Air New Zealand slashes more flights to Australia, CEO takes pay cut as coronavirus bites

Air New Zealand

Air New Zealand has withdrawn full-year guidance it downgraded just two weeks ago amid mounting disruption from the global coronavirus outbreak.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

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Air NZ in February predicted the COVID-19 hit to FY20 earnings would be in the range of NZ$35 million (AUD$34 million) to N$Z75 million (AUD$72 million) due to lower demand and capacity cuts.
 
The company on Monday said financial impact is now 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 release.
 
The company has already cut flights to Hong Kong, suspended Shanghai services until March, and Seoul flights from March to June.
 
Twenty-one people aboard a cruise ship that was barred from docking in San Francisco have tested positive for coronavirus, U.S. officials said on Friday, adding to the more than 100,000 cases of the fast-spreading illness across the world.
 
Total capacity into Asia has been slashed by 26 per cent, and total overall network capacity cut by approximately 10 per cent since the outbreak of COVID-19 started. New Zealand's flag carrier cut capacity on flights to Australia by 7 per cent.
 
Qantas on Friday announced it would cut more international flights as it too 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.
 
Air NZ on Monday also announced chief executive Greg Foran has voluntarily offered to reduce his base pay ofNZ$1.65 million (US$1.04 million) by approximately 15 per cent, or NZ$250,000(US$158,000), 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 NZ$101 million (US$64 million) last month.
 
The carrier's ASX-listed share price has plunged more than 30 per cent so far in 2020. Air New Zealand shares slid 5 per cent on Monday to end the session at $1.88(US$1.19) against a broader market plunge of 7.3 per cent.
SOURCE: AAP/PACNEWS

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