Air New Zealand falls after earnings outlook cut on stiff competition
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 22 2024
0mins
Source: Yahoo Finance
- Air New Zealand Trims Annual Earnings Estimates:
- Cites economic headwinds and cost-of-living crisis affecting revenue in domestic and North American markets.
- Shares hit a near two-year low, slipping 3.5% to NZ$0.550.
- Expects earnings before taxation between NZ$190 million and NZ$230 million for 2024, down from the previous estimate.
- Challenges in North American Market:
- Competitive pricing pressures impacting North American performance due to added capacity by U.S. carriers.
- Struggling with stiff competition on pricing terms from U.S. peers.
- Financial Impact:
- Forecasted lower earnings for 2024 and flagged high engine maintenance costs.
- Earnings to take a hit of NZ$95 million in COVID-related credit breakage for this financial year.
- Analyst's Perspective:
- Analysts foresee ongoing challenges for Air New Zealand due to small domestic market and thin margins.
- Geographic challenge in international competition remains a constant hurdle for the airline.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
