Air New Zealand looking to explore routes to India – CEO Greg Foran

Air New Zealand chief executive Greg Foran said the airline hopes to add more routes to India once it gets through the tough economic “headwinds” currently plaguing the airline.

The national carrier has found that many passengers travel to Singapore first and then fly to India on other airlines, so it wants to open more routes wherever possible.

On Thursday, the national airline The company made underlying profit of $222 million in the year to June ——It has dropped by more than half.

The company’s net profit for the fiscal year was $146 million, down 65% from $412 million in the same period last year.

Although the results were expected in April, Full-year profit forecast lowered – The airline does not expect a significant rise in profits any time soon.

Greg Foran, Air New Zealand CEO Checkpoints It is facing “some resistance”.

“We just Last year’s results were very, very good. – $585 million – This is due to “Revenge travel” after the epidemic This year, especially in the second half of the year, we have some headwinds that we need to deal with.”

The first factor is New Zealand’s economic downturnHe said government spending on domestic tourism was most affected.

“Government spending is down 28 per cent – ​​this is no surprise to anyone – it normally accounts for around a fifth of our domestic business.

“Profits of large companies and small and medium-sized enterprises have also fallen by 10% to 12%.”

Renewing the fleet and engine availability is the second challenge, he said.

“It’s just one of those things – you make a decision… 20 years ago with the Rolls-Royce Trent engines, we had some challenges (on the supply side).

“Today, all four of my Dreamliners had engine problems. We cannot get engines from Rolls-Royce at the momentI own six Airbuses and we are also waiting for Pratt & Whitney engines.”

The third factor, he said, is fierce competition in the U.S. market.

Traffic between China and the US is only 25% of what it was, which means they have extra aircraft, which has an impact on US airlines flying to New Zealand.

“We are still flying and we have passengers on the planes, but we are not able to generate the revenue from certain routes that we were previously on.”

Foran said the airline expected similar conditions over the next six months, but profits would recover thereafter.

So which routes are making money?

Mr Foran said traffic was “up across the board” with New Zealand passengers flying into major US hubs such as Dallas, San Francisco and Los Angeles.

He said they and United are both members of the Star Alliance, but that prevents them from doing deals with Delta and American.

“All administrations rightly want this to be competitive … so you can cut in one area, but you can’t do it everywhere.”

Air New Zealand ‘very interested’ in India

Foran said the airline is “very interested” in opening new routes to India in the future.

“Right now, we have a lot of passengers who are travelling there on Singapore flights and then … they split off and fly to any city in India.”

Another option, he said, was to “return to Europe.”

However, he said any expansion talks would be meaningless until the engine supply issue was resolved.

They also expect to see Boeing launch “several” new aircraft by the end of 2025.

“Once it’s signed, I can start selling with confidence.”

He said the airline has no plans to cut its troubled U.S. routes for now.

“It’s a fairly cyclical industry; there are tailwinds and headwinds, and the U.S. is a great market for us.

“I think it makes perfect sense that we chose the United States, and I’m very happy with New York.”

When it comes to the issue of high ticket prices, Foran said the average ticket price is down from a year ago.

“It’s surprising, isn’t it? People say, ‘Oh my god, I’m paying too much… But the average is the average – it reflects whether you’re flying a domestic jet or a small turboprop.'”

Questioner Checkpoints Asked if he would succumb to pressure to reduce fares during the school holidays, Foran blamed it on demand and supply.

“It’s a bit like fresh strawberries – if there’s a shortage of supply, you might pay more for the product.”

Air New Zealand recently 2030 climate target cancelledIt also said the resources needed to meet those goals were unaffordable and unavailable.

Foran said at the time that supply chain issues and expenses could slow the addition of new, more fuel-efficient aircraft to the fleet.

He told reporters that the target was still under review. Checkpoints.

“We have to go back and reassess this. Our commitment to this is as strong as ever, if not stronger, (but) it’s a very wise governance decision.”