Air New Zealand reported a steep 31-percent annual net profit drop on Thursday thanks to rising jet fuel prices, weaker inbound demand, and ongoing setbacks related to premature blade wear in the Rolls-Royce Trent 1000s that power its Boeing 787s.
According to the company’s financials, the airline recorded a net profit of $173 million to the end of June, down from $249 million a year earlier. Operating revenue rose 5.3 percent to $3.7 billion. Meanwhile, profit before taxation, the carrier’s preferred performance measure, also fell 31 percent, to $239.2 million.
"While we are disappointed that we did not meet the expectations we first set for ourselves at the start of the financial year, the fact is we are operating in a different demand environment than we were 12 months ago,” said Chairman Tony Carter. The carrier forecasts pre-tax earnings of $223 million to $287 million for the upcoming 2020 financial year.
Air New Zealand remains among several international carriers that have felt the effects of ongoing Trent 1000 engine troubles. Last year, the airline had to ground up to five of its 13 Boeing 787-9s over the problems, which by late May had affected some 2,500 flights, it reported.
Alternative General Electric GEnx-1B turbofans will power Air New Zealand’s eight incoming Boeing 787-10s. Valued at $2.7 billion, the new aircraft will replace eight aging Boeing 777-200ERs powered by Trent 800s. ANZ expects deliveries from the new order to occur between 2022 and 2027.
Carter said he expects the airline’s remaining Rolls-Royce engines to return to service in the “coming months.” Additional plans call for the delivery of six ATR turboprops and three Airbus A320/321neos in the 2020 financial year; an additional 787-9 will also join the airline’s fleet later this year.
Thursday’s financial report is the last annual result under long-standing CEO Christopher Luxon. The carrier’s chief financial officer, Jeff McDowall, will temporarily replace Luxon, who announced his resignation in June. McDowall will begin his tenure on September 26 and remain until the airline’s board finds a permanent replacement.