- Joe Breitfeller
Air New Zealand Reports FY21 Pre-Tax Loss Before Significant Items of $440 Million
Air New Zealand has reported a FY21 loss before significant items and taxes of $440 million on a year-over-year decline in operating revenue of 48 percent to $2.5 billion. The carrier has $1.3 billion in liquidity, including $183 million in cash and $1.15 billion in undrawn facility funds.
On Wednesday (August 25, 2021), Air New Zealand reported their financial results for FY21. The airline reported an annual loss of $440 million before significant items and taxation on a 48 percent year-over-year decline in revenue to $2.5 billion. The company’s statutory loss before taxation, including a $29 million gain from other significant items was $411 million. During the year, domestic capacity rebounded, reaching 93 percent of pre-pandemic levels for the three months ending in July. Air New Zealand’s cargo revenue was up 71 percent versus the previous financial year, bolstered by the Australian Government’s IAFC, MIAC and IFAM airfreight support schemes. On August 24, 2021, the airline had $1.3 billion in liquidity including $183 million in cash and $1.15 billion in undrawn funds on the Government standby loan facility.
In Wednesday’s announcement, Air New Zealand’s Chairman, Dame Therese Walsh, said in part,
“In a severely constrained environment, Air New Zealand maintained cost discipline, focusing on delivering with excellence in the areas in its control. The return of a strong domestic business and growth in the cargo services that underpin our key export markets was a reminder of the airline's crucial role in New Zealand's infrastructure. Air New Zealanders showed agility during constantly changing operating conditions, managing reopenings, pauses and then closures while generating new revenue from additional cargo routes and increasing domestic and regional passenger capacity to match an increased demand for domestic leisure travel.
“To keep New Zealand connected to key markets, help Kiwis continue travelling and manage continued disruption to passengers' travel plans, Air New Zealanders have again proven their aroha for customers. From our airport employees and flight crew who are among the most frequently tested groups in the country, to all our other operations and corporate teams across the network who have worked tirelessly behind the scenes to keep our customers and cargo moving, their efforts have been extraordinary.
“These efforts, after 18 months of reduced pay and forfeited incentives, were recognised earlier this year when we announced eligible employees would each be provided with a $1,000 award of shares or cash. With significant uncertainty ahead, including the current lockdown, this was important recognition of the people who give so much to our business.”
Also commenting on the company’s FY21 results, Air New Zealand’s Chief Executive Officer, Greg Foran, said in part,
“Our people developed new capabilities and dexterity, adapting quickly when conditions changed. Although the return of long-haul travel seems some time away, the changes the team made this year will serve us well when it returns. We have reimagined our domestic business, increasing the choice of flight times and introducing greater price differentiation for peak and off-peak flying. This allows us to offer more lower priced fares, which will unlock new demand for domestic tourism.
“We capped fares to ensure travel isn't out of reach when it's needed most, reintroduced the popular Fast Bag service with new features, and improved our unaccompanied minors service to make travel easier for our most valuable cargo and safer for our people. We had fun with our customers, trialing new inflight food and beverage options, made changes – while retaining the much-loved cookie – and will showcase great New Zealand products in the year ahead…”
Air New Zealand will defer their previously announced capital raise from September 30, 2021 until the first calendar quarter of 2022. Additionally, the Government of New Zealand has confirmed their longstanding commitment to maintaining a majority shareholding in the airline, and will participate in the equity capital raise to maintain their majority position. As of August 25, 2021, Air New Zealand had drawn $350 million of the $1.15 billion Government standby loan facility (the Facility), with further drawdowns expected in the coming months. Upon completion of the recapitalization, the company will repay all amounts drawn under the Facility.
Source: Air New Zealand