Auckland Airport has suspended big expansion plans, laid off contractors and is talking pay cuts and reduced hours for staff until normality resumes following the Covid-19 pandemic.
Photo: 123RF
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The country's international gateway is putting on hold any work on a second runway, a planned hotel, carpark, and domestic jet hub.
Close to 20 million domestic and international passengers use the airport every year, but it said it expected foreign traffic to fall almost to zero in the new few months, with local traffic also severely reduced.
"Auckland Airport is a resilient business, but these are unprecedented times and we are now moving quickly to identify ways that we can manage the impact on our organisation. As we face an uncertain future, we are having to make some tough decisions," chief executive Adrian Littlewood said.
He said it was now cutting all non-essential spending, and looking for all options to save money.
The company has more than $800 million in cash and credit facilities, and the projects that have been put on hold were worth more than $2 billion.
"Our long-term plans remain the same, but until we know more about how long the market will take to rebuild and recover, it's not possible to keep these projects open, on hold and continuing to generate significant costs," Littlewood said.
However, current work to upgrade its main runway would continue.
The airport had laid off 90 contractors, and was now talking to staff about cutting hours and pay by 20 percent.
The board, chief executive and senior staff have already taken a 20 percent pay cut.
Battening down the hatches
Most listed companies have taken steps to conserve cash and cut costs.
The most common form has been to cut dividend payments, with some firms' executives taking pay cuts, as well as cutting all non-essential spending.
Property companies Argosy and Property For Industry each secured an extra $50m in new credit lines.
The Marsden Point oil refinery operator, Refining New Zealand, has rejigged its credit facilities in addition to cost-cutting and halving production.
"Our banks have done an incredible job of turning around some difficult things quickly and we've agreed that they will extend some of our lines of credit, we don't expect to need them but as we look forward to 2021 it gives us an extra measure of financial robustness," managing director Paul Zealand said.
Marsden Point Refinery has halved production due to a lack of demand during the pandemic. Photo: 123rf.com
Most companies have also withdrawn any earnings forecast for the rest of the year.
Agri-business PGG Wrightson's statement to the stock exchange is typical of most.
"In view of the unprecedented events in recent weeks... the board has determined that it is prudent to withdraw PGW's current guidance and
place this under review until such time that the impact on earnings can be more accurately assessed," it said in a statement.
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