Air New Zealand on Monday withdrew its full-year 2020 earnings outlook due to increased uncertainty over the duration and scale of the coronavirus outbreak, and cut back its total capacity on flights to Asia by 26 per cent through June.
New Zealand's flag carrier cut its total overall network capacity by about 10 per cent, and capacity on flights to Australia by 7 per cent.
Air New Zealand has cut capacity on flights to Australia by 7 per cent.Credit:AP
Last week, the airline had already cut flights, including a 4 per cent reduction in capacity to and from Australia and a 2 per cent reduction in domestic capacity through June.
"The airline now believes that the financial impact is 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 …," it said in a statement.
The carrier said it has a further decline in bookings over the last week, driven by the further spread of COVID-19 to countries outside of China, including New Zealand itself.
Air NZ chief Greg Foran has voluntarily taken a 15 per cent pay cut as the financial impact of the coronavirus worsens.Credit:AP
CEO Greg Foran has offered to reduce his base pay by about 15 per cent, while the company's executive team will extend a freeze on its salaries that has been in place since May 2019, the airline said.
There will also be freeze on hiring for all non-critical roles, and an offer of voluntary unpaid leave for operational staff.
According to a preliminary estimate from an industry body released last month, airlines in the Asia-Pacific region stand to lose $US27.8 billion ($42 billion) of revenue this year due to a drop in demand as a result of the coronavirus.
Reuters
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