Category Archives: Air New Zealand

Air New Zealand announces earnings before taxation of $374 million

Air New Zealand has made this announcement:

Air New Zealand has announced earnings before taxation for the 2019 financial year of $374 million, compared to $540 million in the prior period. Net profit after taxation was $270 million and operating cash flow was $986 million.

The result was driven by operating revenue growth of 5.3 percent, which was offset by a $191 million increase in the price of fuel, as well as a temporary increase in operating costs as the airline sought to improve network resiliency for its customers in the face of the global Rolls-Royce engine issues.

Shareholders of Air New Zealand will receive a final dividend of 11.0 cents per share, taking the total ordinary dividends declared for the year to 22.0 cents per share, in-line with the prior year.  The dividend will be paid on 18 September, to shareholders on record as at 6 September.

Chairman Tony Carter said the result represents the relentless focus and hard work of more than 12,500 Air New Zealanders, who have risen to the challenges this financial year has presented.

“While we are disappointed that we did not meet the expectations we first set for ourselves at the start of the financial year, the fact is we are operating in a different demand environment than we were 12 months ago. To have achieved a solid result despite these headwinds speaks volumes about the extraordinary dedication and commitment of our people.

“When we first saw signs that demand was slowing, we took immediate steps to review our network, fleet and cost base, to position the airline for success in a lower growth environment. While we have made progress, this work is still ongoing.

“I am very confident in our strategy and our experienced, world-class executive team who are focused on driving our business back to earnings growth, while ensuring that we maintain the airline’s strong customer-centric culture.”

Chief Executive Officer Christopher Luxon noted that as the airline navigates a more challenging demand environment, delivering competitive fares and a superior customer experience remain a top priority.

“While the New Zealand market has seen foreign competitors reduce capacity or withdraw completely this year, we have continued to grow both domestically and internationally and to adjust our domestic fare structure to keep New Zealanders connected to each other and the world.

“In a society with rapidly changing customer expectations, we know we need to continue to lift our game. We invest a huge amount of time understanding what our customers value and how we can improve their experience, which is why we introduced free Wi-Fi onboard our long-haul flights earlier this year and announced changes to our Economy product offering. We can’t wait to share some further exciting product developments and enhancements in the coming months, which we think our customers are going to love.”

Mr Luxon went on to say that as the airline looks to the coming year, it is in a fundamentally strong position and will target further growth that taps into new pools of demand.

“We were very excited earlier in the year to announce that we would begin flying to Seoul in November 2019. A new seasonal service from Christchurch to Singapore will begin in December 2019, which will provide greater choice for visitors and locals alike.  We will also launch additional frequency into both Chicago and Taipei, as these routes continue to outperform our expectations.

“Another important milestone will be the return of our remaining Rolls-Royce engines back into service, which we are expecting to happen in the coming months. This will enable us to bring further reliability back to our flying schedule and to utilise our most efficient aircraft in the optimum way.”

Mr Luxon acknowledged that while the outcomes of the business review announced in March will provide some clear benefits to the airline in the coming year, there were still further cost efficiencies that needed to be realised following the conclusion of operational and overhead cost reviews.

“We are focused on ensuring that Air New Zealand is fit for the new lower growth environment and part of that involves identifying ways that we can deliver meaningful, sustainable reductions in our cost base. We know we already run a tight ship and that any further cost savings will require exponential effort.

“That is why we have selected a respected external consultancy to assist with this process. They can provide us with an outside perspective and are able to benchmark us to provide a clear understanding of how our processes compare with global peers.”

Mr Luxon also stated that the airline remains committed to delivering on its sustainability strategy and initiatives.

“We know that sustainability is a critical global issue and we risk losing our social license to operate if we do not genuinely address climate change. That is why you will see us continue to invest, whether that be further reducing single use plastic items on board our aircraft or making it easier for our customers to voluntarily offset their emissions with our FlyNeutral tool.”

The airline will also take delivery of six ATR aircraft and three Airbus A320/321 NEO aircraft in the 2020 financial year, which will provide continued growth, fuel efficiency and cost benefits on the Tasman and Pacific Islands network. An additional Boeing 787-9 Dreamliner will also join the fleet this year. 

