Air NZ declares dividend despite fall in half year profit

Air New Zealand announced its first dividend in four years today despite reporting a reduced half year net profit of $102 million, down 3 per cent on the same period a year ago.

The airline's total operating revenue rose 2 per cent to $1.788 billion.

It declared a fully imputed interim dividend of 2.5cps -- its first since the Ansett collapse in 2001. The company said its full-year dividend would be 5c a share.

Chairman John Palmer said today's result was solid given the challenging trading environment.

He said the airline's financial turnaround since its 2001 bailout by the Government had been faster than expected "especially in an industry that remains threatened by over-capacity and price wars".

"Despite these hurdles, the company's financial position has continued to steadily improve," Mr Palmer said.

Chief executive Ralph Norris said this improvement was expected to continue.

"If the operating environment remains at the present levels, then the company can expect to exceed earlier earnings estimates and come closer to the previous year's profit of around $240 million before unusuals and tax," he said.


Mr Norris said growth in bookings on Air NZ's domestic, Tasman and Pacific Island services since the introduction of a new business model and lower fares had been outstanding.


"We fully expect that our new long haul product will be equally well embraced when it is progressively introduced into service from later this year."


As part of the airline's plans to develop its long haul business, it announced today a new global freighter service beginning from next month.


The dedicated service will use hired B747-400 aircraft and will depart twice a week from Auckland, calling at Melbourne, Shanghai, Frankfurt and Chicago before returning to Auckland.


The service will replace Air NZ's around-the-world service in partnership with Lufthansa.


- NZPA