TODAY |

Air New Zealand braces for up to $75 million drop in earnings due to coronavirus

Air New Zealand has said today that it expects to suffer a drop in earnings in the 2020 financial year of between $35 million and $75 million due to coronavirus.

A file image of Air New Zealand aircraft on the tarmac at Auckland Airport. Source: Luke Appleby/1 News

The airline said in a statement that the loss in revenue was likely to come from decreased demand for travel to and from Asian destinations.

A drop in the price of jet fuel would "partially" mitigate the soft demand, "however overall earnings for the 2020 financial year will be adversely impacted".

With a mid-point of $55 million - halfway between the upper and lower estimated drop in earnings - Air New Zealand is now expecting to earn between $300 million and $350 million.

The company's revenue in the 2019 financial year was $374 million.

Your playlist will load after this ad

Restrictions have been in place since early this month as a precautionary measure over the outbreak. Source: Breakfast

Chief executive Greg Foran said the environment was challenging, but that the airline is "well positioned to deliver the best result under these conditions".

"Air New Zealand is a resilient business and we have demonstrated the ability time and again to respond quickly to changing market conditions," Mr Foran said.

"We have a highly capable and experienced senior leadership team who have dealt with challenges such as this before and I am confident that we will effectively navigate our way through this."

Air New Zealand also announced that it will be suspending services to Seoul in South Korea until the end of June.