Air New Zealand full year profit falls 31pc

Air New Zealand has announced a 31 per cent drop in annual profit to $353 million.

Fuel costs and engine problems have taken a slice out of Air New Zealand’s profits. Picture: Supplied.

Air New Zealand has announced a 31 per cent drop in annual pre-tax profit to $353 million, from $510 million the previous year.

Admitting “disappointment” with the result, chairman Tony Carter said the fact was the airline was operating in a different demand environment than 12-months ago.

“When we first saw signs that demand was slowing, we took immediate steps to review our network, fleet and cost base, to position our airline for success in a lower growth environment,” Mr Carter said.

“To have achieved a solid result despite these headwinds speaks volumes about the extraordinary dedication and commitment of our people.”

Along with the slowing demand, Air New Zealand’s bottom line was hit by a $180m hike in the fuel bill and a temporary increase in operating costs due to global Rolls-Royce engine issues.

CEO Christopher Luxon said as the airline navigated a more challenging demand environment, delivering competitive fares and a superior customer experience remained a top priority.

“While the New Zealand market has seen foreign competitors reduce capacity or withdraw completely this year, we have continued to grow both domestically and internationally and to adjust our domestic fare structure to keep New Zealanders connected to each other and the world,” Mr Luxon said.

“In a society with rapidly changing customer expectations, we know we need to continue to lift our game.”