Ups and downs over air route

MATT O'SULLIVAN
Last updated 05:00 29/01/2013

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Virgin Australia insists the performance of its trans-Tasman flying operations has improved, despite regulatory filings revealing its losses widened slightly last financial year.

Accounts lodged with regulators show that Virgin's New Zealand subsidiary posted a NZ$7.7 million loss for the year to June, compared with a NZ$7.4m loss previously.

Virgin said the underlying performance of the New Zealand business - which operates most of the group's trans-Tasman flights - had improved last financial year, highlighting a reduction in pre-tax losses despite the Christchurch earthquake still weighing on demand.

The full-year result reflected new commercial arrangements put in place last March when it restructured its entire international operations, the airline said.

The rejig resulted in all of the company's planes and staff being housed under the listed Virgin Australia Holdings, which charges full commercial rates to subsidiaries for services.

Qantas' New Zealand subsidiary Jetconnect reported a NZ$10.6m profit for the year to June, compared with a NZ$11.3m profit a year earlier.

However, Qantas said the result did not represent the true health of the subsidiary, which crews and operates Qantas-branded aircraft on trans-Tasman flights on behalf of the parent.

"It does not sell tickets or carry out any other commercial functions on behalf of Qantas, so its financial results do not reflect the overall performance of Qantas' trans-Tasman services," a spokesman said.

"Jetconnect's accounts reflect the costs it charges back to the Qantas Group, plus an operating margin."

Qantas would not reveal Jetconnect's financial performance.

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