NZX hits Airnzwith $40,000 penalty

Air New Zealand must pay $40,000 for a “serious” breach of NZX rules on the disclosure of information.

The NZ Markets Disciplinary Tribunal has found the airline this year did not release market-sensitive information when it became aware of it, and made information public before informing the NZX.

In its ruling, the tribunal detailed information released about the impact of Covid-19 on the airline leading up to the afternoon of June 5, when Air NZ chief executive Greg Foran told staff, Airpoints members and some media representatives about a three-phase plan for the next 800 days.

A key facet of the “Survive” phase was Air NZ’S plan to further reduce its labour costs (in addition to reductions already announced) by about $150 million.

This release was not announced via NZX’S market announcement platform (MAP). Instead, it was released to staff, selected media and Nz-based Airpoints members between 12.46pm and 3.26pm on June 5.

Following contact by the NZX, a materially similar announcement to Foran’s message was released through the MAP at 8.30am on Monday, June 8.

After investigating, the NZX concluded that the labour cost reduction target mentioned in the message was material information, so the airline had breached its obligations by not releasing it promptly and by releasing it through means other than MAP.

The tribunal noted that the airline had provided frequent market updates relating to the impact of the pandemic.

“The breach took place in the context of unique and extraordinary pressures on the business as a result of the Covid-19 pandemic.”

The airline accepted it had breached its obligations.

The tribunal ruling said “compliance with these [continuous disclosure] rules by issuers is essential in maintaining market integrity and investor confidence.” The breaches were serious and could result in a penalty as high as $500,000.