Air NZ, Cathay extend AKL-HKG alliance until 2019

Operating revenue rose 6 percent to $4.93 billion.

“Our strategic initiatives over the past three years have positioned us well to take advantage of market dynamics which have contributed to these results”, said chairman Tony Carter.

Mr Luxon said Buenos Aires and Houston were selling “incredibly well” and the airline was already talking about increased capacity on those routes.

Air New Zealand and Cathay Pacific have received government approval to extend their alliance until October 2019. That included a $29 million loss on Air New Zealand’s stake in Virgin Australia.

“This agreement has not only let Air New Zealand broaden its offering to customers between New Zealand and Hong Kong, but has also allowed us to offer our customers excellent access to destinations throughout China and North Asia on Cathay Pacific and its sister airline Dragonair”, Luxon said in a statement.

Air New Zealand announced Wednesday its profit after tax was 327 million New Zealand dollars (US$212 million) for the year ended in June.

Over the a year ago , Air NZ has increased both passenger numbers and capacity and has been boosted by cheap fuel prices.

Before-tax profits are up 49 percent to a record $496 million.

The airline’s growth contributed to its net debt more than doubling to NZ$836 million. Full year ordinary dividends were up 60 percent to 16 cents per share.

The Chinese market had been a saviour for New Zealand’s inbound tourism sector over recent years and she said the airline would have to look closely at how it would compete for that.

The Qantas-owned airline is narrowing down a shortlist to four centres it will add to its network existing main trunk services between Auckland, Wellington, Christchurch, Dunedin and Queenstown.

The latest results mean 8,000 staff who are not on other incentive programs will get payments of up to $1,400 next week.

“Essentially the national carrier in some ways has become more focused around Sydney and as a result that’s leaving opportunities for us to think about how we haul Australians across the Tasman through Auckland, a natural geographic hub, that can then get you into South America in a very effective way. We love taking on Australians so we’re excited about the competition”, he says.