Air New Zealand Says It Expects Losses In Fiscal 2021 And 2022
Air New Zealand has said that it expects losses in fiscal 2021 and 2022 as any meaningful recovery in long-haul demand is unlikely while international borders remain closed, though domestic capacity is back to 90% of pre-COVID-19 pandemic levels.
The airline said losses before other significant items and taxation would not exceed NZ$450 million ($315 million) for financial year 2021 ending on June 30.
The company said it expected a similar result in 2022, but that forecast was more uncertain.
Long-haul international passenger travel remains highly restricted with passenger volumes currently less than 5% of pre-COVID-19 levels, while international borders remain closed, Air NZ said, although capacity to Australia is back to 70% of normal levels due to a quarantine-free travel bubble.
Air New Zealand Chief Executive Greg Foran said the airline's biggest focus was on maintaining cost reductions across its business made since the start of the pandemic as well as finding additional savings.
As a result, it has pushed back the delivery of the first of eight Boeing Co 787s by a year to fiscal 2024 due to the weaker outlook for long-haul travel than forecast when it placed the order in 2019.
It can also defer deliveries on other 787s due from fiscal 2024 onward if needed, the airline said.
Air NZ said domestic capacity was now at about 90% of pre-pandemic levels, and corporate demand continues to show strong signs of recovery, while its cargo business was also performing strongly.
These segments, along with government support measures, have helped the company generate positive core earnings since September 2020, making it cash flow positive since the second quarter of the 2021 financial year, it said.
Air NZ said it had drawn down NZ$350 million of a NZ$1.5 billion government loan, while plans for an equity raising by Sept. 30 to improve its capital structure remained unchanged.