AIR NZ CREDIT RATING DOWNGRADED AFTER QUAKES

Dino D'Amore
By Dino D'Amore March 21, 2011 14:49

AIR NZ CREDIT RATING DOWNGRADED AFTER QUAKES

Air New Zealand’s credit rating outlook was lowered to ‘negative’ from ‘stable’ because of the Christchurch and Japanese earthquakes and escalating jet fuel prices. Moody’s affirmed Air New Zealand’s “Baa3” senior unsecured rating. The change “reflects the heightened operating uncertainty and incremental effects of recent earthquake events in Christchurch, New Zealand as well as Japan, on top of the already escalating price of jet fuel in recent months and which recently climbed in excess of US$130 a barrel,” said Ian Lewis, a Moody’s vice-president and senior credit officer.

Last week, Air New Zealand issued a profit warning for the same reasons. The airline doesn’t expect to be profitable in the six months ending June and full-year normalised net profit is expected to fall below $100 million. Air New Zealand’s normalised first-half net profit was $96 million.

Air New Zealand’s shares are trading at $1.13, up one cent from Friday. They fell from $1.19 before the profit warning to as low as $1.06 and have been trending lower since hitting $1.54 in early January.

Dino D'Amore
By Dino D'Amore March 21, 2011 14:49
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