After a significant H1 drop, Air New Zealand is expected to achieve its lowest annual result since 2001

After a significant H1 drop, Air New Zealand is expected to achieve its lowest annual result since 2 ...

  • H1 loss before tax jumps to NZ$367 mln
  • Expects annual underlying loss of more than NZ$800 mln
  • Hit by lockdown, expiring relief schemes, rising fuel prices

Air New Zealand Ltd declared on Thursday that it had suffered the worst day in a row due to a lockdown in Auckland, a breakdown in government assistance, rising gasoline costs, and an ongoing international border closure.

Air New Zealand forecasts a total loss before taxes and significant items of more than NZ$800 million (541 million) in the financial year ending June 30, the same amount that was recorded last year.

The increase in statutory loss attributed to the airline in the first half, compared to 105 million in 1990.

The Chairman of Air New Zealand said the performance of the company in the 2021 financial year was improving because the domestic network had mostly kept flying and travel bubbles with Australia and the Cook Islands had boosted the second half.

"The financial year for 2022 has and will continue to be significantly impacted, despite persistent demand and rising costs," she said in a statement.

Air New Zealand said on Thursday that it intends to increase its capital by the end of March or shortly thereafter to replace a NZ$2 billion liquidity package from its largest shareholder, the New Zealand government.

According to the report, the airline had reduced NZ$760 million in a government loan by Wednesday.

In the first half, a lockdown in Auckland, the country's largest city, forced the airline's domestic business to adversely impact, but during a period when international borders were still closed.

This year, the government has announced plans for a phased border opening, but travel organizations believe that self-isolation requirements must be removed, causing the tourism industry to be revived.

Air New Zealand said there was still "a large degree of uncertainty" about the effect of the Omicron variant on domestic travel for the remainder of the financial year, and that self-isolation rules would have a significant impact on international demand.

($1 = 1.4775 $ New Zealand)

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