Air New Zealand Limited [NZX:AIR] has seen its share value slide by 3.64%. This happened when markets opened to a sour mood.
Air New Zealand — established in 1940 — is the country’s beloved national airline, operating flights to domestic and global destinations. It has a strong presence on the New Zealand Stock Exchange, as well as the Australian Securities Exchange.
The company’s share price is currently $1.985, and it has a market capitalisation of $2.228 billion.
Why has the [NZX:AIR] share price plunged today?
The economic impact of the coronavirus continues to bite.
Today, Air New Zealand announced that it expects continued disruption in the tourism and travel industries.
Here are the key highlights:
- CEO Greg Foran has voluntarily offered to take a 15% pay cut. This shaves $250,000 off his original base salary of $1.65 million.
- The rest of the executive team at the company will also endure salary freezes.
- Question marks remain. How long will the outbreak last? What will the final toll look like? No one can say for sure. Foran calls this ‘an unprecedented situation and it is difficult to predict future demand patterns.’
- Air New Zealand’s full-year earnings forecast has been withdrawn following the stormy outlook.
Falling passenger numbers, cancelled flight routes, and a prolonged climate of fear have reinforced a negative sentiment. A bearish mood prevails among investors.
Where could [NZX:AIR] go from here?
It was originally predicted that Air New Zealand would suffer financial losses of $35 million to $75 million. But the damage could well be greater.
For the short- to medium-term, the outlook is negative.
Regards,
John Ling,
Contributor, WealthMorning.com