Air NZ profits "not good enough": analyst
29 Aug 2007
An aviation analyst has said that the rise in profits at Air New Zealand — net profit after tax rose to $214 million, a rise of 123 per cent — is good, but not good enough.
Radi New Zealand reported that Rob Mercer of Forsyth Barr says $214m is not very good when the operating revenue is 20 times, at $4.3 billion. Another analyst, Jason Bloom of Deutsche Bank, says the result is solid, in line with expectations, but it does not put the airline into clear skies.
Meanwhile, unions complain that the financial improvement was achieved at a cost of more than 500 redundancies. The Engineering, Printing and Manufacturing Union says its members will lose about 500 jobs when restructuring at the airline ends.
Members of the Service and Food Workers Union have already lost about 70 jobs. Air NZ says the redundancies saved it $25m a year, and enabled it to meet competition head on. The company says job losses are almost at an end after three years.
But the New Zealand government isn't complaining. With Air NZ shares at $2.08 on the NZX 50 on Tuesday 28 August, the government's 77 per cent stake is valued at $1.6 billion, almost twice what was paid for it six years ago. In addition, the government has earned dividends; $155 million in the past financial year.
