Air New Zealand said on Tuesday it will lose money in the second half because of high fuel prices and the impact of earthquakes in New Zealand and Japan, sending its shares plummeting more than 8 percent.
It had warned last month when it reported its first result that fuel prices and the Christchurch earthquake were risks to its expected profit.
"The financial impact of the Christchurch earthquake is more severe than expected then. Further, the recent tragic events in Japan will also impact revenue in that important market," the airline said.
It said it expected full-year normalised earnings to fall below NZ$100 million (US$74 million). That compares with a normalised net profit of NZ$90 million for the previous year. Analysts have forecasts full-year earnings of around NZ$151 million.
Air New Zealand shares, around 73 percent owned by the government, fell 10 cents or 8.4 percent to NZ$1.09, a seven-and-a-half month low.
Last week it said it was raising its fares on all routes by 7 to 8 percent to cover the higher cost of fuel, which was adding nearly US$10 million a month to its operating costs.
The carrier has recently taken a 15 percent stake in Australian carrier Virgin Blue, with whom it is setting up a commercial alliance, to combat aggressive competition from Australian carrier Qantas and its low cost offshoot Jetstar on routes between the two countries.
It has also set up code sharing deals with Virgin Atlantic and Etihad.
It had warned last month when it reported its first result that fuel prices and the Christchurch earthquake were risks to its expected profit.
"The financial impact of the Christchurch earthquake is more severe than expected then. Further, the recent tragic events in Japan will also impact revenue in that important market," the airline said.
It said it expected full-year normalised earnings to fall below NZ$100 million (US$74 million). That compares with a normalised net profit of NZ$90 million for the previous year. Analysts have forecasts full-year earnings of around NZ$151 million.
Air New Zealand shares, around 73 percent owned by the government, fell 10 cents or 8.4 percent to NZ$1.09, a seven-and-a-half month low.
Last week it said it was raising its fares on all routes by 7 to 8 percent to cover the higher cost of fuel, which was adding nearly US$10 million a month to its operating costs.
The carrier has recently taken a 15 percent stake in Australian carrier Virgin Blue, with whom it is setting up a commercial alliance, to combat aggressive competition from Australian carrier Qantas and its low cost offshoot Jetstar on routes between the two countries.
It has also set up code sharing deals with Virgin Atlantic and Etihad.
