Join our daily newsletter At The Bell to receive exclusive market insights
- Air New Zealand (AIZ) is expecting a loss of NZ$120 million (approximately A$113 million) for the 2020 financial year
- While restrictions in New Zealand ease and air travel begins to ramp back up, the changes won’t be enough to save the flagship airline from a major revenue nosedive
- The loss is vastly due to suspensions brought about by the NZ travel ban, used to impede the effects of COVID-19
- In addition to the loss, other significant items will also impact the financial results
- These include fuel hedging de-designation, aircraft impairment charges and reorganisation costs
- Air New Zealand has dropped 4.28 per cent on the market this morning and is selling shares for $1.46 each
Air New Zealand (AIZ) is expecting “significantly lower” revenue for the 2020 financial year, due to the pandemic.
As the end of the financial year is looming, the company is expecting to report a loss, before tax and other significant items, of NZ$120 million (approximately $113 million).
“The New Zealand Government’s recent move to alert level one has enabled the airline to slowly restart the domestic network, however, revenue and earnings are
significantly lower than expected prior to the outbreak of COVID-19,” the company told the market.
This underlying cost excludes the impact of fluctuations in foreign currency rates and fuel price changes for the remainder of June.
In addition to the loss, other significant items will also impact the financial results.
New Zealand’s flagship airline has also felt the impact of between NZ$85 million and NZ$105 million (around A$79.65 million to A$98.40 million) from fuel hedging de-designation.
Additionally, it expects to face aircraft impairment charges of between NZ$350 and NZ$450 million (about A$327.99 million to A$421.70 million), and reorganisation costs of up to NZ$160 million (roughly A$149.94 million) in the full financial year.
Air New Zealand has dropped 4.28 per cent on the market this morning and is selling shares for $1.46 each at 10:09 am AEST.
