Air New Zealand has swung to a $NZ454 million ($416 million) net loss in the year to June 30 after being crushed by travel restrictions in response to the COVID-19 pandemic.
The loss, which comes after a $NZ276 million profit a year earlier, included a $NZ338 million write-down to the value of the airline's long-haul Boeing 777 fleet, which will remain grounded for the foreseeable future.
Air New Zealand has swung to a loss due to the coronavirus pandemic.Credit:Bloomberg
"It is clear that COVID-19 is unlike any other crisis the aviation industry has experienced," Air New Zealand's chief executive officer Greg Foran said in a statement.
The airline reported an underlying loss before significant items and tax of $NZ87 million, compared to a profit of $NZ387 million in the prior year, reflecting a 74 per cent drop in passenger revenue from April to the end of June.
The underlying loss was smaller than the company forecast in June, when it predicted a $NZ120 million loss, which Mr Foran said was due to a stronger than expected recovery in domestic flying.
Air New Zealand's domestic capacity was back to 70 per cent of pre-COVID levels in June and August, well ahead of many other domestic markets. Qantas is currently flying at around 20 per cent of pre-COVID levels domestically, while domestic flights in the United States are at around 55 per cent.
However, Air New Zealand said it does not expect passenger demand to return to 2019 until 2023 at the earliest.
“In the airline’s 80-year history we have faced many challenges and emerged from each one stronger than before," Mr Foran said.
"We entered this crisis in an enviable position, and with our core domestic network, I believe we are better positioned for recovery than many of our airline peers."
More to come
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