 

Air New Zealand’s investment grade credit rating and strong operating cash flow have enabled it to continue to invest in the most innovative, efficient and comfortable aircraft on the market to deliver on its commitment to grow sustainably. Earlier this year the airline announced that it would replace its fleet of Boeing 777-200 aircraft with the Boeing 787-10 Dreamliner, subject to shareholder approval in September.  These aircraft will start to be delivered from the 2023 financial year and will be a game changer for the airline, offering a 25 percent improvement in fuel efficiency.

Outlook

Based upon current market conditions and assuming an average jet fuel price of US$75 per barrel, the airline is targeting earnings before taxation to be in the range of $350 million to $450 million. This outlook excludes the impact of the new accounting standard for leases.

Financial Highlights

  • Operating revenue of $5.8 billion
  • Earnings before taxation of $374 million
  • Net profit after taxation of $270 million
  • Operating cash flow of $986 million
  • Fully imputed final dividend of 11.0 cents per share, resulting in annual ordinary dividends of 22.0 cents per share
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Air New Zealand launches Air All Blacks safety video

Air New Zealand has today launched a new safety video Air All Blacks in support of the team during its 2019 season and as they prepare for Japan in September. 

All Blacks Head Coach Steve Hansen along with Captain Kieran Read, Sam Cane, Anton Lienert-Brown and Ryan Crotty join a diverse cast in the safety video which takes viewers to the headquarters of “newly established airline” Air All Blacks where ideas for the airline’s first safety video are being discussed.     

After insisting on being the next Air New Zealand spokesperson after travelling with the airline in 2017, Suits actor Rick Hoffman also features in the video, as well as leading Kiwi actor Cliff Curtis.  

Hoffman says his positive experiences in New Zealand and Air New Zealand’s quirky humor were a huge drawcard for him to star in the video.  

“I love New Zealand – the food is amazing and the people are amazing. It’s the way it should be everywhere! I will be thrilled to be recognised on an Air New Zealand safety video. 

Building on the airline’s twenty-year partnership with New Zealand Rugby, the video also stars 1987 rugby legends Sir Michael Jones, Sir John Kirwan, Buck Shelford, Gary Whetton and David Kirk and former Black Ferns Captain Fiao’o Fa’amausili as well as former Australia Captain George Gregan.  

 

Air New Zealand General Manager Global Brand & Content Marketing Jodi Williams  

says the latest video is a futuristic take on two iconic Kiwi brands coming together to show the world just how much rugby is in our DNA. 
 
“Changing our name to Air All Blacks is a fun demonstration of our support for the boys in black. Our people feel a great sense of pride flying the team around the world and both organizations consistently show the world what a huge impact a small nation can make on the world stage.” 

 

The release of Air All Blacks marks the ten-year anniversary of the airline’s unique take on safety videos, and in true Air New Zealand style, the latest video manages to poke some Kiwi fun along the way.  
 
“It’s been incredible to celebrate both local and international stars, fans and our very own Air New Zealanders over the past ten years. It’s only fitting that this video brings to life something that is distinctly New Zealand – from the grassroots of Rippa Rugby to the nostalgia of the 1987 All Blacks, with a unique modern twist,” says Williams.  
 
Adding to the iconic Kiwi line-up, Air All Blacks is backed by the exclusive, original soundtrack Universe, a brand-new track from New Zealand band Six60. Listen to it on Spotify from Friday 9 August (NZT).  
 

Air New Zealand doubles down on plastic waste reduction

Air New Zealand has made this announcement:

To mark Plastic Free July the airline has removed individual plastic water bottles from its Business Premier and Premium Economy cabins, as well as from its Works Deluxe offering on Tasman and Pacific Island services under five hours in duration. This is expected to divert more than 460,000 bottles from landfill annually and reduce carbon emissions by more than 300,000 kilograms per year by reducing weight on the aircraft.

Individual plastic sauce packets are being removed from Business Premier cabins on mainland North America and Hong Kong services, and these will be eliminated entirely from the global network by the end of October. Customers will instead be served sauce in reusable dishes which is expected to prevent around 200,000 plastic packets going to landfill each year.

The airline is also set to roll out coffee cups made from plants rather than plastic across its domestic and international networks from October, while plastic water cups will be transitioned to recyclable alternatives from September. The previous commitment targeted coffee and water cups on Air New Zealand’s domestic network where the majority of cups are used, however, the scope has now expanded to introduce the lower impact cups across the international network, lifting the total number of cups being replaced this year from 14.7 million to 44.5 million.

