Air New Zealand announces bumper annual profit

Air New Zealand posted a 45 percent rise in annual net profit on Wednesday (Aug 27), and predicted more strong growth in the current financial year amid rising demand and easing fuel prices.

The airline said net profit for the 12 months to June 30 was NZ$262 million (S$272 million, US$218 million), up from NZ$181 million (S$188 million) a year earlier.

In an often volatile industry, chairman Tony Carter said Air New Zealand had achieved its third consecutive year of growth, demonstrating that the carrier "continues to be a world-leading airline, both in terms of customer experience and financial performance".

"Based on our current expectations of market demand and fuel prices, we expect to improve on the 2014 result in the coming year," he said.

Underlying the airline's confidence, it placed a US$1.5 billion (S$1.8 billion) order for 14 medium-range Airbus planes in June. Carter said the arrival of new aircraft would significantly boost Air New Zealand's capacity.

The airline's operating revenue rose one percent to NZ$4.7 billion (S$4.89 billion), earnings before tax were up 30 percent at NZ$332 million (S$345 million), and the board declared a final dividend of 5.5 cents a share, as well as a special dividend of 10 cents a share.

The announcement was made before trading started on the New Zealand stock exchange, where Air New Zealand shares last traded at NZ$2.15 (S$2.23).

SOURCE

Air New Zealand orders 14 Airbus planes for US$1.5b

Air New Zealand said on Sunday that it has ordered 14 medium-range Airbus planes, valued at $1.5 billion according to list price.

The order by New Zealand's flag carrier includes three A321neo, 10 A320neo and one A320, said the airline's chief Christopher Luxon at a conference in the Qatari capital.

The neo units will be delivered between 2017 and 2019, while the classic A320 will be supplied early next year, he said on the sidelines of the general assembly of the International Air Transport Association.

The single-aisle aircraft are more fuel efficient than earlier models.

Luxon said that the carrier plans to have a fleet of medium-range airliners consisting exclusively of Airbus planes. Airbus's A320 family competes with Boeing's 737.

In November 2009, Air New Zealand placed an order for 14 A320 jets to replace its Boeing 737-300 planes.

SOURCE

SIA-Air New Zealand proposed alliance gets CCS nod

The Competition Commission of Singapore (CCS) has given the green light for the proposed strategic alliance between Singapore Airlines (SIA) and Air New Zealand to go ahead.

In a statement on Thursday, CCS said it finds that the proposed strategic alliance could raise competition concerns, but these would be offset by net economic benefits to Singapore.

Its decision followed a review of the submissions provided by the parties concerned and various stakeholders, including the Civil Aviation Authority of Singapore and Changi Airport Group.

Under the proposed tie-up announced in January, the two carriers plan to increase services between Singapore and New Zealand to tap the growing tourism traffic in the Asia Pacific and the Southwest Pacific markets.

It will allow Air New Zealand passengers to access codeshare travel on the SIA network to Europe, Africa and other parts of Southeast Asia.

In return, SIA customers can travel across Air New Zealand's domestic network and other Pacific destinations.

In response to Thursday's decision by the CCS, SIA said it is pleased that CCS has cleared the proposed alliance.

The strategic alliance remains subject to approval from New Zealand’s Minister of Transport.

SOURCE

Air New Zealand posts record interim profit

Air New Zealand posted a record first-half net profit Thursday and predicted its full-year result will also scale new highs as the world economy picks up.

The flag carrier said net profit for the six months to December 31 was NZ$140 million ($116 million), up 40 per cent on the same period a year earlier.

Chief executive Christopher Luxon said the airline was reaping the benefits of cost cutting in recent years, including shedding about 700 jobs, which had increased its flexibility when dealing with a changing global environment.

"The journey ahead is shaping up as incredibly exciting, particularly given the positive economic outlook in many of our key revenue markets," he said.

"We are well placed to take advantage of this."

Normalised earnings before tax were up 29 per cent at NZ$180 million over the six-month period, and Air New Zealand said they were expected to hit a new record of NZ$300 million-plus for the full year.

Revenue slipped two percent to NZ$2.33 billion, with the company announcing an interim dividend of 4.5 cents a share, up 50 per cent on the same period a year earlier.

Air New Zealand shares were up 1.71 per cent in early trading on the New Zealand stock exchange, where the overall market was down 0.15 per cent.

