Air New Zealand has suffered a big drop in profit for the first half of FY20, citing slower demand, weakness in the global cargo market and the ongoing unrest in Hong Kong.
The Kiwi carrier posted a net profit after tax of NZ$101 million ($96.9 million) for the six months to 31 December 2019 – down 32.7 per cent on the prior corresponding period.
Air New Zealand’s half-yearly earnings before tax fell 34.1 per cent to NZ$139 ($133 million), while revenue rose three per cent to NZ$3 million ($2.9 million).
The revenue growth was driven by “solid” demand across the airline’s domestic and Pacific Islands networks, as well as recently launched services into Asia and North America.
Air New Zealand said this helped to mitigate weaker cargo demand, increased competition on the Tasman and the impact of the Hong Kong protests.
The results come not long after the airline revealed it expects its earnings to be hit by between NZ$35 million ($33.6 million) to NZ$75 million ($72 million) due to the coronavirus outbreak.
Air New Zealand’s new CEO, Greg Foran, has committed to a review of the airline’s opportunities and risks for the first 100 days in the role.
“Air New Zealand holds a special place in the hearts of New Zealanders and we take that responsibility very seriously,” he said.
“As such, the diagnostic of the airline will look at how we can drive long-term sustainable outcomes for our customers, our staff, the broader community, and our shareholders.”