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Air New Zealand axes 2020 outlook

Air New Zealand ATR 72-600, © ATR

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AUCKLAND - Air New Zealand on Monday cut its full-year outlook, as the impact from the coronavirus and subsequent capacity reductions appear set to outweigh benefits from lower jet fuel prices.

Air NZ said it expected earnings before other significant items and taxation to be between NZ$300 million ($190.2 million) and NZ$350 million for the year, down from the previous range of NZ$350 million to NZ$450 million it had forecast.

New Zealand's flagship carrier has already cut flights across Asian routes, mostly to Shanghai and Hong Kong, to cope with lower demand amid travel restrictions in the region stemming from the outbreak.

Air NZ further announced that it would cut capacity to Asia by 17% between February through June, while services to Seoul would be temporarily suspended from March 7 until end-June.

The airline said the negative impact to earnings from the coronavirus itself was expected to be in the range of NZ$35 million to NZ$75 million. The earnings forecast was calculated using the midpoint of this range.

The airline is set to report its 2020 half-year results on Feb. 27.
© Reuters, | 24.02.2020 07:47

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