The Auckland International Airport Limited (ASX: AIA) share price will be one to watch on Friday after it revised its earnings guidance due to the coronavirus outbreak.
What did Auckland International Airport announce?
This morning the airport operator announced that due to the international outbreak of COVID-19 and significant market uncertainty, it has downgraded its underlying earnings guidance for FY 2020.
Last month when Auckland Airport released its half year results, the company advised that it expected underlying earnings in the range of NZ$260 million and NZ$270 million.
However, due to the tough trading conditions it is experiencing, it now expects underlying earnings between NZ$210 million and NZ$235 million in FY 2020.
Auckland Airport Chief Executive Adrian Littlewood explained: "The new earnings guidance reflects today's updated view on passenger numbers and our decision to introduce a range of support measures for specific airport partners for the remainder of the 2020 financial year."
Though, the chief executive warned that any potential border restrictions could impact this guidance.
He explained: "Since the announcement of our interim results on 20 February 2020 the COVID-19 outbreak has continued to evolve quickly with cases spreading rapidly across the globe. We will be monitoring developments over the remainder of the 2020 financial year, including the introduction of any new border restrictions, and we will continue to update guidance if there are further significant changes."
Passenger numbers slide.
In line with what was reported by Sydney Airport Holdings Pty Ltd (ASX: SYD) earlier this week, Auckland Airport has experienced a sharp decline in international passenger numbers month to date.
Initial data for international passengers for the first 10 days of March has shown an 18% decline on the prior corresponding period. Management expects a further downturn in passenger numbers to continue for the remainder of the 2020 financial year.
Auckland Airport's Board Chair, Patrick Strange, advised that the company is watching its costs closely during these difficult times.
He said: "For our own business, we are continuing our disciplined approach to operating costs and ensuring our organisation remains resilient as we navigate our way through this challenging period."
Mr Strange also advised that the company supports the decision to relax airport slot rules. This means airlines won't be forced to fly empty planes in order to retain their historic airport slots.
