Auckland Airport's signalling that it will be undertaking another round of unspecified numbers of job cuts, and it estimates abnormal losses in the just-finished financial year may total in excess of $225 million.
The company told the NZX in a statement on Wednesday that although it had already reduced its workforce by 25%, including releasing 90 contractors who were largely connected to its now deferred capital projects programme, it was now proposing to further reduce staffing levels, "mainly impacting the company’s infrastructure team and its operations team, while protecting the ongoing safety and security of the airfield".
The statement didn't specify numbers or timing for the job cuts.
It did go into specifics about some abnormal financial losses it is estimating for the June 2020 financial year just finished. It has put these losses in a range totalling between $206.5 million and $226.5 million. This includes actual cash losses and 'non-cash' writedowns.
To some extent these losses will be counter balanced by non-cash revaluation gains of its property of between $130 million and $150 million. The company hasn't explained as such why the property assets have been revalued upwards by so much when the revenues of the business have plummeted and large portions of the assets are severely under-utilised.
This is the breakdown provided by the company (figures in $ millions):
Earlier this year in response to the devastation of its traffic, the airport company suspended about $2 billion worth of new projects and then went to shareholders, successfully raising a whopping $1.2 billion and basically getting its finances in order till the end of calendar year 2021.
Auckland Airport chief executive Adrian Littlewood said in the Wednesday statement that these are "extraordinarily challenging times" for everybody in the New Zealand tourism industry.
International passenger numbers now averaging 800 per day at Auckland Airport, less than 5% of what they were six months ago.
"Airlines have been deeply impacted and the number of carriers operating here has fallen from 29 to 11. Daily flight numbers have also reduced, falling by 80% to 100 per day made up of domestic, cargo and repatriation services.
"We are a resilient business, but this is a global shock to aviation the likes of which we’ve never seen, and our organisation continues to be materially impacted."
The company will announce its full financial results on August 20.
22 Comments
Talking to a Rep yesterday and he was thinking his business is going to get gutted. They have been so efficient working from home they need only half the people, the ones getting the chop will be in management. Offices will be abandoned.
People are not getting heads around the scale of job losses, looming.
Or the structural implications for B&M retail, commercial office space in CBD's, commuter usage of PT, hospo to service the cube farms - it's a long list of lined-up dominoes, and topple they will.
As I've noted, no-one has a Reverse BOM to aid in predicting much of this....
our boss is the opposite , even though nearly all the staff would like to do some work from home and we proved during lockdown we can he believes everyone needs to come to the office every day.
there are still plenty of dinosaurs out there,
its a bit like farmers auto milking systems have been around for twenty years and quite advanced by now but they still want to import cheap labour from offshore to compete
Robot milker costs run well north of $NZD 0.4m per unit and need extensive infrastructure on top of that capex - appropriate buildings, clean power supply, maintenance. The Iowa State financial model's c/b analysis comes out as close to zero. So having wetware attach them cups does seem, at least short-term, still to be a bargain....
I have and so have many I am in contact with on a daily basis. It will suddenly dawn on people that the government has a very poor record of delivery and when the WS runs out then "the penny may drop". the government is saying one thing about big spending, those organisations that actually deliver a lot of this, councils, NZTA etc are saying something else.
I am not suggesting a massive return of Chinese visitors to New Zealand if the border were open.
But, NZ government should seriously consider how to work with the Chinese government to open up border safely to Chinese visitors and students.
that is for the sake of reducing any damage on the NZ's economy.
Rare for me to agree with Xingmowang but your sensible concerns about infectious disease shouldn't be difficult to manage. For example all student (from whatever country) to go direct to student hostels that for the first month will be run as strict quarantine facilities. During that time all students to wear ankle bracelets revealing their location.
What we do not want to return to is pseudo-education sold to foreigners as a means to gain residency. This has just been the NZ taxpayer subsidising educational establishments as an indirect sale of residency. Allow students in; make them pay; take only the brightest; no work visa; no family. Sounds good to me. If concerned about CCP take in equivalent numbers from Taiwan, Hong Kong, Vietnam, Singapore.
Does nobody else see the clear conflict of interest with universities being asked to manage international student arrivals in their own facilities? It would be an absolute disaster. All the incentive will be on universities to move the new arrivals through the hostels as quickly as possible, regardless of the health outcomes.
the problem with that is who manages those facilites, if you leave to the university they have a vested interest in sweeping short comings under the carpet ad we only have to look to what has happened in Melbourne at the moment to see how devastating it will be to go back into lockdown because of slackness at border control.
https://www.abc.net.au/news/2020-07-01/victoria-coronavirus-hotel-quara…
As Victorian Premier Daniel Andrews announced the state would be reimposing lockdowns on some Melbourne postcodes from Thursday, he said failures in the state's hotel quarantine program were a key factor in dozens of coronavirus cases.
The government unit responsible for prisons will now oversee a "reset" of the hotel quarantine program and no new travellers will be hosted in Victoria for the next two weeks.
Don’t know about that. There is more than muttering about a fresh viral outbreak in China, swine flu nominally. An old story. 27 January 2020 , some weeks after Wuhan was isolated, a Chinese national was intercepted incoming at Washington DC airport with a poly bag of dead birds in his luggage. Did not think or care if there was anything amiss about that. How can you possibly trust these people, with their strange cuisine and lotions and potions, not knowing what they have consumed or handled prior to getting on the plane and arriving in your country.
We could build an Empire here, starting with importing Rich Hong Kong people to raise our House Prices, beyond the norm.....
Might have sufficient dosh and a safe haven for those with a different perspective to those we have had to deal with in the past.
We could expand on this and build Skyscrapers to the stars and House millions of people wishing for a huge new Democracy with wishful thinking for a bright new Future.
We could feed them the Truth and Tell of a Bright New World, Houses never go down, they always build up and up to the stars..
We could call it KiwiBuild 2 and let Labour do the Talking and National do the Firing of the Old School chain of thought..(They is getting good at it).....
A bright New World and a Count Down Chain of food for thought, in this Brave New Zealand....of OURS.
Or maybe we should just keep the economy ticking along...on our own........Safely, Securely with Xing to guide us to his way of thinking.
Maybe that is why he lives the life he does. One Man, or Woman, one vote. A benevolent Dictatorship. the rest of us slaves to his Desire.
What a new Beginning.....Post Coronovid-2020...and a New Leadership for all of Humanity. ... But no invasion of our Privacy.
You read it here...First.
A slight digression but is anyone aware of where (if) the stats office publish weekly or monthly numbers of work visas granted and cancelled ?
I ask as I'm certain a lot of the low skill work visas are not being renewed but these are not reported on the Covid Ue / wage supplement sheet.
I'd have to trawl the accounts but I suspect they were keeping the previous land values well below market so they could reval when a rainy day (two, three years) happened.
But yes, retail space the world over is getting revalued downward. Not sure how on earth they can get even a vague idea on what their property and land is worth now.
I'd also presume that once this wage subsidy ends we are going to see a flood of redundancies and a massive slow down of the domestic economy so they must be planning for a phase 2 hit.
Is Air New Zealand giving all its individual Taxpayers Fly Buys and cheap deals to "Thank Them all"for all the very, very special deal they suffered at the behest of the Government Handouts.
Will Americas Cup, also give all a free float around the World as a thanks for their Pecuniary Advantage. Or do we all Go "Hungary".....as well.
Skimming along is not supposed to be Beneficial for certain Beneficiaries Flying and Waving the Kiwi Flagging Economy...bye bye. Taxpayers suffering, while small Beneficiaries are supported, is socially acceptable.
Free loaders...not so much.
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