Air New Zealand releases 2024 annual report

Air New Zealand releases 2024 annual report


The post Air New Zealand releases 2024 annual report appeared first on TD (Travel Daily Media) Travel Daily Media.

Air New Zealand released its annual report for the year ending 30 June 2024 with results reflecting the challenges of the past year.

The airline announced earnings before taxation for the 2024 financial year of $222 million compared to $574 million for the same period last year.

This was an expected reduction on the prior year, when the airline recorded one of its highest ever results following the reopening of New Zealand’s border. Net profit after taxation was $146 million.

While Air New Zealand reported a solid first half result, the second half of the financial year proved increasingly challenging as the impact of operational and economic headwinds became more pronounced.

Economic challenges

The tougher economic backdrop in New Zealand drove a deterioration in domestic demand in the second half, particularly for corporate and government segments.

Accelerated maintenance requirements for Pratt & Whitney PW1100 engines worldwide have meant that up to six of the airline’s newest and most efficient Airbus neo aircraft have been out of service at times. Ongoing additional maintenance requirements on the Trent 1000 engines that power the existing Boeing 787 Dreamliner fleet and reduced levels of spares in the market have meant that up to three Dreamliners are also on the ground at times. These issues, alongside elevated competition from US carriers and the cumulative effect of high inflation, have had a significant impact on the airline’s operational and financial performance for the 2024 financial year.

Passenger revenue increased 11 percent to $5.9 billion, driven by a 23 percent ramp-up in capacity, primarily across the international long-haul network. This was partially offset by the weaker demand environment and higher levels of competition. Also included within passenger revenue is $90 million of credit breakage for unused customer credits that were considered highly unlikely to be redeemed.

Operational costs

While average jet fuel prices were slightly lower for the year, total fuel costs increased by around $190 million, driven by capacity growth across the network. Non-fuel operating costs increased faster than revenue, also driven by the increase in capacity, as well as broad based inflation across the cost base.

Non-fuel operating cost inflation of approximately $225 million was a significant drag on the airline’s financial performance. With landing charges, air navigation fees and engineering materials leading the increases, the non-fuel operating cost uplift of six percent for the year brings the cumulative impact of inflation across the past five years to 20 to 25 percent. While growth in the network has provided some scale benefits, productivity remains below the levels achieved pre-Covid as the airline carries extra costs to help manage ongoing disruptions in the supply chain.

Based on the airline’s balance sheet strength and the result announced today, shareholders will receive a final unimputed ordinary dividend of 1.5 cents per share, taking the total ordinary dividends declared for the year to 3.5 cents per share. 

The dividend will be paid on 26 September, to shareholders on record as at 13 September.

The post Air New Zealand releases 2024 annual report appeared first on Travel Daily Media.



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