Air New Zealand financial results reveal massive cost of COVID-19

Air New Zealand has released its financial results for 2020 and they reveal the unprecedented effect of the COVID-19 pandemic on the airline and the global aviation industry as a whole

The airline has posted a net tax loss of $454 million, down from last year's profit of $270 million.

The first six months of the financial year were looking promising for Air NZ, reporting a strong interim profit of $198 million, but COVID-19 resulted in a 74 percent drop in passenger revenue in April - June compared to the same period in 2019.

On top of the pandemic decimating revenue, it also meant additional expenses with the grounding of large parts of the airline's fleet. For example, there was a $338 million aircraft impairment charge related to grounding of the Boeing 777-200ER fleet for the foreseeable future.

The statutory losses before taxation figure of $628 million - which include $541 million of other significant items - is a huge drop from the earnings of $382 million last year. 

Financial Summary: 

  • Operating revenue of $4.8 billion, down 16 percent on 2019 as a result of travel restrictions due to COVID-19
  • Total network capacity decline of 21 percent compared to the prior year
  • Cargo revenue of $449 million, up 15 percent on 2019 due to increased cargo capacity on aircraft not carrying passengers
  • Loss before other significant items and taxation of $87 million
  • Loss before taxation of $628 million

In a statement, Air NZ CEO Greg Foran said COVID-19 had highlighted once again that the core strength of Aotearoa's national airline is its people and their ability to respond to change quickly.

"I am in awe of the dedication, perseverance, and professionalism of Air New Zealanders across the business and never cease to be amazed at the resilience and strength of our people as we work our way through this crisis.

"Whether it be volunteering to crew repatriation flights to unfamiliar ports, dealing with substantial increases in volume at the call centre, or our cargo team's efforts to keep New Zealand exporters connected to global markets, the response of our people has been nothing short of remarkable" Foran said.

Air NZ's short-term liquidity was approximately $1.1 billion, made up of cash and the $900 million standby loan facility from the New Zealand Government, which the airline expects to draw on "within days".