Air New Zealand forecasts US$77 million loss for 2020 financial year

Country’s COVID-19 status allows it to restart domestic services but revenues will not recover for years


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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Matthew Driskill is the Editor of Asian Aviation and is based in Cambodia. He has been an Asia-based journalist and content producer since 1990 for outlets including Reuters and the International Herald Tribune/New York Times and is a former president of the Foreign Correspondents Club of Hong Kong. He frequently appears on international broadcast outlets like CNN, Al Jazeera and the BBC and has taught journalism at Hong Kong University and the American University of Paris. Driskill has received awards from the Associated Press for Investigative Reporting and Business Writing and in 1989 was named the John J. McCloy Fellow by the Graduate School of Journalism at Columbia University in New York where he earned his Master's Degree.


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