Air New Zealand chief executive Christopher Luxon said 2017 has been an exciting and productive year. Photo / Jason Oxenham
Air New Zealand chief executive Christopher Luxon said 2017 has been an exciting and productive year. Photo / Jason Oxenham
Air New Zealand will be giving 8500 members of staff a $1700 bonus after the company reported its second highest earnings in company history.
The airline's full year earnings fell 21 per cent in an increasingly competitive market, but were still the second highest ever as the airline continues tobenefit from lower jet fuel prices and the country's ongoing tourism boom.
Pre-tax earnings dropped to $527 million in the year to June 30, compared with $663m in the prior year, and were still the second highest in its history, the company said in a statement.
In June the company said earnings before taxation were likely to exceed $525m.
Air New Zealand's shares fell on the result declining 7c to $3.33. The share price has risen 88 per cent in the past year.
Net profit fell to $382m from $463m. Earnings per share were 33.5 cents versus 40.8 cents in the prior period. Operating revenue slipped to $5.1 billion from $5.23b.
"This year Air New Zealand faced an unprecedented increase in the level of competition from some of the world's largest airlines and effectively rose to the challenge," said chief executive Christopher Luxon.
The bonus awarded by the board will go to Air New Zealand staff who do not have other incentive programmes as part of their employment agreement.
The board also declared final fully imputed dividend of 11 cents per share, an increase of 10 per cent on the prior year, bringing the full year declared ordinary dividends to 21 cents per share. The final dividend will be paid on September 18 to investors on record at the close of business on September 8.
Looking forward to the year ahead, the airline said it was optimistic about the overall market dynamics. Based on current market conditions and assuming an average jet fuel price of US$60 per barrel (which represents the average over the past two months), the airline is aiming to improve upon 2017 earnings, it said.
Harbour Asset Management portfolio manager Shane Solly said the share price fall could be because the profit forecast was below what some had expected.
Solly said the company appeared to have executed its growth strategy while managing competitive challenges.
