Air New Zealand is forecasting a big loss for the year to June and a repeat of that loss in the new 2022 financial year – taking the two-year total to around $NZ900 million.
In a trading update delivered on Friday the airline said it “expects losses before other significant items and taxation will not exceed $450 million for the 2021 financial year” which ends in less than two weeks on June 30.
And it expects a loss for 2021-22 in the same range as it hangs on with substantial government support.
“The airline currently anticipates a loss before other significant items and taxation in the 2022 financial year comparable with that expected for the 2021 financial year. However, given the current environment, the outlook for the 2022 financial year remains uncertain,” Air New Zealand said.
The airline also repeated its previous advice that it expects to launch a capital raising in the September quarter.
Air NZ also revealed it is giving its remaining 8,000 or so staff, $NZ1,000 worth of shares to thank them for their efforts over the past year.
The shares will be handed out in the December quarter of this year.
The airline lost $72 million in the six months to December – the real loss however was higher but for significant financial support from the NZ government which continues.
The airline said that its domestic business is back to 90% of pre-Covid levels but its international operations are 95% down with the travel bubble to Australia and Cook Island route the major area of operations.
The airline said its air cargo business is doing well with the help of the government.
“For the 2021 financial year, Government financial support under the air cargo support schemes is expected to contribute between $320 million and $340 million in total cargo revenue,” Air NZ said.
Air New Zealand has consumed more than $NZ1 billion in cash since the Covid-19 pandemic hit, as it (like so many of its peers) has been unable to fly many of its routes.
However, it says it has had positive cashflow in recent months, benefiting from the Government’s air cargo support schemes, wage subsidies and other aviation relief packages.
The airline’s, operating cash flow has also benefitted from the one-off deferral of around $NZ310 million in tax payments this year, which will start to be repaid in the 2022 financial year.
CEO Greg Foran says that despite the challenges of the last 12 months, the airline continues to have a strong core in its Domestic and short-haul businesses.
“There has been much to celebrate in recent months, with the opening of travel bubbles on the Trans-Tasman and to the Cook Islands, and the continued strong demand across our Domestic network.
“Our cargo business, which continues to be supported by the Government’s MIAC scheme, has also provided the Company with a crucial earnings stream while international borders remain closed,” he said.
Air New Zealand has made no more drawdowns on the Crown standby loan facility since February. It has drawn down $US350 million, and has remaining available funds of $NZ1.15 billion.
