Air New Zealand, the country’s flag carrier, said on Thursday (18 June) that it expects to lose up to NZ$120 million (US$77.2 million) by the end of its 2020 financial year which ends on 30 June. The airline, like others around the world, has been hit hard by the COVID-19 pandemic and the near total shutdown of international aviation.
The company said the “underlying earnings guidance excludes the impact of fluctuations in foreign currency rates for the month of June, as well as any fuel price changes for the remainder of the period, which are not expected to be material given the reduced level of flying”.
The carrier also said the New Zealand government’s recent move to Alert Level 1 has enabled the airline to slowly restart its domestic network, but that revenue and earnings “are significantly lower than expected prior to the outbreak of COVID-19”.
In addition to the $120 million underlying loss, a number of other significant Items will impact the 2020 financial results. The company said it would also incur a NZ$13 million charge in “reorganisation costs” and a NZ$46 million non-cash charge for “disestablishment of fair value hedges”. Another more significant charge the company will recognise is up to NZ$450 million in aircraft impairment charges.
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