Addendum
Air New Zealand follows Asia-Pacific rivals into the red
September 1st 2020
Air New Zealand (Air NZ) has joined the long line of airlines drowning in red ink as the coronavirus crisis shows little sign of abating. Read More » The Auckland-based carrier reported a net loss of $301 million for its fiscal year to June 30, its first 12-month deficit in 18 years. It reported a $183 million profit a year ago. It will draw down a $596.34 million government loan this month to ease its cash flow drought.
New Zealand has recorded an extremely low number of COVID-19 cases, but border closures have curtailed international operations. Air NZ CEO, Greg Foran, said current modelling suggested the carrier would make another “significant” loss in 2021. The Auckland-headquartered company traditionally generates almost 70% of its revenue from international travel. Foran does not expect passenger demand to return to 2019 levels until 2023 or beyond.
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“Until global borders reopen, we will continue to be significantly impacted by this crisis. The unfortunate reality is we don’t expect to see a return to long-haul travel for some time. Until then, we will be a keenly focused domestic airline,” he said.
On a conference call with analysts, Foran described the operating environment as the worst the aviation industry has experienced. “We absolutely are not seeing a V-shaped recovery or even a U, it’s more like an L,” he said.
Air New Zealand has laid off about 4,000 staff and grounded some aircraft, while domestic services have been hampered by a second lockdown in the capital city, Auckland, after the country recently identified a new outbreak of the virus.
“Some airlines will not survive this. The actions we have taken to date, albeit painful, are with a view to setting ourselves up for success in whatever competitive and demand environment emerges on the other side of this crisis,” Foran said.
The latest figures from the Association of Asia Pacific Airlines, for July, revealed airlines transported 844,000 international passengers for the month, less than 3% of the 33.4 million international air travellers carried a year ago. Passenger capacity averaged 8.3% and international load factor was 33.2%.
