IAG Sees Profit Rise

No, £94 is the end of year annual profit. The financial year is different in NZ. Yes, the majority of the profit comes from long haul. But there is also a lot of competition from other internation carriers bringing in people / taking them away. Plus, there are also LCCs competing with ANZ (such as Jetstar) which they have to compete with.

But I do agree it must be tough for ‘legacy’ carries in Europe. Great for passengers though, who can shop around for cheaper fares.

Air New Zealand – £94 million

In fact the figures are likely to be higher than that (I believe £94 million’s for the first half of the year, where as the figures I gave were for the first 3/4). New Zealand benefits from the fact it’s a Pacific island so is predominantly a long haul airline, that’s where the majority of the profit is made by the full service carriers these days.

And with regard to AF/KLM, their biggest problem (mainly lying with AF) is they’re trying to compete with the LCCs (namely easyJet) and failing miserably. For example, when easyJet announced it’s new Nice and Toulouse bases in 2012 – less then 2 weeks later, Air France had announced it shall also open bases at the airports, perhaps in an attempt to retain its share of the French market. However, AF simply can’t compete on fares on like-for-like routes with easyJet (especially given these markets are predominantly tourist rich) and is as a result losing literally millions. Well that’s my take anyway, they’re putting too much into trying to grow their regional market and not enough into their core market in Paris.

Air New Zealand – £94 million

So what is Air France/KLM doing so wrong that causes them to make huge losses when the majority of other global carriers are making a tidy profit?