Air NZ outlook worsens

By DANIEL RIORDAN aviation writer

Analysts have further downgraded their forecasts of Air New Zealand's result for the June year after reports from Australia suggesting that troubled subsidiary Ansett would lose close to $A400 million ($500 million), sending its parent to an operating loss of around $300 million.

A round of downgrades a few weeks ago had the airline steering analysts towards operating losses for the group of around $200 million.

JBWere aviation analyst Peter Sigley said he now expected Air NZ to record a pre-tax, before abnormals loss of almost $300 million, and said lower yields from Ansett were behind the latest downgrades.

Air New Zealand spokesman Mark Champion described reports of profit downgrades as obviously speculative, and said the airline had no comment.

ABN Amro analyst Malcolm Davie would not share his forecast, but said the downgrades were not a surprise. He said the strategic issues facing the group were more important than this year's profit.

Centre for Asian Pacific Aviation managing director Peter Harbison agreed.

"A hundred million dollars here or there is not going to change the fact that if this deal isn't done, Air New Zealand is in big trouble. It just intensifies the heat."

That deal - a proposal from Qantas Airways that the company's two main shareholders, Brierley Investments and Singapore Airlines, sell their interests to the Australian carrier - is being considered by Air NZ's independent directors, alongside other ownership options.

Air New Zealand acting chairman Jim Farmer said the company's independent directors would meet Qantas representatives again this week, and would also meet representatives of Singapore Airlines.

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