Skip to Content
Global News Select

Air New Zealand Says Long-Haul Travel Won't Meaningfully Recover in Next Year — Update

(Adds details)


By Stephen Wright


WELLINGTON, New Zealand--Air New Zealand Ltd. said its losses over two financial years will reach about 900 million New Zealand dollars ($630 million) as the pandemic prevents a meaningful recovery in long-haul international travel in the next 12 months.

The airline on Friday also said it has delayed the first delivery of eight Boeing 787 Dreamliner aircraft it has on order until its 2024 financial year from 2023. It has contractual rights to defer other deliveries scheduled for 2024 onward if needed.

Air New Zealand, which is half-owned by the government, expects a loss before significant items and tax of NZ$450 million for its current financial year and a comparable loss in the subsequent financial year ending June 2022.

"The airline is not expecting any meaningful recovery in long-haul demand in the 2022 financial year notwithstanding the rollout of global vaccination programs and the potential for long-haul borders to begin reopening progressively in the second half of the financial year," it said.

However, the company's trading update characterized the airline as moving out of "survival" mode into a "revival" phase. It said staff salary cuts would be ended from the start of its next financial year on July 1 and all permanent staff would be given NZ$1,000 of the airline's shares in the October-December quarter of this year.

The national carrier said cash into the business from operations has exceeded outgoings since the October-December quarter, helped by New Zealand government backing for international cargo flights and other relief such as wage subsidies, an aviation support package and deferral of tax payments.

Consequently, Air New Zealand's total drawdown of a NZ$1.5 billion government credit facility remains at NZ$350 million. The company said it still expects to raise equity capital before the end of September.

Government financial support for cargo flights is expected to contribute NZ$320 million-NZ$340 million of revenue in the financial year ending June 2021, it said.

New Zealand's success in limiting the spread of Covid-19 within its borders has allowed the airline's domestic capacity and passenger numbers to return to about 90% of pre-pandemic levels.

Quarantine-free travel between Australia and New Zealand since April has resulted in a flight schedule of about 70% of its pre-pandemic level. Long-haul passenger numbers remain at less than 5.0% of normal due to border closures.


Write to Stephen Wright at


(END) Dow Jones Newswires

June 17, 2021 18:08 ET (22:08 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.