NZ560
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Joined: Wed May 17, 2006 3:46 pm

Air New Zealand Boosts Profit

Tue Feb 27, 2007 10:37 am

Source

Quote:
Air New Zealand has today announced a profit before unusuals and tax of $109 million for the six month period ending 31 December 2006, an increase of 35% ($28m) on the poor performance in the same period last year.

Net profit was $74 million, up 61% ($28m), and higher yields contributed to a 12% increase in operating revenue. Based on the airline's improved profitability and outlook, the Board has increased the interim dividend to 3 cents per share, or $32 million.

Air New Zealand Chairman John Palmer said the airline's progress in the first six months of the year was pleasing in the face of significant challenges like high fuel prices, a weaker New Zealand dollar and intense competition from other destinations.

"All our key metrics - including yield, passenger numbers, revenue, profitability and share price are up, despite significant external pressures," Mr Palmer said.

Key highlights:

* Operating revenue rose 12% to $2,135 million with group passenger yields up 10.7%.
* Short-haul passenger revenue has increased 11% to $1,019 million with yields also up 8.9%.
* Long-haul passenger revenue increased 13% to $695 million, with yields up 12.7%.
* Cargo revenue up 20% due to the increased capacity offered by the new 777 and higher cargo yields.
* Additional cost savings of $63 million achieved, on track to achieve targeted cost savings of $130 million.
* Gearing as at 31 December 2006 is 46.7% at the lower end of our target range of 45 to 55%.
* Cash holdings remain above $1 billion despite repaying $140 million of debt early.
-OJL RIP Also to the 7 onboard
 
CupraIbiza
Posts: 547
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RE: Air New Zealand Boosts Profit

Tue Feb 27, 2007 10:51 am

Can one read into this result that the need to merge/tie up with Qantas wasnt really neccessary?
Everyday is a gift…… but why does it have to be a pair of socks?
 
Motorhussy
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RE: Air New Zealand Boosts Profit

Tue Feb 27, 2007 11:25 am

Quoting CupraIbiza (Reply 1):
Can one read into this result that the need to merge/tie up with Qantas wasnt really neccessary?

And also read into it the EPMU's disbelief at NZ's "essential" outsourcing or sale of ground services.
come visit the south pacific
 
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Zkpilot
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RE: Air New Zealand Boosts Profit

Tue Feb 27, 2007 11:51 am

Quoting CupraIbiza (Reply 1):
Can one read into this result that the need to merge/tie up with Qantas wasnt really neccessary?

yes and no...
The QF arrangement was a longterm thing... aviation is going thru boom times at the moment so all is fine... as it is cyclical, the bad times will most likely return in about 5 years or so. How individual airlines cope in the bad times is the measure of how strong they are. NZ should be fine then except if they face massive competition from the likes of QF, EK etc. I think it is good that NZ have their own path to follow however.
Interesting to note that QF now hold a shareholding in NZ of just under 5%. Now that NZ is increasing its dividends it means that QF are getting paid out a bit more than they would have previously! Coincidence, good luck, or collusion?  Wink
56 types. 38 countries. 24 airlines.
 
RupesNZ
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RE: Air New Zealand Boosts Profit

Tue Feb 27, 2007 5:03 pm

"And also read into it the EPMU's disbelief at NZ's "essential" outsourcing or sale of ground services."

If you listened to National Radio this evening you'll have heard Rob Fyfe saying that outsourcing was not the intended result, it's that 45% of NZ's baggage/ground handling is for other airlines who are saying that the price NZ charges is higher than other providers so they need to find a way to reduce costs in that area, otherwise the other customers will take their business elsewhere.

So the ground staff need to realise that NZ would rather they keep their jobs, but can't do so if they start losing customers.

One gets the feeling, as is usual when the unions are involved is that they are casting about too much FUD and not enough fact.
 
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Zkpilot
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RE: Air New Zealand Boosts Profit

Tue Feb 27, 2007 6:03 pm

Quoting RupesNZ (Reply 4):
"And also read into it the EPMU's disbelief at NZ's "essential" outsourcing or sale of ground services."

If you listened to National Radio this evening you'll have heard Rob Fyfe saying that outsourcing was not the intended result, it's that 45% of NZ's baggage/ground handling is for other airlines who are saying that the price NZ charges is higher than other providers so they need to find a way to reduce costs in that area, otherwise the other customers will take their business elsewhere.

