More bad news for Air NZ - Ansett trading at loss

Monday 6th November 2000

Hot on the heels of a profit warning by Air New Zealand, an Australian newspaper has reported that Ansett Australia is currently trading at a loss.

In a story published this morning, The Sydney Morning Herald said Ansett, which is owned by Air New Zealand, has been hit by the collapse of the Australian dollar, rising fuel prices and lease payments for aircraft.

The SMH also reported that staff morale at the airline has sunk and that the airline's domestic market share has plummeted to 41.5 per cent after increased competition from Qantas, Impulse Airlines and Virgin Blue.

Last week at Air New Zealand's AGM, the company advised investors that if the current level of fuel prices was sustained, then fuel costs would be more than US$100 million over budget for the year.

The market reacted swiftly to the news with the share price falling dramatically. It was also unclear just how many people had taken up Air New Zealand's rights issue which closed on Friday, but the general feeling in the market was that the issue would be undersubscribed.

An Air New Zealand spokesman would not make a comment on the SMH article.

Air New Zealand shares were up on Monday morning, trading around $1.55 for the "A" shares, and $2.00 for the "B" shares.

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