Air New Zealand full-year profits in tourism boom, but faces increased competition

WELLINGTON: Air New Zealand announced record results on Friday amidst a tourism boom, but profits were below expectations and the company warned of increased competition.

Net profit before taxation had risen 40 percent to NZ$663 million in the year to June.

Analysts had been expecting a pretax profit of around NZ$837 million. Air New Zealand was not alone in capitalizing on New Zealand's tourism boom and the company warned they were expecting increased competition as other international airlines ramped up flights and entered the New Zealand market. "There's no doubt customers have more choice," said Chief Executive Officer Christopher Luxon in a statement.

New Zealand has experienced a tourism and migration boom in the past year with visitor arrivals up 11.2 percent to 3.34 million for the year ending July. American Airlines had launched an Auckland-to-Los Angeles service in June, with joint venture partner Qantas , ending the monopoly Air New Zealand had on the trans-Pacific route.

Other international airlines including Qatar Airways and China's Tianjin Airways had also this year announced flights to New Zealand.

Air New Zealand said it was growing both its overseas and domestic business and expected to spend NZ$2.1 billion in the next five years on aircraft capital expenditure.

The company forecast earnings before taxation for 2017 to be between NZ$400 million and NZ$600 million, owing to the uncertain impact of competition.

The airline announced a final ordinary dividend of $NZ0.10 per share and an additional special dividend of NZ$0.25 per share.