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Air NZ to make significant loss despite $1.5b in cash and reserves

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Air NZ to make significant loss despite $1.5b in cash and reserves

Air New Zealand is set to make a significant loss because of the Covid-19 pandemic, but has more than $1.5 billion in cash and reserves.

The airline said in a statement to the stock exchange it had had little revenue over the past six weeks under the level 4 and 3 lockdowns, which forced it to cut capacity by 95 percent.

It made no precise forecast of the size of the loss. Last year its profit before tax and interest was $374 million.

“We have not yet needed to draw down on the government loan facility, as we continue to utilise all available levers to reduce our cash burn and right-size the business to reflect the expectation that, for some time, our airline will be smaller than it was pre Covid-19,” Chief Financial Officer Jeff McDowall said.

He said the airline had $640m in short term funds, which along with the $900m government loan, meant it was well financed.

Since the pandemic hit the global tourism and travel market the airline has moved to cut its workforce. It is in the process of making about a third or 4000 jobs redundant and already announced significant losses of cabin crew, pilots, engineers, and ground staff.

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