Analysts are upbeat about Air New Zealand's six-month result due tomorrow, saying improving yield, loading and capacity should all contribute to higher earnings.
Sharebroker Forsyth Barr is forecasting group earnings before interest and tax in the six months to December 31, to be 48% higher at $138 million, compared to the same period a year earlier.
The reported profit is expected to be $29 million higher at $85 million with the company paying an interim dividend of four cents a share, up 1c a share.
Revenue was forecast to be 9% higher with depreciation and rental costs lower than the previous corresponding period, due to a stronger New Zealand dollar.
The biggest increase in costs was expected to be fuel, which Forsyth Barr is forecasting to be 19% higher at $522 million.
Air New Zealand is expected to outline a positive medium-term outlook on the back of new aircraft, benefits from the Rugby World Cup and its strategic alliance with Virgin Blue, which will also boost passenger numbers on domestic routes.
While revenue is increasing, Forsyth Barr warns higher fuel costs would come from increasing capacity on its long-haul routes in the second half of the year and on its main domestic services between Auckland, Wellington and Christchurch.
''We believe earnings in the second half of 2011 will be lower than reported in the first half of 2011, but are set for a substantial increase for full-year 2012 boosted by the increase in passengers travelling to the 2011 Rugby World Cup and the benefits that should flow from the Virgin Blue strategic alliance on the Transtasman.''
