TODAY |

Air New Zealand suffer 35 per cent loss in earnings for last six-month period

Air New Zealand has announced a drop in earnings for the last six-month period with the company making $211 million, down 35 per cent.

The result was down from the $323 million the company earned before tax in the first half of last year.

Air NZ had a net profit of $152 million for the six-month period ending 31 December 2018.

The result included operating revenue growth of 7.1 per cent which was offset by a 28 per cent increase in fuel prices and increased operational costs while an operating cash flow of $475 million remained.

Chief executive officer Christopher Luxon said the airline will review its network, fleet and cost base to reflect the new environment.

"While we continue to expect solid growth across our key markets including domestic New Zealand, we cannot ignore signals that the rate of growth has slowed somewhat from prior years," he said.

"We pride ourselves at Air New Zealand on being nimble and able to quickly adjust our business to reflect the changing macro environment and this time is no different."

The findings of the review of the network, fleet and cost base is expected by the end of March.

The result meant Air New Zealand were revising its outlook for the 2019 financial year.

"Based upon current market conditions and assuming an average jet fuel price of US$75 per barrel for the second half of the financial year, 2019 earnings before taxation is expected to be in the range of $340 million to $400 million," the airline said in a media release.

READ MORE: Shane Jones warns he'll be 'full volume' if Air NZ's lower fares prove to be 'a gimmick'

Mr Luxon said the airline remained committed to offering cheap air travel.

"We are committed to ensuring that air travel is more affordable than ever for Kiwis, whether they are flying from the main centres or from regional airports.  With prices as low as $39, and with our unmatched network of over 400 flights a day to 20 different destinations in New Zealand, there has never been a better time to get out and explore this amazing country."