Air NZ warns of significant loss in 2021 as pandemic bites

Air New Zealand Thursday posted am H1 pretax loss of NZ$185m ($136.97m) and forecast a significant loss for 2021 due to a sharp fall in travel associated with the coronavirus pandemic. The airline has benefited from a recovery in domestic travel due to New Zealand’s near-eradication of COVID-19. However, its international border remains closed and a two-way travel bubble with neighbouring Australia is yet to be approved. New Zealand’s flag carrier said its domestic capacity was running at around 76% of pre-pandemic levels, helped by robust local tourism and return of business demand during the first half. “The airline remains optimistic about the future, and, after making both short and long-term changes to the business to lower the cost base, is well positioned for recovery when demand returns,” CE Greg Foran said. Air NZ did not provide an earnings guidance range for 2021, citing uncertainty around the lifting of travel curbs, but said it will make a “significant loss” despite strong domestic and cargo performance. It expects to burn around NZ$45m to NZ$55m of cash for the remaining five months of fiscal 2021, lower than the average of about NZ$79m a month from September 2020 to January 2021. <br/>