Air NZ reports slight drop in passenger numbers

Air New Zealand carried slightly fewer passengers in the first two months of its financial year than it did last year, but on average earned more from each of them.

The airline said it carried 3.1 per cent fewer passengers in July and August, a drop attributed to the Lions rugby tour boosting the figures in 2005.

However, its yield - the revenue it earns from passengers - was 14. 1 per cent higher than last year's, due to better long-haul services, the lower New Zealand dollar and fare increases.

Chief financial officer Rob McDonald said a continuing decline in Japanese visitors had also affected traffic figures. Also, direct international services from regional areas of New Zealand to Australia continued to be poorly patronised.

Goldman Sachs analyst Peter Sigley said the yield rise of 14 per cent would help to offset high fuel costs and strengthen the company's balance sheet going forward.

Air New Zealand said its load factor - the percentage of seats it fills - was down 4.4 percentage points to 73.1, reflecting the large numbers of visitors from Britain for the Lions tour in July last year.

The airline has not yet released a profit forecast for this financial year and McDonald said yesterday he did not want to comment about future projections of passenger numbers.

Air New Zealand will stop flying to Singapore - where it has been losing money for a number of years - at the end of the month.

"We will be flying to Shanghai and have a double-daily to London, so we will just have to see how those services do over the high season."

McDonald said the change from 767 to 777 aircraft - which are 30 per cent bigger - had boosted capacity.

Air New Zealand stock closed at $1.21 yesterday.