Thursday 25th February 2021
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Air New Zealand has today announced a loss before other significant items and taxation of $185 million for the six-month period ended 31 December 2020, reflecting the considerable impact of the Covid-19 pandemic on the airline and global aviation industry. This compares to earnings before other significant items and taxation of $198 million for the same period last year.
Statutory losses before taxation of $104 million include an $81 million gain from other significant items, compared to a $139 million profit before taxation for the first half of the previous financial year.
The continuation of significant restrictions on international travel to and from New Zealand saw the airline’s operating revenue decline 59 percent to $1.2 billion in the first six months of the financial year, as network flying was substantially reduced by 65 percent. This was despite strong Domestic operations and additional cargo flying supported by the IAFC.
Chief Executive Officer Greg Foran says that the interim results are something the Air New Zealand whānau should be very proud of given the context of a global pandemic that has virtually suspended international air travel.
“I could not be more proud of the way our team have gone about operating our airline in the midst of this crisis. They have dealt with each and every obstacle thrown their way with a huge degree of professionalism and frankly, we wouldn’t be operating the level of domestic and cargo capacity we are without their extraordinary efforts.
“While we made significant changes to our business and cost base, and did this more quickly than most airlines, since the outbreak of the pandemic we have still burnt through over $1 billion in our own cash reserves – that’s just huge. We have been fortunate to receive significant financial assistance from wage subsidies and the Government’s aviation relief package throughout the first half of the financial year, as well as benefiting from lower fuel prices, however these benefits are not expected to extend into the second half of the financial year.
Outlook for 2021
As there is still a large degree of uncertainty surrounding the lifting of travel restrictions and the subsequent level of demand, Air New Zealand is not providing 2021 earnings guidance at this time. Despite strong domestic and cargo performance, the scenarios we are currently modelling suggest we will make a significant loss in 2021.
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