Air New Zealand has announced a statutory loss before taxation of $376 million for the six-month period ending December 31, 2021.
The airline said operating revenue was nine percent lower than the prior period, driven by a 26 percent decline in passenger revenue due to the COVID-19 alert level restrictions and Auckland lockdown.
Cargo revenue increased 29 percent on the same period last year to $482 million, supported by Government freight support schemes.
Fuel costs increased 14 percent to $174 million for the half year, with the increasing cost of fuel expected to impact the second half.
The total amount Air NZ has drawn down from its loan facility with the Government is $760 million as at February 23.
The airline has liquidity of $1.4 billion as at February 23, made up of approximately $170 million of cash and $1.24 billion of available funds under the remaining Crown facility and redeemable shares.
Air NZ says steps to recapitalise the balance sheet are underway, including an equity capital raise that is intended to be launched by the end of March 2022.
Dividends remain suspended
CEO Greg Foran says limited international travel on top of local lockdowns in the first half of the financial year had a huge impact on this interim result.
"The airline has typically derived two-thirds of its revenue from its international passenger network and much of that was effectively grounded for the majority of the first half."
The airline predicts a loss before taxation and other significant items exceeding $800 million for the full year.
Despite the remaining uncertainty around future travel demand and ongoing impacts on financial performance, Foran can see light at the end of the tunnel.
"We're bringing back approximately 250 cabin crew and pilots and have reanimated one of our Boeing 777-300s to do some of the cargo heavy lifting. Looking further out to the end of this calendar year, we will be ramping up more passenger flights to North America and looking forward to starting up our direct service to New York City."