Air New Zealand is optimistic operating earnings will improve next year despite another "tough year", its chairman told shareholders yesterday.
"We are one of very few airlines in the world to have paid a dividend through the last two challenging years," John Palmer said at the annual shareholder meeting.
The board had
paid out $75million in dividends in the year to June 30. That was up 8 per cent on the previous year and reflected an "improved outlook", said Mr Palmer.
The airline reported an annual pre-tax profit of $137million, a decrease of 6 per cent on the prior year.
The board had confidence in Air NZ's ability to return to stronger profitability in the medium term, while also recognising the need for preserving "financial flexibility", he said.
Despite another "tough year" it had $1.1billion in cash, operating cash flow was up 33 per cent and gearing was at 47 per cent.
Chief executive Rob Fyfe took an opportunity to have a crack at the Australian Competition and Consumer Commission.
The commission signalled in a draft determination it intended to decline Air NZ's transtasman alliance proposal with Virgin Blue.
Mr Fyfe said the deal with Virgin Blue was a "critical plank" in its business strategy in the face of "structural disadvantages we face as a result of the accelerating pace of global consolidation". Air NZ was very disappointed by the ACCC's draft decision, which "effectively puts at risk competition within Australia and across the Tasman", he said.
"We believe the regulator charged with promoting competition is at serious risk of killing it off. It is one thing to take on the challenge of competing fairly against a dominant market player. It is quite another to have to compete with one arm tied behind your back," he said.