SOURCE

CCS seeking feedback on planned SIA-Air New Zealand tie-up

The Competition Commission of Singapore (CCS) is seeking public feedback on a proposed strategic alliance between Singapore Airlines (SIA) and Air New Zealand as the agreement could restrict competition on air travel between the two countries.

In a media release, CCS said it received a notification on 30 January about the proposed strategic alliance between SIA and Air New Zealand.

Earlier in January this year, both airlines announced plans for a tie-up which will enable SIA to operate its Airbus A380 superjumbos to New Zealand for the first time, progressively replacing daily services using the smaller Boeing 777-300ER.

Air New Zealand will launch daily services between Auckland and Singapore. SIA's daily Singapore-Christchurch service will continue as part of the alliance.

Besides SIA and Air New Zealand, other airlines that connect Singapore and New Zealand include Qantas's budget unit Jetstar and Malaysia Airlines.

SOURCE

Singapore Airlines, Air New Zealand announce tie-up

Singapore Airlines (SIA) and Air New Zealand on Thursday announced an alliance to expand services to both countries and boost their global reach as they look to capitalise on growing tourism traffic.

The alliance will enable SIA to operate its Airbus A380 superjumbos to New Zealand for the first time, progressively replacing daily services using the smaller Boeing 777-300ER, the firms said in a joint statement.

Air New Zealand will launch daily services between Auckland and Singapore using newly refitted Boeing 777-200ER aircraft, the statement said, replacing five flights currently operated by SIA.

Air New Zealand last operated flights to Singapore in 2006.

Singapore's affluent population has become a key target for global tourist destinations.

"Singapore's luxury travel market appears to offer a huge opportunity for New Zealand, with local demand for high-end travel matching the Asian-wide upswing," Tourism New Zealand said on its website.

The two carriers are aiming to boost their capacity between Singapore and New Zealand by up to 30 per cent.

SIA's daily Singapore-Christchurch service will continue as part of the alliance.

The deal will also expand Air New Zealand's connectivity to the rest of the world through SIA's extensive network.

Air New Zealand passengers will be able to access codeshare travel on the SIA network to Europe, Southeast Asia and Africa, as well as on the network of SIA's regional subsidiary, SilkAir.

SIA customers will in turn enjoy codeshare travel across the Air New Zealand domestic network and to the Pacific islands.

"This alliance is another example of our commitment to the important Southwest Pacific market, and our commitment to the further enhancement of our network," said SIA chief executive Goh Choon Phong.

Air New Zealand chief executive Christopher Luxon said the tie-up "clearly fits our business objectives of working with the right partners in the right markets to deliver seamless customer journeys".

He told reporters the partnership with SIA is the "cornerstone" of Air New Zealand's business strategy because of its international scope.

Air New Zealand's alliance with Cathay Pacific is limited to serving Hong Kong and southern China and its partnership with ANA is restricted to the Japanese market, Luxon noted.

The two carriers are seeking approval for the deal from the Competition Commission of Singapore and the New Zealand Minister of Transport, and said flights under the new alliance could start as early as December this year.

SOURCE

Qantas blasts "predatory" rivals

Qantas chief executive Alan Joyce has demanded the government halt what he described as a "virtual takeover" of Virgin Australia by foreign airlines, saying they were working to destabilise the national carrier.

Singapore Airlines, Air New Zealand and Abu Dhabi-based Etihad already own 63 percent of Qantas' main domestic rival and under a A$350 million (US$328 million) capital raising proposal announced last week, that could increase to as much as 72 percent.

In a searing letter to Prime Minister Tony Abbott and all state governments, seen by the Australian Financial Review, Joyce charged it was the "final act" by "predatory" state-owned airlines to cripple Qantas both domestically and internationally.

Joyce's ultimate fear is that the capital raising, "supported and largely underwritten by three foreign governments'', was part of a strategy of subsidising Virgin so it could continue to undercut Qantas on profitable domestic routes.

The domestic sector is a key money spinner for the airline and it has helped prop up its underperforming international network.

In his letter, Joyce said the move by the three airlines had "all the characteristics of predator behaviour (to) substantially weaken a major competitor, Qantas Group, and recoup the costs at a later date", the newspaper reported.

