Air New Zealand has withdrawn the full-year earnings guidance it issued just two weeks ago, as the coronavirus crisis causes global aviation stocks to plummet.
The airline also said on Monday it is cutting total capacity to Asia by 26 per cent through to June and its overall network capacity by 10 per cent. Chief executive Greg Foran will take a 15 per cent pay cut.
“We have been continuously monitoring bookings and in recent days have seen a further decline which coincides with media coverage of the spread of COVID-19 to most countries on our network as well as here in New Zealand,” said Foran.
“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. An update on earnings expectations will be provided when appropriate.”
Air NZ has commenced capacity reductions to its network, which include extending the suspension of its Shanghai service through to the end of April, and additional consolidation of services across the Tasman, Pacific islands and domestic network in March and April.
Foran has also voluntarily offered to reduce his base pay of NZ$1.65 million by 15 per cent. On top of this, the airline has implemented a hiring freeze for all roles that are non-critical and will offer operational staff the option to take unpaid leave in addition to managing annual leave balances.
“Air New Zealand is a strong and resilient business operated by a world-class team with deep experience having navigated prior shocks to our business and industry. While we have already made swift adjustments to our operations, we are prepared to take further actions to address the ongoing demand impact of COVID-19,” said Foran.
Last month, first-half profit fell 33 per cent to NZ$101 million.
The carrier’s ASX-listed share price has plunged 30 per cent so far in 2020 to a near three-year low of $1.99.