Sharechat Logo

Air New Zealand Limited (NZX: AIR) Update on Tasman Impact to Earnings and Liquidity

Wednesday 4th August 2021

Text too small?

Given the current suspension of trans-Tasman quarantine free travel, Air New Zealand is providing an update on the 2022 financial year earnings guidance previously provided to the market on 18 June 2021, as well as an update on liquidity.

Earnings guidance

On 23 July 2021, the New Zealand Government announced the suspension of trans-Tasman quarantine-free travel for a period of eight weeks. The airline continues to assess the impact of this temporary suspension on passenger demand, in conjunction with an expectation that demand on the Tasman may be slower to recover following the re-opening of a travel bubble and that there remains a risk of future suspensions. This has resulted in Air New Zealand reassessing its 2022 financial year earnings expectations.

The airline currently expects losses before other significant items and taxation will not exceed $530 million for the 2022 financial year, assuming a fuel price of USD78 per barrel and an NZD/USD foreign exchange rate of 0.70. The Company previously stated on 18 June 2021 that it expected losses before other significant items and taxation to be comparable to the 2021 financial year, being a loss not exceeding $450 million.


Operating cashflow has reduced as a consequence of the temporary suspension of trans-Tasman travel. This reduction in cashflow, in addition to planned cash payments relating to aircraft in the coming months, means the Company expects to draw down further on the Crown standby loan facility (“the Facility”) before the end of August 2021.

The Company’s operating cashflow remains positive due to continued domestic performance and the revenue contribution from the Government’s Maintaining International Air Connectivity scheme which is currently in place until October 2021. As discussed at the 2021 interim results, operating cashflow has also benefitted from the one-off deferral of around $310 million in PAYE payments in the 2021 and early 2022 financial years, which will start to be repaid in the 2022 financial year.

Air New Zealand has not drawn on the Facility since February 2021, therefore current drawings remain at $350 million. As disclosed previously, the total available amount under the Facility is $1.5 billion, and therefore the Company currently has remaining available funds of $1.15 billion under the Facility.

Please see the link below for details

Air New Zealand provides update on Tasman impact to earnings and liquidity

Source: Air New Zealand Limited

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

FreshLeaf: Cannabis on course to be 'medicine of the masses'
Arvida Group Limited (NZX: ARV) to Acquire Arena Living Retirement Living Portfolio
My Food Bag Group Limited (NZX: MFB) Market Update and HY Results Announcement Date
Harmoney Corp Limited (NZX: HMY) Delivers Record September Quarter
Vital Healthcare Property Trust (NZX: VHP) Announces Successful Completion of $115m Placement
14th October 2021 Morning Report
General Capital Limited (NZX: GEN) Completes Greenfern Listing
13th October 2021 Morning Report
Hotel Montreal: Patterson Family Buys Christchurch's Hotel Montreal