THE PRESS THURSDAY, SEPTEMBER 1, 1977. Air New Zealand’s progress

Press, 1 September 1977, Page 16

THE PRESS THURSDAY, SEPTEMBER 1, 1977. Air New Zealand’s progress

Ten years ago New Zealand’s international airline earned $26 million. In its latest financial year Air New Zealand’s revenue exceeded $2OO million. Every year since 1968 the airline has increased the number of passengers it has carried: each year its profit has increased, sometimes quite substantially; and last year its net profit rose from $5.6 million to 511.7 million. The airline's shareholders, the people of New Zealand, can view these results with a good deal of satisfaction, and more especially so when many other airlines have been suffering losses. In the last year, however, the airlines have recovered and improved business: and Air New Zealand’s marked increase in profitability has reflected the general improvement

In its accounts presented yesterday, Air New Zealand showed a profit that represents a return of nearly 30 per cent on its share capital and more than 20 per cent on all funds standing to the credit of shareholders By normal business standards such returns are remarkable, but it must be noted that the airline has been able to finance a great part of its expansion from borrowed money. Even so, the return on the money that has been put into the enterprise from all sources remains healthy.

Without its own airline New Zealand would be spending much more

foreign exchange on travel and on the carriage of freight. The accountants put the airline’s net contribution to earnings of foreign exchange and to savings of overseas expenditure at nearly $lOO million for the last year. To achieve these very satisfactory results the airline has had to borrow huge sums abroad and, if business continues to expand. Air New Zealand will have to continue borrowing overseas or call on the country’s overseas exchange earnings from other sources Nevertheless, Air New Zealand is now showing that the investment can be worth while.

Small as it is, the airline enjoys some advantages over its competitors: it has acquired a remarkably loyal market among New Zealand nationals: tt can restrict its services to those from which it can be confident of obtaining good loadings: and over an important portion of its routes competition Is restricted. To its great credit, however. Air New Zealand is able to hold its own against strong competition. This has been achieved largely by the standara of service it has maintained. Evidence of how highly the airline is rated was produced this week by an American research firm. Its survey found that airline passengers in the Asian region scored Air New Zealand fifth among 69 airlines there—and most of the larger airlines were rated below Air New Zealand.