Air New Zealand swung to a pre-tax profit of NZ$299 million ($185 million) in the first half of its 2023 financial year, riding a strong recovery in domestic and international air travel.

The positive result in the six months to 31 December 2022 represents a major recovery from the pre-tax loss of NZ$367 million it recorded to the six months to 31 December 2022, according to the carrier’s interim financial statement.

ZK-okn Air New Zealand 777-300ER

Source: Wikimedia Commons/Mark Harkin

Air New Zealand’s long-haul performance has sharply improved with the remove of travel restrictions

The six-month period also reflects the absence of travel restrictions related to the coronavirus pandemic.

Air NZ also swung to a net profit of NZ$213 million from a net loss of NZ$272 million a year earlier.

Operating revenue during the reporting period tripled to NZ$3 billion. The company says the results reflect “sustained demand,” particularly during the summer peak period. Business travel and overseas visitors have also returned, and cargo revenues are strong.

“Our recovery is well underway and operating performance is improving steadily, but like most airlines globally, we continue to experience challenges that make it hard at times for our fantastic team to delivery the level of service we expect of ourselves, and our customers expect of us,” says chief executive Greg Foran.

In the six months to 31 December, Air NZ carried 8 million passengers, compared with 3.2 million a year earlier. ASKs quadrupled in the six-month period, while RPKs rose six-fold. Load factors rose 29 percentage points to 87.5%.

While domestic traffic improved substantially in the last six months of 2022, international long-haul traffic soared amid the absence of travel restrictions. During the period Air NZ carried 596,000 long-haul passengers, up twenty-fold from a year earlier.

Long-haul ASKs grew sevenfold, and long-haul RPKs grow over twenty times from a year earlier. Long-haul load factors also shot up 57.9 percentage points to 87.9%.

Cargo revenue for the period came in at NZ$378 million, down from NZ482 million. Air NZ attributed the decline to absence of NZ$111 million previously provided under Wellington’s Maintaining International Air Connectivity scheme.

At the end of 2022, Air NZ’s cash and cash equivalents stood at NZ$2.2 billion, up from NZ$156 million a year earlier.

The carrier anticipates continued strong demand in the second half of its 2023 financial year but acknowledges and uncertain economic outlook and rising inflation. It expects its full year earnings to be in the NZ$450-530 million range.