Air New Zealand: Jan-2017 results show passenger traffic increase but drop in revenue

Air New Zealand pax up 4% to 1.2m with 83% load factor in Jan-2017

Traffic highlights for Jan-2017:

Passenger numbers: 1.2 million, +3.9% year-on-year;

◦          Short-haul: 1.0 million, +3.9%;

◦          Domestic: 708,000, +5.5%;

◦          Tasman/Pacific: 295,000, +0.4%;

◦          Long-haul: 179,000, +3.4%;

◦          Asia/Japan/Singapore: 74,000, +10.6%;

◦          North America/UK: 105,000, -1.1%;

Passenger load factor: 82.6%, -2.6 ppts;

◦          Short-haul: 78.8%, -3.6 ppts;

◦          Domestic: 79.2%, -2.1 ppts;

◦          Tasman/Pacific: 78.7%, -4.1 ppts;

◦          Long-haul: 85.4%, -1.9 ppts;

◦          Asia/Japan/Singapore: 83.0%, -5.8 ppts;

◦          North America/UK: 86.9%, +0.4 ppt.


For the financial year to date, Short Haul passenger revenue per ASK (RASK)* decreased 6.4% while Long Haul RASK* decreased 14.1%. Removing the impact of foreign exchange, Group-wide RASK* decreased 8.9%, and Group-wide yields for the financial year to date decreased 7.3% on the same period last year.

Source: Company statement, 17-Feb-2017.


Asian demand up nearly 11% over Jan-2017

Air New Zealand reported (17-Feb-2017) RPKs on Asia/Japan/Singapore services increased 10.8% year-on-year in Jan-2017, with ASKs increasing 18.6%, reflecting additional frequency to Shanghai over the Chinese New Year holiday and the new seasonal service between Auckland and Osaka. Load factor decreased 5.8 percentage points to 83%.


Tasman/Pacific traffic up 1.6% for Jan-2017

Air New Zealand reported (17-Feb-2017) Tasman/Pacific RPKs increased 1.6% year-on-year in Jan-2017. ASKs increased 7%, reflecting growth on several Pacific Island routes as well as Australia, and up-gauging to larger aircraft. Load factor on Tasman/Pacific services decreased 4.1 ppts to 78.7%.


Declining RPKs and ASKs on Americas/UK routes

 Air New Zealand reported (17-Feb-2017) Revenue Per Kilometre (RPK) on Americas/UK routes decreased 0.7% year-on-year in Jan-2017, with ASKs decreasing 1.2% due to reduced frequency on the Auckland-Los Angeles and Auckland-San Francisco routes, partially offset by increased services to Houston and Buenos Aires. Load factor increased 0.4 ppts to 86.9%.


Forward hedging 80% of 3Q2017 fuel volume

 Air New Zealand disclosed (20-Feb-2017) its fuel hedge positions as at 14-Feb-2017:

  • 3QFY2017: 80% of volume hedged, USD50.91 per barrel ceiling, USD34.83 per barrel floor price;
  • 4QFY2017: 83% of volume hedged, USD54.24 per barrel ceiling, USD38.58 per barrel floor price;
  • 1QFY2018: 64% of volume hedged, USD56.14 per barrel ceiling, USD42.35 per barrel floor price;
  • 2QFY2018: 32% of volume hedged, USD57.34 per barrel ceiling, USD44.44 per barrel floor price.