Air New Zealand flags improvement after competition clips profit

Air NZ cautiously flagged an earnings improvement in the current year as it posted a 21% drop in core annual profit on Wednesday, citing fierce competition. The carrier "faced an unprecedented increase in the level of competition from some of the world's largest airlines," CE Christopher Luxon said. Even so, strong inbound tourism helped Air NZ post its second-highest ever profit of NZ$527m (US$383m) in the year ended June 30, down from last year's record NZ$663m but in line with market expectations. "Looking forward to the year ahead, the airline is optimistic about the overall market dynamics," New Zealand's biggest airline said in a statement to the New Zealand Stock Exchange. The airline said it planned to spend about NZ$1.5b on aircraft and associated assets over the next four years as it battles rivals like Qatar Airways and American Airlines. Air NZ has six aircraft due for delivery this financial year and another 16 in the next financial year. The anticipated improvement in earnings this year was contingent on an average jet fuel price of $60 a barrel - the average over the past two months - which would equate to a full-year fuel cost of NZ$880m.<br/>