Air NZ profits hit hard by quakes

Profits have fallen at national airline Air New Zealand, with the Christchurch and Japanese earthquakes hitting the company hard.

Normalised earnings before tax were $75 million, a 45 per cent fall from the 2010 year, while after tax profits were down 1 per cent to $81 million.

"When reporting our interim result for the first six months of the financial year in February, we gave a positive view about the prospects for our full year performance. Within a couple of weeks of that, the dual effects of the Christchurch and Japan earthquakes caused us to update our outlook for the second half," said chairman John Palmer.

Chief executive Rob Fyfe said the operating conditions of the past six months were cumulatively the most difficult Air New Zealand has faced in the past decade.

"The combination of reduced demand for travel as a result of the devastating Christchurch and Japan earthquakes, additional capacity into Christchurch to assist the relief effort and compassionate fares for those affected by the Christchurch earthquakes resulted in an estimated $70 million negative impact on earnings," said Fyfe.

Highlights:
- Normalised earnings before taxation of $75 million
- First half year profit $112 million, second half year loss of $37 million
- Net profit after taxation down 1 per cent to $81 million
-Operating revenue up 7 per cent to $4,341 million
- Net cash position $860 million
- Gearing improved to 46.7 per cent
- Final dividend of 2.5 cents per share (unimputed)

-NZ HERALD ONLINE