Virus chaos hits Air NZ

Carrier withdraws earnings outlook amid crisis

AIR New Zealand has withdrawn full-year guidance it downgraded just two weeks ago amid mounting disruption from the global coronavirus outbreak.

The carrier’s chief executive has also taken a pay cut as it braces for a greater-than-expected hit from virus-related closures and travel bans that are hurting the wider aviation industry.

Air NZ in February predicted the COVID-19 hit to FY20 earnings would be in the range of $NZ35 million ($A34 million) to $NZ75 million ($A72

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“And with the situation evolving at such a rapid pace, the airline is not in a position to provide an earnings outlook to the market at this time,” Air New Zealand said in a release.

The company has already cut flights to Hong Kong, suspended Shanghai services until March, and Seoul flights from March to June.

Total capacity into Asia has been slashed by 26 per cent, and total overall network capacity cut by about 10 per cent since the outbreak COVID-19 started.

Aussie competitor Qantas on Friday announced it would cut more international flights as it also grapples with falling demand.

Qantas’ latest cuts to destinations including Tokyo, Sapporo, Osaka, Hong Kong and Auckland are on top of its grounding the equivalent of 18 planes as it cut international and domestic capacity last month. of

Air NZ yesterday also announced chief executive Greg Foran has voluntarily offered to reduce his base pay of $NZ1.65 million by approximately 15 per cent, or $NZ250,000, with the support of the board.

Air NZ’s executive team will also extend their salary freeze that has been in place since May 2019.

First half profit fell by 33 per cent to $NZ101 million last month. The carrier’s ASX-listed share price has plunged in 2020 and at close of trading yesterday was at $1.88.