Shares in Air New Zealand dropped sharply yesterday after the airline revealed that it will incur a second half loss.
The news, given in a short statement to the ASX blamed high fuel prices and the earthquakes in Christchurch and Japan.
The shares plunged 13%, or 11.5c, to 76.5c.
Air New Zealand said that as recently as three weeks ago, it believed it would be profitable.
The airline pointed out that it did indicate at its interim results announcement on February 24 that there were risks around fuel and the second Christchurch quake two days earlier.
"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.
"Based on current fuel prices and demand trends the company does not expect to be profitable in the second half year and full year normalised earnings are expected to fall below $100m," the airline said.
The earnings downgrade came five days after the airline lifted fares to offset the rising fuel prices which it said were adding $10 million a month to its operating costs.
The kiwi carrier boosted domestic and long-haul fares by an average of 7% and those to Australia and the Pacific Islands by 8%.
Qantas shares fell 5%, or 11c, to $2.12 and Virgin Blue shares were off 1.5c, or 4.3%, at 33c.
The impact of the nuclear crisis in Japan added to the selling pressure.
Qantas and Virgin Blue have yet to update the market as to any impact of the problems in Japan.
And Westpac said yesterday that its New Zealand subsidiary could see credit losses of between $NZ30 million and $NZ100 million ($22.2 million to $73.9 million) resulting from last month’s earthquake in Christchurch, New Zealand’s second biggest city.
Westpac said bad debt provisions can be absorbed by the unit’s expected profit and as such Westpac New Zealand Ltd’s tier I capital will not be impacted.
Westpac’s shares fell 1.2% to $22.59.
