15 Mar 2011

Air NZ warns of lower profit

10:38 pm on 15 March 2011

Surging oil prices and impact of devastating earthquakes in Christchurch and Japan have prompted Air Zealand to issue a profit warning.

The national carrier is forecasting its underlying profit will fall below $100 million for the year to June, compared with analysts' expectations of a $151 million profit.

Last week the airline said it was raising its fares by about 7.5% on all routes, to cover the higher cost of fuel.

That won't be enough to stop Air New Zealand losing money into the second half of its financial year.

The situation has been exacerbated by the earthquake in Christchurch and the quake and tsunami in Japan, the airline says.

Air New Zealand shares fell more than 10%, or 13 cents, to $1.06 each.