So the ground staff need to realise that NZ would rather they keep their jobs, but can't do so if they start losing customers.

One gets the feeling, as is usual when the unions are involved is that they are casting about too much FUD and not enough fact.

Often that is the case with unions in many industries, but it is definantly not the case in this situation...
NZ has basically said they either need to take a 25% pay cut AND lose their penal rates (in other words up to 50% paycut) for the same amount of work. The thing is its not a high paying job to start with! If they were serious about the issue, they would introduce more technology like self-checkin etc which would result in productivity gains and thus save NZ money.
56 types. 38 countries. 24 airlines.
 
aerokiwi
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Joined: Sun Jul 30, 2000 1:17 pm

RE: Air New Zealand Boosts Profit

Tue Feb 27, 2007 7:42 pm

Interesting to note the role of cost-cuts ($63 million) in the total profit. How does that square with the revenue/yield increase?
 
ZKNZA
Posts: 46
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RE: Air New Zealand Boosts Profit

Wed Feb 28, 2007 1:37 am

Quoting RupesNZ (Reply 4):
One gets the feeling, as is usual when the unions are involved is that they are casting about too much FUD and not enough fact.

One gets the feeling that you woudn't have a clue what your on about, to make a blanket statement like that.
Yes sometimes unions are more of a hindrence than a help and when two or more get involved its usually a hindrence.
However you only have to look at engineering, to see what happens when management and unions dont work together, until the last minute.An organisation that is understaffed, cant get anyone to work their because the pay rates and conditions are below the industry norm and an organisation that has absolutly no staff morale.Widebody heavy maint was saved, but at what cost?I know how many staff that the board was told wanted redundancy and let me tell you that the number that actually took it was 6 x what the company thought.Hmm if that didn't tell the board, what they were doing was going to be a disaster ,nothing could.
 
airnewzealand
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RE: Air New Zealand Boosts Profit

Wed Feb 28, 2007 7:34 am

Quoting RupesNZ (Reply 4):
One gets the feeling, as is usual when the unions are involved is that they are casting about too much FUD and not enough fact.

If you worked in the industry, you'd be eating your words. If it wasn't for these unions, we wouldn't have the conditions we have today! And this benefits ALL people, including staff, passengers and even the NZ economy gain from them!!!

As people on this forum mentioned, the pay scales AirNZ are talking about are outright ridiculous!! The rate that the staff are on now is still under payed by international standards!!

Have you seen the treatment and skill the Menzies staff have?? Do you see how many new faces go through this place every month? And you want to know why there is a high turn over of staff??? Because people cannot afford to survive on what the get paid. Hell, my fiance gets paid more than me per week, and she works in retail!!

These unions must continue to fight for us...and for the future of all employees not only in that division, but ALL divisions within the company!

These people did what they had to do to keep the company afloat...ie pay freezes, re-negotiations of overtime etc etc etc... so its about time the company gave them something in return. Not lies, deceit and out right ignorance for their lives and families!!!

Cheers
 
flyjetstar
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Joined: Fri Feb 03, 2006 6:37 am

RE: Air New Zealand Boosts Profit

Wed Feb 28, 2007 8:01 am

Quoting Airnewzealand (Reply 8):
These people did what they had to do to keep the company afloat...ie pay freezes, re-negotiations of overtime etc etc etc... so its about time the company gave them something in return. Not lies, deceit and out right ignorance for their lives and families!!!

I'm not in the industry so I am more asking questions than stating facts but my first thought is that it takes an awesome individual to be able to look at something objectively. If my job was on the line I know I would find it hard to step back and remove emotion while I was considering what my employer wanted to do.

Is it just a case that what has happened in other areas of the airline industry elsewhere in the world are catching up with us here in New Zealand. Previously cabin crew, for example, was a glamorous job and everyone wanted to do it and I think it was reasonably well paid. Then the LCC comes along and finds people who will do the same job for a lot less money and benefits. That the begins to affect everyone, not just LCC but mainline carriers too whether they like it or not. Everyone now has to lower their cost base in order to compete.

