KEY POINTS:
Fallout from the financial crisis has cut the number of passengers Air New
Zealand carries for the third month in a row and forced Qantas to slash its profit forecast.
Qantas now expects its pre-tax profit to fall 65 per cent to around A$500 million ($595 million) for
the year to June 2009, compared with an average forecast from three analysts of
A$749 million, according to Reuters Estimates.
Its chief executive Geoff Dixon said: "We are in unpredictable times and the international business market, in particular, has slowed."
In New Zealand, Qantas has announced it will begin cutting off-peak domestic flights from next month. A spokesman yesterday said the airline had yet to specify routes to be cut.
Air New Zealand's passenger numbers fell by 1.8 per cent in October compared with a year earlier. Numbers on the airline's Tasman and Pacific routes dropped by 9.6 per cent.
Air New Zealand carried 971,000 passengers last month, down from 988,000 a year ago. The airline's capacity was cut by 1.5 per cent and by the middle of next year its international capacity will have dropped by about 13 per cent on 12 months earlier.
Domestic passenger growth was the bright spot in last month's figures. The number of passengers increased 1.8 per cent to 623,000, and the passenger load factor was 1 percentage point higher at 73.3 per cent, despite capacity increasing 1.9 per cent.
Air New Zealand's grabaseat discount seat programme has helped boost demand in the market where Pacific Blue has extended its main trunk route to Dunedin.
In the long-haul market Air New Zealand's passenger load factor remained stable as capacity was effectively managed by a 3 per cent reduction in seats. Long-haul passenger numbers were down 3.6 per cent to 132,000, with North America/Britain routes showing signs of weakness as passenger numbers fell 6.5 per cent. Passenger numbers for Asia/Britain and Japanese routes were flat.
Air New Zealand announced yesterday it would sell then lease back two Boeing 777-300s it has on order as part of a fleet ownership reconfiguration.
The airline has struck a deal with DAE Capital, the aircraft leasing and financial business arm of Dubai Aerospace Enterprise. The two aircraft are scheduled for delivery in early-2011.
Chief financial officer Rob McDonald said demand was uncertain but was weaker across all markets, with the Tasman especially difficult.
The airline has $1.3 billion in the bank and "sufficient financial flexibility to consider opportunities if they arise".
Pacific Blue, which entered the domestic market just over a year ago, said demand for its services here remained strong. Passenger numbers were up 6 per cent across the Tasman on top of new capacity added with new routes between Auckland and Sydney and Melbourne, the airline's commercial general manager Adrian Hamilton-Manns said.
Shares in Air New Zealand closed up 3c at 87c yesterday.