KEY POINTS:
Australia's Qantas appears to be finding the competition tough in New Zealand.
Accounts filed with the Companies Office last month by Qantas' New Zealand unit Jetconnect, show its June year net profit almost halved to $6.9 million from $12.5m, business weekly The Independent reported today.
Operating revenue fell to $107.2m from $109.5m.
The Independent said that because it pays lower tax in Australia, the airline may be "spreading its accounts" to gain maximum tax benefit.
Qantas, which is subject to a takeover bid by private equity firms, is cutting back New Zealand operations. This month it is quitting its Wellington-Christchurch connection, leaving it essentially flying Auckland-Wellington.
Air NZ has put further heat on Qantas by announcing cuts of as much as 26 per cent on 300 domestic routes.
Jetconnect still has a 4.41 per cent Air NZ stake on its books in the form of convertible loan notes, stemming from the airlines' unsuccessful attempt to form an alliance.
Air NZ can either repay the face value of $98.2m or force Qantas to convert the notes to shares. If Air NZ does nothing, the notes convert to shares in 2013.
- NZPA
