- Air New Zealand (ASX:AIZ) issues a guidance downgrade
- The company reports the market should expect “markedly lower” performance in 2H FY24
- The announcement echoes that of Inghams which spooked investors last week despite a notably decent H1
- AIZ shares last traded at 59.8 cents
Air New Zealand (ASX:AIZ) has cautioned investors against “extrapolating [first half guidance] to the second half”.
AIZ has flagged an environment it sees as “increasingly challenging given the ongoing impact of engine maintenance requirements”, as well as risks economic, inflationary, and tied to demand.
“[The company] is seeing early signs of softness in domestic demand,” the company announced.
Increased pressure from US players, “the cumulative impact of inflation,” and “temporary cost headwinds” related to Pratt & Whitney global engine requirements are all flagged as leading turbulence AIZ now must battle.
That, and, a falling off of demand for its services in NZ.
The engine issues referred to have been on the radar since November, but, now shareholders must grapple with the fact this is going to hurt their pocket.
While 1H FY23 guidance is to remain on par with that issued back in mid-December, the company says investors won’t love what results come to them for the end of June.
With the price of jet fuel at around USD$105/bbl, per AIZ, it sees earnings before tax of up to $240 million.
No word on after-tax. The company reports on Feb 22.
Shares last traded at 59.8 cents.