Air NZ safe from oil increases

By CHRIS DANIELS

Air New Zealand looks to be well protected from soaring world oil prices, for the next few months at least.

The airline, which has started imposing a fuel surcharge on its tickets, released its quarterly "fuel hedging position", showing how much it is exposed to world prices.

For the quarter from July to September, Air New Zealand is 70 per cent hedged for its fuel, dropping to 55 per cent for the following three months.

Hedges are taken out by airlines and other big fuel users to even out revenue streams in times of volatile world prices.

Much of its hedging for the next quarter is for benchmark Singapore jet fuel in a range between US$28.12 ($44.53) and US$32.36 ($51.25).

Present prices are $43.50, down on recent highs of $48.85. Across its whole network, April was a good month for the airline.

Passenger numbers were up 12.5 per cent, but this was the result in part of Sars reducing demand last April.

Load factors were up nearly 5 per cent. For the year so far, passenger numbers are up 9.5 per cent.

But more passengers do not always mean more profits.

Yield for the 10 months to April is down 3.3 per cent, a result of dropping fares and stimulating the travel market.

Air New Zealand also said yesterday that the credit ratings agency Moody's had upgraded its rating.

This was mostly due to the fact that the airline was largely Government-owned.