Air New Zealand posts $440 million loss for 2021 financial year

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 travel restrictions.

That's after the company reported an $87 million loss for the 2020 financial year, using the same metric.

In a statement, Air NZ says its financial result benefited from approximately $450 million of Government assistance including airfreight support schemes as well as further subsidies and initiatives, which it doesn't expect to be repeated to the same extent in the 2022 financial year.

Key Points:

  • 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 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-19 for the three months ending July, driven by strong leisure demand and the return of corporate customers
  • Latest domestic nationwide lockdown expected to negatively impact financial operating performance
  • Liquidity of $1.3 billion as at August 24 2021, comprised of $183 million cash and $1.15 billion of undrawn funds on the Government standby loan facility.
  • Dividends remain suspended
  • Planned capital raise deferred to first quarter of calendar year 2022

COVID-19's 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 from the New Zealand and Australian governments. 

Air NZ Chair 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 NZ 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," Dame Therese said.

"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."

Chief Executive Officer Greg Foran said the 2021 financial year was one in which the airline "played the hand it was dealt," kept planes flying every day and took some important steps in the delivery of its refreshed strategy, Kia Mau.

"Our people developed new capabilities and dexterity, adapting quickly when conditions changed. Although the return of long-haul travel seems some time away, the changes the team made this year will serve us well when it returns," Foran said.

"We have reimagined our domestic business, increasing the choice of flight times and introducing greater price differentiation for peak and off-peak flying. This allows us to offer more lower priced fares, which will unlock new demand for domestic tourism."

"We capped fares to ensure travel isn't out of reach when it's needed most, reintroduced the popular Fast Bag service with new features, and improved our unaccompanied minors service to make travel easier for our most valuable cargo and safer for our people."

Foran said the airline team also enjoyed interacting with customers through such projects as the new inflight food and beverage trial.