Higher fuel costs see Air NZ trim profit forecast

Air New Zealand today trimmed its net profit forecast before one-offs to $220 million for the June year, down from $240m, as a result of highter fuel costs.

The new forecast reverted to a level given last October.

"Jet fuel prices have been materially higher, principally due to the continuance of significantly wider jet fuel margins," the airline said in a statement.

Fuel costs account for about 20 per cent of costs and are expected to be about US$435m ($625m) in the year.

In April Air NZ increased its fuel surcharge because of soaring fuel costs, which are 80 per cent higher than a year ago.

Air NZ said its load factor was 74.9 per cent in April against 76.5 per cent a year ago. However, it noted that the Easter holiday had fallen in March, influencing the result.

The load factor for March and April together was up 2.2 per cent to 75.8 per cent and year to date loads were up 1.1 percentage points to 76.7 per cent.

Air NZ reported a full-year profit before tax and unusual items of $243 million in 2004 for a net profit of $166 million.

The company carried 5.0 per cent more passengers during April compared with the previous period and year to day passenger numbers were up 7.1 per cent to 9.7 million.

The domestic load factor was up 1.0 percentage point in April to 77.7 per cent while Tasman and Pacific Islands loads were down 5.1 per cent to 70.5 per cent.

Loads to Asia (including Japan) increased 4.1 points to 80 per cent and to North America and Europe fell 2.9 points to 74.6 per cent.

Ten month trends showed domestic and long haul stable while short haul international was 1.4 per cent lower.

The company said it had US$550 million ($790m) hedging at US71.33c covering its purchase of three Boeing 777-200ER, three A320-200 Airbus and 15 Bombardier Q300 turboprop aircraft.

Air NZ will announce its full year result on August 29.

The company said the new NZ-British agreement on landing rights was likely to take to implement.

Air NZ shares were unchanged today on $1.46.

- NZPA