Our national airline says there's still too much uncertainty to forecast earnings for the financial year that ends in a month, but says it hasn't needed to draw on the $900m loan facility offered by the taxpayer yet


New Zealand's national carrier Air New Zealand is forecasting one-off financial hits of between $550 million and $700 million for the financial year ending June 30.

It hasn't, however,  needed yet to draw on the $900 million loan facility the Government has offered it, courtesy of the taxpayer.

And the airline has put measures in place that are expected to reduce its average monthly cash outflows by approximately $50 million to $60 million for the 2021 financial year.

Air New Zealand says it is now expecting to report an 'underlying loss' (not including the one-off hits) for the June 2020 financial year, but given there is still a high degree of uncertainty regarding demand for air travel under New Zealand’s Alert Level 2, the period of time in which social distancing will be required on the aircraft and the timing of a shift to Alert Level 1, "the airline will not be providing specific 2020 earnings guidance at this time".

Cost cutting measures taken by Air New Zealand have included:

Air New Zealand provided the below table setting out the range of anticipated one-off costs that it's incurring in the current financial year.

Chief executive Greg Foran said the Covid-19 pandemic has had an unparalleled impact on the aviation industry, "and the future landscape of the airline will look vastly different to what it does today".

"This is without a doubt the most significant challenge our airline, and indeed the entire aviation industry, has ever faced. The implementation of domestic travel restrictions and border closures have been incredibly effective at slowing the spread of Covid-19 in a number of countries, including here in New Zealand, but they have also had a profound impact on demand for air travel.

"Throughout this pandemic, Air New Zealand’s focus has first and foremost been on protecting the health and safety of our customers and our team, while also taking swift and decisive action to protect the long term viability of the airline and preserve liquidity. We are doing everything in our power to ensure Air New Zealand emerges strongly from this crisis."