Bookings for New Zealand travel are doing well and Air New Zealand is expecting a return to profit, according to an update from the flag carrier.
“Air New Zealand has continued to see strong forward sales over the first three months of the financial year, particularly for travel through to January 2023 and continues to operate approximately 70 percent of FY19 capacity,” the airline explained in a stock exchange statement on September 21, 2022.
Should the strong sales continue, and capacity remain at those levels, the airline said it expects to report a profit before tax and other significant items of between NZD200 million and NZD275 million ($118-162 million) for the first six months of its financial year.
By comparison, the airline reported losses of NZD725 million ($427 million) and NZD444 million ($262 million) in its last two financial years after New Zealand closed its borders to contain the spread of COVID-19.
The airline has recently said it is in the ‘revive’ phase following the COVID-19 pandemic and is looking forward to a year of flying passengers uninterrupted by the pandemic and closed borders. Air New Zealand has started direct flights from Auckland (AKL) to New York JFK using the Boeing 787 Dreamliner, is reactivating its 777s from desert storage and has detailed plans to overhaul the cabins of its Dreamliners.
However, the airline cautioned against assuming the first half performance could be repeated in the second half of the year, “given the many uncertainties in the trading environment”. Among the risks are uncertain demand in the next half of the financial year, fuel prices, cost pressure, and the risk of global recession.
“The airline notes that fuel prices remain highly volatile and that this is one of many factors that have the potential to slow our recovery and significantly impact earnings. Additionally, demand in the second half of the financial year remains highly uncertain,” Air New Zealand said in the statement.