Air New Zealand has survived for another year, revealing a loss before tax and one-off items for the 2021-22 financial year of $NZ725 million, significantly deeper than the $NZ444 million the year before.
The airline had to battle another year dominated by Covid restrictions, as well as the rapid surge in fuel costs in the June half year and rising costs elsewhere in its business.
Air NZ told stock exchanges on both sides of the Tasman on Thursday that its statutory loss for the year before tax was $NZ810 million, almost double the $NZ410 million for 2020-21.
The result was struck on a 9% rise in revenue for the year to $NZ2.7 billion with much of that improvement due to another year of solid performance in its air cargo business.
The year saw the company’s recapitalisation secured in May in a $NZ2.2 billion deal which boosted cash on hand at June 30 to $NZ2.3 billion.
The airline said the loss was “consistent with guidance provided to the market in June.”
“Although the financial year ended strongly following the phased reopening of New Zealand’s borders from March, the airline’s operating revenue of $2.7 billion was significantly impacted by pandemic related travel restrictions.
“Cargo and domestic revenues helped lift overall revenue by 9 percent, however high fuel prices and reduced flying over much of the year resulted in a loss for the period.”
CEO Greg Foran said the airline continued to be guided by a clear strategy, moving deftly to address continued change by focusing on doing the right thing for its stakeholders.”
“For customers, we’ve been focused on restoring services, maintaining a choice of fares and launching innovations to improve their journey with us. For our amazing staff we have provided one-off awards to acknowledge their continued extra mahi, and for our communities we’ve been obsessed with operational performance, which drives the reliable services they depend on,” says Mr Foran.
“For our shareholders, whose support has refuelled the business for future growth, we’ve completed a successful recapitalisation that was structured to be fair to our shareholders, including those that didn’t take up the rights offer.”
Mr Foran said cargo revenue continued to be a major contributor to the company’s performance, up 32 percent to $1.0 billion. Additional flying under the New Zealand and Australian government airfreight schemes contributed $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.
And even though the airline is better position now with Covid easing and the refinancing done, it is still very cautious about the 2022-23 year.
“With borders now open to the majority of the airline’s markets, Air New Zealand expects the 2023 financial year to represent the first full year of uninterrupted passenger flying since the beginning of the pandemic.
“Total flying capacity for the 2023 financial year is expected to be in the range of 75 percent to 80 percent of pre-Covid levels. On this basis, the airline anticipates a significant improvement in financial performance relative to financial year 2022.
“Given the degree of uncertainty regarding volatility in jet fuel prices, the risk of a global recession, and other macroeconomic factors including inflationary pressures on costs, no earnings guidance will be provided at this time,” the airline told the market on Thursday.
