Airways Corp Profit Takes A Dive
March 19th, 2009
Airways Corp. posted a 5% increase in revenue for the six months to Dec. 31, reflecting the arrival of Virgin Blue’s local unit Pacific Blue part-way through the same period a year earlier. The corporation, responsible for air navigation services within NZ’s 37m km2 of airspace, had sales of $70.2m in the first half as an increase in customers helped offset the impact of the global financial crisis and the recession at home. Negotiations for a new pricing agreement with its major airline customer group, BARNZ, kicked off in the New Year.
The state-owned enterprise’s net profit fell to $5.6m in the first-half from $7.1m a year earlier, as costs rose. Domestically, the corporation noted airlines were trimming schedules and downgrading capacity as the economic downturn saps demand for flights. It is embarking on a cost reduction programme in response, according to the first-half report. It warns any further reductions in airline schedules this year will put its full-year profit target at risk. Last month, Air NZ reduced flights between Dunedin and Aust and suspended similar flights linking Hamilton.
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