By DANIEL RIORDAN and AGENCIES
Air New Zealand shares gained a little ground yesterday, as the airline's global peers were savaged in the wake of last week's terrorist attacks in the United States.
The company's A shares rose 4c to 35c and its B shares rose the same amount to 34c,
as investors took pause after selling triggered by unsourced talk of receivership on Monday.
Acting chairman Dr Jim Farmer said yesterday that he was confident Air New Zealand could fly profitably, despite the present upheavals in world aviation markets.
Although it was too early to estimate the extent of the fallout, he said the situation was not totally new, citing the 1991 Gulf War, which affected Air New Zealand's operations far less than many others, including Qantas.
Airlines worldwide were already facing a difficult future before last week's events, because of the worsening economic climate.
US airlines have called for $US24 billion ($58.6 billion) in Government aid as airlines around the world struggle to survive the fallout from last week's events.
The International Air Transport Association estimated that the immediate impact on US airlines' revenues from cancelled flights was $10 billion.
Passengers have been scared away, airlines and airports face higher costs to comply with security measures, the global economy is under greater pressure and so are fuel costs.
US airline stocks fell between 25 and 65 per cent as US stock exchanges reopened yesterday for the first time since last week's attacks.
The top six airlines lost $6.6 billion of market capitalisation.
The US industry umbrella group, the Air Transport Association (ATA), has predicted that US domestic air traffic will drop anywhere from 25 per cent to 60 per cent over the next few months.
It's not just airlines feeling the pinch. Airport companies are also losing favour with investors.
Auckland International Airport shares closed 2c higher at $2.98, down 75c on a week ago. And one of three bidders for Sydney Airport - an international consortium called the Connect Consortium - said yesterday that it would not submit a definitive bid for the sale, estimated to fetch around $A4 billion ($4.8 billion).
Continental Airlines has warned of a potential bankruptcy filing in late October if it doesn't receive financial assistance. It is already cutting 12,000 jobs, or 21 per cent of its workforce.
Job cuts announced worldwide are already nearing 30,000 and the ATA said total losses could exceed 100,000 over the next few months.
Asian airlines are also trimming staff and routes amid profit and credit rating downgrades.
Virgin Atlantic became the first European airline to announce job losses when it said it would cut 1200 jobs, ground five aircraft and scrap a fifth of its transatlantic flights.
Qantas shares rose 5c to $A2.91, yesterday, which is 9c lower than they were a week ago.
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By DANIEL RIORDAN and AGENCIES
Air New Zealand shares gained a little ground yesterday, as the airline's global peers were savaged in the wake of last week's terrorist attacks in the United States.
The company's A shares rose 4c to 35c and its B shares rose the same amount to 34c,
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