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Profit flies high for Air NZ
(CNN) -- Air New Zealand has returned to the black after the horror year of 2001-02, posting a net profit of NZ$165.7 million ($93.8 million) after getting a boost from the New Zealand dollar's appreciation. The result for the year to June 30 compares with a loss of NZ$318.5 million the previous year, when the airline was struggling to survive after nearly collapsing in late 2001. CEO Ralph Norris told CNN on Thursday that Air New Zealand cut capacity to Asia as the SARS virus hit passenger loads in the first half of 2003, but this was partly offset by improved returns on flights to Europe via the United States. "That made a reasonable difference," he said. Norris also said he was "feeling quite confident" that the airline's proposed strategic alliance with Australian carrier Qantas would go ahead, despite the opposition so far of competition regulators both in New Zealand and Australia. Referring to regulatory hearings in New Zealand last week about the proposal for Qantas to take a 22.5 percent stake in Air NZ and integrate their flight schedules, Norris said his airline "made a compelling case" that the deal should go ahead. A decision is expected by the end of September. Norris also said Air New Zealand -- which had to be rescued via a NZ$885 million government bailout in late 2001 -- had to continue to rationalize, simplify its business and cut costs. Air New Zealand's results for the 2002-03 year were in line with expectations, with pre-tax profit before unusual items of NZ$220.3 million, up NZ$187.3 million on the previous year. Last month the carrier foreshadowed its pre-tax profit would be "comfortably" above NZ$200 million after SARS-hit bookings recovered late in the financial year. Norris said in a statement Thursday to the NZSE that profits were helped by the strengthening of the New Zealand dollar against the U.S. dollar. About 45 percent of Air New Zealand's costs are in U.S. dollars. Its shares are 2 percent higher at NZ$0.50 in Thursday afternoon trade. The broader New Zealand market is up half a percent. The profit for the year to June 30 compares with a loss of NZ$318.5 million the previous year, when the airline was struggling to survive after nearly collapsing in late 2001. CEO Ralph Norris told CNN on Thursday that Air New Zeland cut capacity to Asia as the SARS virus hit passenger loads in the first half of 2003, but this was partly offset by improved returns on flights to Europe via the United States. "That made a reasonable difference," he said. Norris also said he was "feeling quite confident" that the airline's proposed strategic alliance with Australian carrier Qantas would go ahead, despite the opposition so far of competition regulators both in New Zealand and Australia. Referring to regulatory hearings in New Zealand last week about the proposal for Qantas to take a 22.5 percent stake in Air NZ and integrate their flight schedules, Norris said his airline "made a compelling case" that the deal should go ahead. A decision is expected by the end of September. Norris also said Air New Zealand -- which had to be rescued via a NZ$885 million government bailout in late 2001 -- had to continue to rationalize, simplify its business and cut costs. Air New Zealand's results for the year to June 30 were ahead of expectations, with pre-tax profit before unusual items of NZ$220.3 million, up NZ$187.3 million on the previous year. Last month the carrier foreshadowed its pre-tax profit would be "comfortably" above NZ$200 million after SARS-hit bookings recovered late in the financial year. Norris said in a statement Thursday to the NZSE that profits were helped by the strengthening of the New Zealand dollar against the U.S. dollar. About 45 percent of Air New Zealand's costs are in U.S. dollars. Its shares are 2 percent higher at NZ$0.50 in Thursday afternoon trade. The broader New Zealand market is up half a percent.
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