26
Aug
Air New Zealand profits signal airline recovery
Air New Zealand has reported a fourfold increase in profits,
leading signs of recovery in the airline industry.
The flag carrier said net profits for the year to the end of
June totalled 82m New Zealand dollars ($58m; £37m), up from
NZ$21m in the previous year.
In a busy day for company reporting, airlines elsewhere in the
world also delivered positive news.
Both Air China and Australian budget carrier Virgin Blue also
reported a recovery in profits.
Air China, one of China's three major state-owned airlines, said
its profits in the first half of the year were up 60% on last year,
when the global economic downturn hit passenger numbers.
Virgin Blue also reported a return to profit in the last 12
months.
Net profits for the year were up to 21m Australian dollars
($19m; £12m), the carrier said, following the A$160m loss
recorded a year ago.
Passenger demand rises
But despite the improvement in profits, the airlines remain
cautious over the outlook for the industry.
"Conditions continue to be volatile [and] the soft growth seen at
the end of the fiscal year is not sufficient to suggest a
consistent across-the-board improvement in conditions," warned
Virgin Blue in a statement.
Air New Zealand's chairman also admitted that continued
uncertainty in the strength of the global economic recovery had
suppressed demand for air travel.
Much of its profits came from cost cutting, which saw operating
costs reduced by nearly NZ$600m over the year, and lower fuel
bills.
But Air New Zealand insisted that there were "signs of
recovery", with demand for air travel expected to continue to
gradually improve.
Earlier this week, figures from the International Air Transport
Association (Iata) suggested that growth in demand for air travel
was continuing to rise.
International passenger demand was 9.2% higher in July than a
year earlier, while international scheduled freight traffic was up
22.7%.
But Iata's director general Giovanni Bisignani warned that
continued growth would still depend on the strength of the recovery
in the wider economy.
"The recovery in demand has been faster than anticipated. But,
as we look towards the end of the year, the pace of the recovery
will likely slow [and] further growth will be largely determined by
consumer spending which remains weak," he said.
In Europe, Germany's second biggest airline Air Berlin is due to
give further details of its second quarter earnings later.
On Tuesday it said the disruption caused by the cloud of
volcanic ash that crossed Europe in May had pushed it into the red
between April and June.
Losses for the quarter totalled 57m euros ($72m; £47m) it
said.
Source: http://www.bbc.co.uk/news/business