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AIR New Zealand expects its full-year earnings to be down 40 per cent, despite yield improvements in the final quarter of last financial year.
Soaring fuel costs are expected to push down earnings before tax and one-time charges from $NZ235 million in 2004-05 to about $NZ140 million ($114 million) in the year that ended yesterday. The Kiwi carrier made the prediction as it yesterday revealed passenger load factors in May fell 3 percentage points as the arrival of new Boeing 777s pushed capacity ahead of off-peak demand.
But it said the fall in load factor was "more than offset" by revenue yield improvement as its new premium cabins generated higher revenues. Group yields, adjusted for currency movements, were up 6.8 per cent in the year to May 31 as short-haul figures rose 8.1 per cent and long-haul yield rose 4 per cent.
"A combination of fare increases in response to high fuel prices and improved load factors in the premium cabins has meant that the yield improvement in the final quarter of this financial year has been better than expected," the airline said.
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