Air New Zealand’s Acting Head of Sustainability Anna Palairet says the airline is focused on reducing the amount of single-use plastic products it purchases at source, as the lack of composting infrastructure in New Zealand at present poses a challenge.

“Single-use plastic is a highly topical and visible issue for us and our customers, so we’re really pleased to be able to share this progress to celebrate Plastic Free July. The lack of composting infrastructure available in New Zealand is a challenge so we have been focused on reducing the amount of single-use plastic products we purchase in the first place.

“It’s great to see more and more customers are bringing their reusable drink bottles and keep cups on board, and we encourage people to do this – our cabin crew team is happy to fill these.”

Air New Zealand confirms its order for eight Boeing 787-10 Dreamliners

Air New Zealand and Boeing have announced the airline plans to add the largest 787 Dreamliner model to its fleet with a commitment to buy eight 787-10 airplanes.

The first of these highly fuel-efficient aircraft will join the Air New Zealand fleet in 2022 and together they will have the potential to save 190,000 tons of carbon per year.

Air New Zealand’s widebody fleet currently consists of 13 Boeing 787-9s, eight Boeing 777-200s and seven Boeing 777-300 aircraft. A 14th Boeing 787-9 will enter the fleet later this year.

The first new aircraft is expected to join the Air New Zealand fleet in late 2022 with the remainder delivered at intervals through to 2027.

In addition to the eight firm orders announced today, the agreement includes options to increase the number of aircraft from eight to up to 20. The airline has also negotiated substitution rights that allow a switch from the larger 787-10 aircraft to smaller 787-9s, or a combination of the two models for future fleet and network flexibility. The delivery schedule can also be delayed or accelerated according to market demand.

These new long-haul aircraft will replace Air New Zealand’s fleet of eight 777-200 aircraft, which will be phased out by 2025. Combined with GE’s GEnx-1B engines, they are expected to be 25 percent more fuel efficient than the aircraft they’re replacing.

The 787-10 is the largest member of the super-efficient and passenger-pleasing Dreamliner family. At 224 feet long (68 meters), the 787-10 can serve up to 330 passengers in a standard two-class configuration, about 40 more than the 787-9 airplane. Powered by a suite of new technologies and a revolutionary design, the 787-10 set a new benchmark for fuel efficiency and operating economics when it entered commercial service last year.  The airplane allows operators to achieve 25 percent better fuel efficiency per seat compared to the previous airplanes.

Air New Zealand was a global launch customer for the 787-9 and today operates 13 of the Dreamliner variant. With another 787-9 on the way and the 787-10 airplanes in the future, the airline’s Dreamliner fleet will grow to 22. Air New Zealand’s widebody fleet also includes seven 777-300ERs and eight 777-200ERs, which it is progressively replacing with the aircraft order announced today.

Image: Air New Zealand.

Air Lease Corporation announces delivery of Airbus A320-200neo aircraft with Air New Zealand

Air Lease Corporation (ALC) has announced the delivery of one new Airbus A320-200neo aircraft on long-term lease to Air New Zealand.  Featuring Pratt & Whitney PW1127G engines, this aircraft is the first of two A320-200neos confirmed to deliver the airline in 2019 from ALC’s order book with Airbus.

“We are pleased to be the first to introduce the A320-200neo to Air New Zealand’s fleet and continue the long and excellent relationship that ALC has with the airline,” said Grant Levy, Executive Vice President of Air Lease Corporation. “The A320-200neo provides key enhancements to the airline’s operations as Air New Zealand continues to add the most technological advanced, fuel-efficient aircraft to modernize their expanding fleet and offer the highest quality passenger experience.”

Image: Air New Zealand.

Air New Zealand celebrates the year in the air

Air New Zealand Boeing 787-9 Dreamliner ZK-NZE (msn 34334) DPS (Pascal Simon). Image: 945013.

Air New Zealand has looked back at its operation in 2018:

Air New Zealand operated around 188,000 flights this year, with its customers collectively flying 29.85 billion kilometers since January 1, 2018.

Of its most frequent flyers, an Auckland based customer flew a whopping 639,000 kilometers in 2018 – the equivalent to 15 circuits of the earth – making them Air New Zealand’s farthest flyer for the year.

The airline’s most frequent flyer took 371 flights in 2018, and the top three travellers together clocked up 1.25 million kilometers in the air– earning more than 31,000 Airpoints Dollars between them.

