Air New Zealand shares have slumped after the airline warned of a downturn in demand in the wake of the Christchurch earthquake and the Japanese tsunami.
The airline said it expected to lose money in the second half of the financial year to June 30, and that full year earnings were expected to be below expectations.
On February 24, when Air New Zealand reported a bottom line profit of NZ$96m for the six months to December 21, it predicted that despite the Christchurch earthquake and rising fuel costs it would make a profit in the second half of the year.
But Air New Zealand said in a short statement to the New Zealand stock exchange: “The financial impact of the Christchurch earthquake is more severe than expected. Further, the recent tragic events in Japan will also impact revenue in that important market.
“Based on current fuel prices and demand trends the company does not expect to be profitable in the second half year and full year normalised earnings are expected to fall below NZ$100m.”
By TravelMole Asia
