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Air New Zealand Limited (MZX: AIR) Announces 2021 Result as it Navigates Covid-19

Thursday 26th August 2021

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Air New Zealand has announced a loss before other significant items and taxation of $440 million for the 2021 financial year – its first full 12-month period of operation with Covid-19 related international travel restrictions. Using the same metric, the company reported an $87 million loss for the 2020 financial year.

Statutory losses before taxation, which include a $29 million gain from other significant items, were $411 million, compared to a loss of $628 million last year.

The financial result benefited from approximately $450 million of Government assistance including airfreight support schemes as well as further subsidies and initiatives that are not expected to be repeated to the same extent in the 2022 financial year.

Ongoing border restrictions saw operating revenue decline 48 percent to $2.5 billion as international flying was significantly reduced, with capacity down 55 percent on the prior year, although cargo flying revenue grew by 71 percent compared to the prior year thanks to airfreight support schemes. The airline’s domestic business performed strongly, led by strong leisure demand as well as corporate customers flying at close to pre-Covid levels.

Chairman Dame Therese Walsh says the 2021 financial result reflected the reality of a year in which the airline was unable to fly two-thirds of its passenger network.

“In a severely constrained environment, Air New Zealand maintained cost discipline, focusing on delivering with excellence in the areas in its control. The return of a strong domestic business and growth in the cargo services that underpin our key export markets was a reminder of the airline’s crucial role in New Zealand’s infrastructure,” says Dame Therese.

“Air New Zealanders showed agility during constantly changing operating conditions, managing reopenings, pauses and then closures while generating new revenue from additional cargo routes and increasing domestic and regional passenger capacity to match an increased demand for domestic leisure travel.”

Dame Therese paid tribute to the continued commitment and sacrifice of the Air New Zealand team.

Financial results summary

• Operating revenue of $2.5 billion, down 48 percent on the prior year

• Cargo revenue up 71 percent on the prior year, supported by the New Zealand and Australian Government’s IAFC, MIAC and IFAM schemes (the airfreight support schemes)

• Loss before other significant items and taxation of $440 million

• Loss before taxation of $411 million

• Domestic capacity rebounded strongly as the year progressed, reaching 93 percent of pre-Covid for the three months ending July, driven by strong leisure demand and the return of corporate customer

• Latest domestic nationwide lockdown expected to negatively impact financial operating performance

• Liquidity of $1.3 billion as at 24 August 2021, comprised of $183 million cash and $1.15 billion of undrawn funds on the Government standby loan facility (the Facility)

• Dividends remain suspended

• Planned capital raise deferred to first quarter of calendar year 2022

Please see the links below for details

Air NZ 2021 Annual Results Media Release

Air NZ 2021 Annual Results Presentation

Air NZ 2021 Annual Shareholder Review

Air NZ 2021 Financial Results

Air NZ 2021 Annual Results Appendix 1

Source: Air New Zealand Limited

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