Keeping customers fed, watered and caffeinated on the 17 million journeys the airline enables annually is an around-the-clock operation, and since 1 January 2018 –

  •  More than 6.3 million meals were served across the airline’s global network. Malay chicken with steamed rice was the most popular main dish in Economy class with 294,000 portions served.
  • Beef osso bucco with caramelised onions was the most popular of the 1.3 million New Zealand beef and lamb meals served in the air.
  • The most popular dish in the airline’s premium cabins was Peter Gordon’s blackened King salmon with saffron potato mash and edamame.
  • The airline poured more than seven million glasses of exclusively New Zealand wines onboard and in its lounges, with sauvignon blanc the preferred tipple.
  • Air New Zealand’s expanded Kiwi beer selection proved popular, with 512,000 cans of beer served inflight – up 7.5 percent on the year prior.
  • Customers also munched their way through 15.3 million of Air New Zealand’s iconic lollies.

Travellers enjoyed thousands of hours of inflight entertainment, with The Greatest Showman the most viewed film on Air New Zealand flights – seen 168,500 times in the past year. Kiwi band Six60’s track Closer was the most listened to, with around 6,500 hits each month.

More customers also chose to minimise the footprint of their flights in 2018, with close to 27,000 tons of carbon offset this calendar year.

Air New Zealand Chief Marketing and Customer Officer Mike Tod says the airline keeps close eye daily on traveller preferences so that it can deliver what matters most to them.

“Air New Zealand prides itself on our warm Kiwi service on the ground and in the air. And customers continue to appreciate the taste of the nation when they are with us, whether it be the selection of our outstanding New Zealand wines or menus created by our award-winning chefs Peter Gordon and Michael Meredith,” Mr Tod says.

“We’d like to thank those who have travelled with us in 2018, which has had its fair share of challenges, as schedules have been disrupted by the impact of issues with the Rolls Royce engines that power some of our 787s and significant weather events around the country.”

Following the launch of direct flights to Chicago and Taipei, 2019 is shaping up to be the airline’s biggest year yet, with Air New Zealand expecting to fly 18 million customers in the coming 12 months.

Copyright Photo: Air New Zealand Boeing 787-9 Dreamliner ZK-NZE (msn 34334) DPS (Pascal Simon). Image: 945013.

Air New Zealand aircraft slide show:

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First nonstop air service between New Zealand and Chicago lands at O’Hare

Air New Zealand’s inaugural flight between Auckland and Chicago landed at O’Hare International Airport last Friday afternoon.

Air New Zealand’s inaugural flight between Auckland and Chicago landed at O’Hare International Airport last Friday afternoon.

Flight NZ26 departed at 5:01PM local time in Auckland and landed in Chicago at 12:11 PM local time in Chicago. With a flight time of approximately 15 hours northbound and just over 16 hours southbound, the flight is Air New Zealand’s longest, taking over from AucklandHouston which has a flight time of 13.5 hours.

Air New Zealand Chief Executive Officer Christopher Luxon, who travelled on the inaugural flight, says the airline’s new AucklandChicago service means exciting new opportunities for travelers to explore the United States’ third-largest city, along with more of the East Coast of the US and Canada.

Air New Zealand’s direct AucklandChicago service, operated by its Boeing 787-9 Dreamliner aircraft, will depart Auckland on Wednesday, Friday and Sunday as follows:

Flight No.

Operated by

Aircraft type

Departs

Arrives

Effective dates

Frequency

NZ26
(UA6728)

Air New
Zealand

Boeing 787-9
Dreamliner

Auckland
20:10

Chicago

16:15

2 Dec 2018 –

8 Mar 2019

Wed, Fri,
Sun

NZ26
(UA6728)

Air New
Zealand

Boeing 787-9
Dreamliner

Auckland

20:10

Chicago

17:15

10 Mar 2019 –
29 Mar 2019

Wed, Fri,
Sun

NZ27

(UA6727)

Air New
Zealand

Boeing 787-9
Dreamliner

Chicago

19:10

Auckland

06:30+2

30 Nov 2018 –

8 Mar 2019

Wed, Fri,
Sun

NZ27

(UA6727)

Air New
Zealand

Boeing 787-9
Dreamliner

Chicago

20:10

Auckland

06:30+2

10 Mar 2019 –
29 Mar 2019

Wed, Fri,
Sun

Photo: Air New Zealand.