealand shares at BT Financial Group in Auckland. "Ansett isn't travelling very well" and higher fuel costs are also hurting the Air NZ operations.

Air NZ, 25 per cent owned by Singapore Airlines, is expected to
report tomorrow before the opening of trading on the New Zealand
Stock Exchange. At its annual meeting in November, chairman Sir Selwyn Cushing warned first-half profit before one-time gains would drop by at least 50 per cent because of higher fuel costs, the lower dollar and rising competition.

Air NZ bought the remaining 50 per cent of Ansett last June.

Ansett had been hurt by price competition from the new entrants, a
fall in demand during the Olympics and a loss of business customers to Qantas, Australia's No 1 airline, analysts said. Some are foreasting Ansett lost money in the first half.

"During the Olympics, corporate Australia didn't do anything," Mr
Bruce McKay, head of research at DF Mainland & Co in Auckland. "As well, they were forced to raise prices because of fuel costs and Qantas didn't" which, he said, also dented sales.

Analysts and investors will be looking to new chief executive Mr Gary Toomey, who started at the airline in December from rival Qantas, for progress on restructuring Ansett and the outlook for the group. In November the company said merging Ansett's operations was behind schedule. It has said it expected the merger would add $NZ350 million to earnings before interest and tax in three years.

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