Company Watch - Air New Zealand.

For more company news, data and analysis, please go to: http://www.airguideonline.com/professional.htm Sep 4, 2006

Air New Zealand's profit drops 47% in 'challenging environment'. Air New Zealand described its full-year result as "solid" in a "challenging environment," with a net profit decline of 48% to NZ$97 million ($61.7 million) for the year ended June 30 from NZ$180 million in the prior year. As with all carriers, ANZ's bottom line has been jolted by fuel costs, in this case a hike of 44% or NZ$275 million. But it also incurred costs related to the refurbishment of its 747s and introduction of the 777-200ER and Q300. It completed a total makeover of its inflight product and restructured management and maintenance, but CEO Rob Fyfe warned there is more pain to come. Aug 28, 2006

Air New Zealand revenue was up 5% NZ$3.8 billion with a solid 6% yield improvement to NZ$0.12 per RPK. Higher fuel prices led to total expenses, excluding borrowing costs, increasing 7% to NZ$3.7 billion. ANZ carried 11.9 million passengers, up 2% on the previous year, while ASKs grew 1% to 34.05 billion and RPKs remained static at 25.55 billion, resulting in a 1-point decline in load factor to 75%. The company's financial position remains strong, with net cash of NZ$1.15 billion and net debt at NZ$203 million. The board elected to repay NZ$245 million of debt, initially scheduled for repayment over the next three years, early in the 2007 financial year. Looking ahead, Air New Zealand said that "challenging times remain," in part because of a "softening" national economy and a weakening currency against the US dollar, which is good for long-haul revenue but problematic for leasing, fuel and MRO costs. "The airline won't escape the impact of high fuel prices, and these will heavily influence the level of Air New Zealand's profitability in the 2007 financial year," it said. Aug 28, 2006