Air New Zealand soars on strong earnings outlook

Air New Zealand shares rose more than five percent after the airline predicted its annual earnings will more than double in the 2012-2013 financial year. The flag carrier said in a market update that passenger numbers in March rose 5.2 percent on the same period last year and demand was up 8.2 percent on its domestic routes and 9.3 percent on routes to North America and Britain. "Based on current market conditions and the trading environment, Air New Zealand expects FY13 normalised earnings before taxation to be in the range of NZ$235-260 million (US$198-220 million)," it said. The airline, which is 74 percent state-owned, posted normalised earnings of NZ$91 million in the 2011-2012 financial year. Normalised earnings strip out the airline's exposure to hedging against fuel and foreign exchange volatility. Air New Zealand's net profit was NZ$71 million in 2011-12. It racked up a NZ$100 million interim net profit in the six months to December as the benefits of a restructure which included shedding more than 500 jobs kicked in. Shares in the airline rose 5.2 percent to NZ$1.515 after the announcement.