So is now the same thing happening to ground staff? There are other people who will do it for a whole lot less and companies, I guess like Menzies, are now offering better deals for other airlines and NZ has to keep up. Granted cutting staff allowances etc aren't the only way of cutting costs and other efficiencies like self check-in might help but if staff is your greatest cost then those new efficiencies alone wont go far enough in order to make required savings.

[Edited 2007-02-28 00:07:24]
 
TG992
Posts: 2310
Joined: Tue Jan 09, 2001 12:03 pm

RE: Air New Zealand Boosts Profit

Wed Feb 28, 2007 9:01 am

I have a real (perhaps irrational) fear that the constant driving down of conditions in what could be considered entry level jobs (for example, callcentre, baggage loading, retail, food and beverage) will create a new underclass in developed countries. People will be forced more and more to compete against each other for jobs, with the 'lowest bidder' taking it.

Dad and Mum who had kids early and never went to university will be forced to work two jobs each and longer hours just to make ends meet. The kids will receive even less parental time than they do now, and that can't be a good thing.
-
 
planetime
Posts: 612
Joined: Wed Mar 15, 2006 3:16 pm

RE: Air New Zealand Boosts Profit

Wed Feb 28, 2007 9:59 am

Good news for NZ. Now Fyfe can cut the profit making routes and put in his emotionally motivated routes.
 
flyjetstar
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Joined: Fri Feb 03, 2006 6:37 am

RE: Air New Zealand Boosts Profit

Wed Feb 28, 2007 11:48 am

Quoting Planetime (Reply 11):
Good news for NZ. Now Fyfe can cut the profit making routes and put in his emotionally motivated routes.

What kind of remark is that? It's easy to be an armchair CEO. Cut the guy some slack. You might not like his decisions but being spiteful isn't that cool. It's easy to be smart on an anonymous internet forum.
 
TG992
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RE: Air New Zealand Boosts Profit

Wed Feb 28, 2007 11:50 am

Quoting Planetime (Reply 11):
Good news for NZ. Now Fyfe can cut the profit making routes and put in his emotionally motivated routes.

Hi Planetime - would you care to quote the profit making routes Mr. Fyfe has cut?
-
 
ZKNZA
Posts: 46
Joined: Tue Feb 20, 2007 1:10 am

RE: Air New Zealand Boosts Profit

Wed Feb 28, 2007 12:20 pm

Quoting Flyjetstar (Reply 9):
I'm not in the industry so I am more asking questions than stating facts but my first thought is that it takes an awesome individual to be able to look at something objectively. If my job was on the line I know I would find it hard to step back and remove emotion while I was considering what my employer wanted to do.

Thats exactly what we had to do to, look at the situation objectively and it still didn't make sense.The only way that the airline can move forward with these situations is, work with the unions,work with the staff and involve all partys from the onset, so that a constructive outcome can be achieved.
Although I will be the first to admit that engineering did need to change,it's the way it was carried out and the total disregard for how important the engineering operation is, now and into the future for Air NZ.
I think apart from that and whats going on with airport services, the senior management team are doing a very good job of running the airline and planning for the future,yields are up, load factors are up, customer satisfaction is up and profit is up.
 
planetime
Posts: 612
Joined: Wed Mar 15, 2006 3:16 pm

RE: Air New Zealand Boosts Profit

Wed Feb 28, 2007 7:58 pm

Quoting TG992 (Reply 13):

Hi Planetime - would you care to quote the profit making routes Mr. Fyfe has cut?

LAX-PPT. LAX-LHR downgrade to a 777....
 
TG992
Posts: 2310
Joined: Tue Jan 09, 2001 12:03 pm

RE: Air New Zealand Boosts Profit

Wed Feb 28, 2007 9:37 pm

What figures do you have for LAX-PPT please? How do you know LAX-LHR is profitable in the 777 season?
-
 
sunrisevalley
Posts: 5065
Joined: Tue Jul 06, 2004 3:26 am

RE: Air New Zealand Boosts Profit

Thu Mar 01, 2007 3:18 am

Quoting TG992 (Reply 16):
How do you know LAX-LHR is profitable in the 777 season?

We don't, but the improvements in load factors and yields would strongly suggest that it is. Certainly if it is not profitable utilizing the 777 then it was never profitable with the 747's.

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