Air New Zealand cuts full-year earnings guidance
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The news: Air New Zealand has cut its full year earnings guidance citing softer conditions and competitive pressures.
The numbers: The airline now expects FY24 earnings before taxation to be in the range of NZD190 million ($174 million) to NZD230 million, down from its previous guidance of NZD200 million to NZD240 million.
Air New Zealand shares last closed at $0.52 and over the past 12 months has fallen 29.76%.
The context: New Zealand’s flagship carrier said it has continued to see softening in revenue conditions over the fourth quarter both domestically and in the key North American market.
Domestic performance has been affected by subdued government and corporate demand amid challenging economic conditions and ongoing cost-of-living pressures, while North American performance continues to be impacted by very competitive pricing pressures following significant capacity addition into the New Zealand market by US carriers.
These softer revenue conditions would lower underlying profitability for FY24 by NZD40 million to NZD50 million, it said. However, this is likely to be offset by an expected significant decline in redemption of Covid-related credits, resulting Covid-related credit breakage for the second half rising from NZD20 million to NZD50 million.
The source: ASX announcement
