Air New Zealand has reported another big loss as the pandemic continues to wreck havoc on its operations.
The airline is planning to revive the business in the second half as the international border gradually reopens, Greg Foran says. Photo: RNZ / Samuel Rillstone
Chief executive Greg Foran said limited international travel on top of local lockdowns in the first half of the financial year had a huge impact on this interim result.
"The airline has typically derived two-thirds of its revenue from its international passenger network and much of that was effectively grounded for the majority of the first half," he said.
Key numbers (for the six months ended 31 December 2021 vs year earlier)
- Net loss: $272m vs $72 million
- Revenue: $1.13b vs $1.24 billion
- Underlying loss $367m vs $185m
- Expenses $1.12b vs $1.01b
Revenue fell 9 percent, with passenger revenue down 26 percent as a result of the 107-day Auckland lockdown.
On the plus side, cargo increased 29 percent to $482 million, with support from government schemes.
Foran said the airline was preparing to revive the business in the second half as the international border gradually reopens.
"We're bringing back approximately 250 cabin crew and pilots and have reanimated one of our Boeing 777-300s to do some of the cargo heavy lifting," he said.
"Looking further out to the end of this calendar year, we will be ramping up more passenger flights to North America and looking forward to starting up our direct service to New York city."
Photo: AFP
The airline planned to launch its capital raising programme at the end of March to cover the debt it has accumulated since the border restrictions were introduced in early 2020.
Foran said fuel costs rose 14 percent in the half to $174m with further increases expected in the second half reflecting increases in global oil prices.
Air New Zealand expected to make a loss before tax and other significant items of more than $800m.
Forsyth Barr head of research Andy Bowley said the outlook implied there would be further downgrades to come, as market consensus was for an underlying loss of $774m.
"This means losses will increase through t2H22 (second half) vs 1H22 (first half) due to the Omicron outbreak, rising opex (operating expenses) in anticipation of the recovery, and higher fuel prices," Bowley said.