Qantas confirmed in a statement on Monday that a letter had been sent "to express concerns, as the national carrier, about potentially damaging shifts in Australia's aviation industry".

"Virgin Australia's proposed capital raising could see its foreign ownership rise to more than 80 percent without the need for any further regulatory approval," the statement said.

"Despite this, the airline would retain all the traffic rights given to Australian carriers.

"If wholly privatised, Virgin Australia's ability to receive potentially unlimited capital from its government-backed owners would seriously distort the domestic aviation market for the benefit of foreign interests.

"The decision of these shareholders to invest in Virgin Australia's loss-making strategy highlights that these airlines aren't subject to the same commercial realities as Qantas."

It demanded Canberra "fully examine the motives behind the virtual takeover of Virgin Australia by foreign airlines, and to prevent destabilising of the domestic aviation industry, local tourism and jobs".

Qantas said the situation was compounded by the disadvantage it experienced from the restrictions imposed by the Qantas Sale Act when it was privatised in 1995, which limits foreign ownership in the national carrier to 49 percent.

Joyce said the government should urgently revisit the "outdated policy framework".

SOURCE

Government confirms partial Air New Zealand sale

The New Zealand government confirmed Sunday the partial sell-off of national flag carrier Air New Zealand to local and offshore institutions.

It did not say how much it expected to raise from the long-expected sale but market analysts have previously forecast about NZ$400 million (US$330 million).

The government will reduce its holding from 73 percent to 53 percent in the sale which will commence on Monday, Finance Minister Bill English said.

"We expect the transaction to be completed by Tuesday evening," added English, without saying who might buy the shares.

Craigs Investment Partners, Deutsche Bank and Goldman Sachs have been appointed to undertake the transaction and work with New Zealand stockbrokers.

Air New Zealand, which is listed on both the New Zealand and Australian stock exchanges (NZX and ASX), has been trading in recent weeks around a five-year high and closed in New Zealand on Friday at NZ$1.65.

The airline said it would request a trading halt on the two exchanges while the sale process was carried out.

"Shareholding sell-downs of this type are typically conducted off-market when the company's shares are not trading on a stock exchange, to ensure the company's share price is not affected by speculative trading," English said.

"We expect Air New Zealand's shares to resume trading on the NZX and ASX on Wednesday."

The sale is being carried out just days ahead of a national referendum on the sale of government assets which has so far seen the disposal of 49 percent of electricity generating companies Mighty River Power and Meridian Energy.

State-Owned Enterprises Minister Tony Ryall said the first two share offers had raised NZ$3.6 billion.

"The proceeds of the programme have been allocated to the Future Investment Fund so the money can be reinvested in new assets and new infrastructure without the need to borrow money from overseas lenders," he said.

Air New Zealand issued a statement saying it considered the sale "a matter solely for the government" and would not comment further.

SOURCE

Air New Zealand boosts stake in Virgin Australia

Air New Zealand said Thursday it had boosted its stake in Virgin Australia to 23 per cent and was considering buying more, but denied any plans to seize control of the discount carrier.

The airline said it had purchased an additional three per cent and informed Australian regulators it wanted to buy another three per cent, which would take its total stake to 26 per cent.

"The additional interest affirms Air New Zealand's strong belief and confidence in Virgin Australia and the strategy it is pursuing under the leadership of (Virgin chief) John Borghetti and his team," it said in a statement.

"Air New Zealand is not seeking a position on the board of Virgin Australia nor does it have the intention of obtaining control of Virgin Australia."

The Auckland-based flag carrier has a long-standing alliance with Virgin Australia to cooperate on trans-Tasman routes, where Australia's Qantas is their main rival.

It said Australia's competition watchdog had told it that public hearings would be held into the airline's plans to increase its Virgin Australia shareholding.

Virgin Group chief Richard Branson last month said he would be open to the possibility of selling his remaining stake in Virgin Australia.

Branson's group, which founded Virgin Australia as a rival to Qantas in 2000, holds about 12.5 per cent of the airline.

Abu Dhabi-based Etihad Airways and Singapore Airlines also have major stakes in the carrier, which is now Australia's second-largest airline.

SOURCE

Hmm, it seems that everyone wants a piece of the airline other than the owner Richard Branson himself. Is he growing jaded of the aviation industry? Monetary returns compared to investment amount doesn't tally? Only he himself knows why he's "giving up" on the airline.