FuelClub Discount

The airline, 75 per cent-owned by the Government, yesterday reported an annual net profit of $218 million, off 1 per cent on the 2007 year. Trading turnover rose 9.1 per cent to $4.667b.

A final 3.5c dividend increases the annual rate from 8c to 8.5c a share, excluding 2007’s special 10c dividend. The gross dividend yield of 12.686c gives a yield of 10.6 per cent, based on yesterday’s closing share price of 120, down 2c.

Chief executive Rob Fyfe said the volatility in fuel prices and uncertain economic conditions had made it difficult to accurately forecast a profit for next year. But the average cost of jet fuel would need to be below $US140 a barrel for the 2009 financial year for the airline to be profitable, he said.

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Air New Zealand is looking to save more than $100 million in fuel costs a year as it puts smaller planes on services to London.

Surging oil prices are causing airlines around the world to brace for slower growth, tighter earnings and deeper cost cutting.

Last week Air France KLM warned it would have to expect a 1.1 billion euro ($NZ2.25 billion) rise in fuel costs, squeezing profits this year and forcing it to find 150 million euros in savings.
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