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Air New Zealand scraps earnings outlook as virus impact mounts
[WELLINGTON] Air New Zealand scrapped its annual earnings outlook Monday, saying the impact of new coronavirus since the most recent figures were issued just two weeks ago had been worse than expected.
The flag carrier warned on February 24 that annual pre-tax earnings could drop up to NZ$150 million (S$130.7 million) as it slashes flights due to falling demand caused by the virus.
It said on Monday there had been "additional softness in demand" with the virus continuing to spread outside China, where it originated.
"The airline now believes that the financial impact is likely to be more significant than previously estimated 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 market update.
"An update on earnings expectations will be provided when appropriate."
Chief executive Greg Foran said the virus had created an unprecedented situation and it was difficult to predict future demand patterns.
The airline said flights into Asia were down 26 per cent and services across its overall network had been cut by 10 percent.
It said Mr Foran had offered to reduce his base salary of NZ$1.65 million by 15 per cent and the airline's executive team was extending an existing pay freeze.
The airline had also implemented a hiring freeze on non-critical roles, as well as giving operations staff the option to take unpaid leave.