Air NZ shares plunge on Japan, NZ. disaster profit warning

March 15, 2011 | 08:53

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Air New Zealand warned Tuesday the Christchurch and Japanese disasters had dashed its second-half profit prospects, sending shares in the airline plummeting almost eight per cent.

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The company said it was already facing difficulties after last month's Christchurch earthquake, which had been compounded by the unfolding Japanese tragedy.

"The financial impact of the Christchurch earthquake is more severe than expected," it said in a statement.

"Further, the recent tragic events in Japan will also impact revenue in that important market."

The airline said based on current fuel prices and demand trends, it "does not expect to be profitable in the second half year and full-year normalised earnings are expected to fall below NZ$100 million ($74 million US)."

Shares in the New Zealand flag carrier dipped 7.6 per cent to NZ$1.10 after the announcement, in an overall market down 0.04 per cent.

Air New Zealand, which is 76.5 per cent state owned, announced a 75 per cent jump in interim net profit of NZ$98 million for the six months to December on February 24.

At the time, it forecast a profitable second half, subject to volatile aviation fuel prices.

The airline lifted air fares last month to cover the rising cost of jet fuel and has announced plans to increase ticket prices again from Friday for the same reason.

AFP

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