Air New Zealand still struggling with COVID-19 effects – posts full-year pre-tax loss of NZ$810 million

Despite ending the financial year strongly, New Zealand flag carrying airline Air New Zealand has reported an operating revenue of NZ$2.7 billion, advising that this figure reflects the considerable extent to which the carrier had been affected by pandemic-related travel restrictions. The carrier posted loss before other significant items and taxation of NZ$725 million for the 2022 financial year, consistent with guidance provided to the market in June. The statutory loss before taxation was NZ$810 million compared to a loss of NZ$415 million in the prior year.

New Zealand’s borders began a phased reopening back in March, but the airline has subsequently been hit by the increase in fuel costs. Air New Zealand Chief Executive Officer Greg Foran stated that cargo revenue continued to be a major contributor to the company’s performance, up 32% to NZ$1.0 billion. Additional flying under the New Zealand and Australian government airfreight schemes contributed NZ$403 million of that revenue.

With borders now largely reopened, the Australian scheme has ended and the New Zealand scheme is tapering off and will cease by the end of March 2023. As at August 23, 2022, the airline has available liquidity of NZ$2.3 billion, consisting of approximately NZ$1.9 billion in cash and NZ$400 million of available funds on the unsecured standby loan facility with the Crown. The cash balance includes NZ$200 million of issued redeemable shares which the airline intends to redeem once it has recovered further.

The Board does not expect to consider payment of dividends before the airline’s earnings substantially recover and in the context of a supportive and sustained broader economic environment and recovery. As far as the outlook for 2023 is concerned, total flying capacity for the 2023 financial year is expected to be in the range of 75% to 80% of pre-COVID levels. (US$1.00 = NZ$1.62 at time of publication).