13 Mar 2020

Coronavirus: Auckland Airport slashes earnings forecast by up to $50m

10:21 am on 13 March 2020

Auckland Airport has lowered its earnings forecast by as much as $50 million because of the expected impact of the Covid-19 virus on its business.

Auckland Airport

Photo: 123RF

The company now expects full year underlying earnings between $210m and $235m.

It's previous forecast was between $260m and $270m.

Chief executive Adrian Littlewood said passenger numbers for the 10 days of this month fell sharply compared to last year and he expected further decreases in the next few months.

Trading in the company's shares was halted yesterday afternoon as it revised its financial forecasts.

The share price has fallen 16 percent over the past three weeks.

Yesterday the US suspended all travel from Europe to the United States for the next 30 days because of the Covid-19 coronavirus. The travel order which starts at midnight on Friday (US time) applies to 26 European countries but excludes Britain.

Littlewood said the situation was dynamic and changing with marked falls in the number of flights and passengers.

"We've seen an immediate impact on business travel, and we are now anticipating a rapid downturn in leisure travel in the coming months, as cancellations flow through and demandfor bookings continues to soften."

Littlewood said passenger numbers in February were down 8.6 percent on the year before, and in the first 10 days of this month were down 18 percent.

"The new earnings guidance reflects today's updated view on passenger numbers and our decision to introduce a range of support measures for specific airport partners for the remainder of the 2020 financial year."

The country's international airports and airlines agreed this week to relax rules to allow flights to be reduced without losing their slots or allocated times to fly in and out of airports.

Tourism Holdings scraps forecast

Meanwhile, campervan rental company Tourism Holdings has scrapped its previous forecast for a full year profit of about $24m.

"While we believe that this [profit] remains a possibility, there are too many uncertainties for this to remain as Tourism Holdings' guidance. As a result we do not expect to provide financial guidance for the remainder of the 2020 financial year," the company said.

However, it said it had strong finances, low debt levels, significant unused credit, and high quality assets.