Air New Zealand has finally returned to profitability due to a pick-up in demand but expects the situation to normalize in the upcoming financial year.
According to the airline’s FY2023 release, “demand for air travel that exceeded expectations has led to a rapid recovery for Air New Zealand, which today announced a profit that will help fund aircraft, digital investments and facilities, building a stronger airline for New Zealand”.
During the fiscal year, ending June 30, 2023, the airline earned NZD6.3 billion ($3.7 billion), which resulted in Air New Zealand earning a profit of NZD412 million ($244.7 million). As such, the airline will pay out a special dividend of NZD0.6 ($0.36) per share to its shareholders, reflecting “the extraordinary 2023 operating environment, with strong pent-up levels of demand combined with industry-wide capacity constraints”.
According to Greg Foran, the chief executive officer (CEO) of Air New Zealand, the airline’s recovery meant that it restored its flying levels to 500 operations daily, allowing Kiwis “to take that long planned holiday” and bring back tourist dollars to the regions, while also supporting exporters relying on air cargo.
“We know increased costs and high demand have made flying more expensive. In the past year we put more aircraft and seats in the air, so there are more choices for customers which helps alleviate the cost of flying,” Foran noted.
The CEO also said that the airline’s costs have continued to rise, leading to a reality where “airfares are unlikely to return to pre-pandemic levels”.
Looking forward, the airline said that while 2023 was “unique”, it believes FY2024 “will be more reflective of future financial performance”.
“We are mindful of the uncertain economic environment however and acknowledge a number of factors that may impact future customer demand and profitability,” Air New Zealand said in its guidance, adding that the volatility and negative macroeconomic factors prevented the airline from providing a full-year guidance for FY2024.
