Air New Zealand Ltd on Thursday struck an optimistic tone over travel demand for the remaining fiscal 2023 while noting significant uncertainty over inflationary pressures and overall domestic and international economic outlook.
The national carrier swung to a first-half profit for the first time in three years, helped by strong travel demand following the reopening of domestic and international borders, and strong cargo revenues which were above pre-COVID levels.
“Our recovery is well underway and operating performance is improving steadily, but like most airlines globally, we continue to experience challenges,” Chief Executive Officer Greg Foran said.
Central banks worldwide have been hiking their respective monetary policy rates in a bid to temper soaring inflationary pressures, which have also led to fears of a global recession.
On the positive side, travel demand has staged a strong return following the removal of COVID-related curbs in the antipodean countries and regional markets, prompting the airline to gradually increase capacity and fast-track financial recovery.
The company reported statutory profit before tax of NZ$299 million ($185.95 million) for the six months ended Dec. 31, compared with a loss of NZ$376 million reported a year earlier.
It recently faced headwinds on account of heavy impacts from Cyclone Gabrielle, which led it to cancel a total of 821 flights. The carrier resumed all operations last week.
The company further added that it expects earnings before other significant items and taxation between NZ$450 and NZ$530 million for 2023, which includes a preliminary estimate of the impact of the Auckland floods and Cyclone Gabrielle.
It posted a loss before other significant items and taxation of NZ$725 million in 2022.
Air New Zealand did not declare a dividend but said that it will consider providing dividends for its shareholders during its full-year results in August.
($1 = 1.6080 New Zealand dollars)