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Air New Zealand’s state loan intact despite $575m loss

written by Adam Thorn | August 27, 2020
Air New Zealand Airbus A321neo ZK-NNA takes off from Cairns Airport. (Andrew Belczacki)
Air New Zealand Air bus A321neo ZK-NNA takes off from Cairns Airport. (Andrew Belczacki)

Air New Zealand recorded an enormous statutory loss before tax of $575 million (NZ $629 million) for the last financial year – but has still yet to draw down on its $824 million (NZ $900 million) government loan.

In results released to the media on Thursday morning, the airline said coronavirus travel restrictions sparked a 74 per cent drop in passenger revenue from April and the business spent $309 million (NZ $338 million) grounding its 777-200ER fleet.

Chief executive Greg Foran hailed a resurgence in domestic flying but warned, “with almost 70 per cent of our revenue derived from international flying, while border restrictions remain in place our business will continue to be significantly impacted”.

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“The recent resurgence of community transmission in New Zealand in August has also reminded us that we cannot afford to be complacent,” Foran said.

The results will be seen as broadly positive, however, they significantly don’t include the effect of Auckland’s second lockdown, which saw it wind down much of its schedule.

The business recorded a loss before tax and significant items of $80 million (NZ $87 million) which was down from earnings of $354 million (NZ $387 million) in the prior year.

Pre-coronavirus, the airline recorded an interim profit of $181 million (NZ $198 million) for the first half of the financial year, before restrictions led to an almost three-quarter drop in passenger revenue.

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However, business surged as the country appeared to eradicate coronavirus, with the business saying it “experienced heavy demand for domestic travel, particularly into leisure destinations such as Queenstown” and it shifted up to operating 70 per cent of its pre-coronavirus network.

“It has been great to see our domestic business perform well ahead of our expectations in June and July as the New Zealand public once again shows us that they have an innate love of travel,” said Foran.

“We are also pleased to have ramped up our cargo offering in recent months, flying more than 50 flights per week under the International Airfreight agreement we signed with the Ministry of Transport in late April. These cargo services ensure key goods such as medical supplies and food continue to flow in and out of New Zealand.”

Earlier this month, Australian Aviation reported how Air New Zealand was reducing services to and from Auckland after Prime Minister Jacinda Ardern extended the city’s lockdown.

The airline also said it had seen “significantly reduced demand” but that its network outside of the capital would maintain its existing schedule, albeit with social distancing introduced.

On 11 August, PM Ardern announced the Auckland region would re-enter an ‘alert level 3’ lockdown for three days due to four new COVID-19 cases being identified, with people back to working from home and gatherings of more than 10 people banned.

The rest of the country was moved into lighter ‘alert level 2’ restrictions, which limited mass gatherings to 100 people and saw the return of social distancing.

That lockdown was extended multiple times, and is currently scheduled to last until Sunday, 30 August.

Before Auckland’s resurgence of COVID-19 cases, the airline reported record numbers for the July school holidays and had even increased its domestic capacity to 70 per cent of pre-pandemic levels.

25% off starts now! Australian Aviation magazine Cyber Monday sale is now live. Have the very best of Australian Aviation’s annual print and digital subscription. This includes every In Focus and Behind the Lens digital magazine, special coverage, exclusive photos and editions you may have miss. Subscribe now at australianaviation.com.au.

Air New Zealand’s state loan intact despite $575m loss Comment

  • Jarden

    says:

    Wellington is actually the capital of NZ not Auckland.

Leave a Comment

Your email address will not be published. Required fields are marked *

Air New Zealand’s state loan intact despite $575m loss

written by Adam Thorn | August 27, 2020
Air New Zealand Airbus A321neo ZK-NNA takes off from Cairns Airport. (Andrew Belczacki)
Air New Zealand Air bus A321neo ZK-NNA takes off from Cairns Airport. (Andrew Belczacki)

Air New Zealand recorded an enormous statutory loss before tax of $575 million (NZ $629 million) for the last financial year – but has still yet to draw down on its $824 million (NZ $900 million) government loan.

In results released to the media on Thursday morning, the airline said coronavirus travel restrictions sparked a 74 per cent drop in passenger revenue from April and the business spent $309 million (NZ $338 million) grounding its 777-200ER fleet.

Chief executive Greg Foran hailed a resurgence in domestic flying but warned, “with almost 70 per cent of our revenue derived from international flying, while border restrictions remain in place our business will continue to be significantly impacted”.

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Advertisement

“The recent resurgence of community transmission in New Zealand in August has also reminded us that we cannot afford to be complacent,” Foran said.

The results will be seen as broadly positive, however, they significantly don’t include the effect of Auckland’s second lockdown, which saw it wind down much of its schedule.

The business recorded a loss before tax and significant items of $80 million (NZ $87 million) which was down from earnings of $354 million (NZ $387 million) in the prior year.

Pre-coronavirus, the airline recorded an interim profit of $181 million (NZ $198 million) for the first half of the financial year, before restrictions led to an almost three-quarter drop in passenger revenue.

PROMOTED CONTENT

However, business surged as the country appeared to eradicate coronavirus, with the business saying it “experienced heavy demand for domestic travel, particularly into leisure destinations such as Queenstown” and it shifted up to operating 70 per cent of its pre-coronavirus network.

“It has been great to see our domestic business perform well ahead of our expectations in June and July as the New Zealand public once again shows us that they have an innate love of travel,” said Foran.

“We are also pleased to have ramped up our cargo offering in recent months, flying more than 50 flights per week under the International Airfreight agreement we signed with the Ministry of Transport in late April. These cargo services ensure key goods such as medical supplies and food continue to flow in and out of New Zealand.”

Earlier this month, Australian Aviation reported how Air New Zealand was reducing services to and from Auckland after Prime Minister Jacinda Ardern extended the city’s lockdown.

The airline also said it had seen “significantly reduced demand” but that its network outside of the capital would maintain its existing schedule, albeit with social distancing introduced.

On 11 August, PM Ardern announced the Auckland region would re-enter an ‘alert level 3’ lockdown for three days due to four new COVID-19 cases being identified, with people back to working from home and gatherings of more than 10 people banned.

The rest of the country was moved into lighter ‘alert level 2’ restrictions, which limited mass gatherings to 100 people and saw the return of social distancing.

That lockdown was extended multiple times, and is currently scheduled to last until Sunday, 30 August.

Before Auckland’s resurgence of COVID-19 cases, the airline reported record numbers for the July school holidays and had even increased its domestic capacity to 70 per cent of pre-pandemic levels.

25% off starts now! Australian Aviation magazine Cyber Monday sale is now live. Have the very best of Australian Aviation’s annual print and digital subscription. This includes every In Focus and Behind the Lens digital magazine, special coverage, exclusive photos and editions you may have miss. Subscribe now at australianaviation.com.au.

Air New Zealand’s state loan intact despite $575m loss Comment

  • Jarden

    says:

    Wellington is actually the capital of NZ not Auckland.

Leave a Comment

Your email address will not be published. Required fields are marked *

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