Losses mount for virus-hit Air New Zealand

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Air New Zealand said it had experienced "the most challenging year in the airline's 80-year history"

Air New Zealand posted a NZ$72 million ($53.4 million) half-year loss Thursday and warned the airline was poised to plunge further into the red as the coronavirus pandemic continues to cripple international travel.

The flag carrier, which is majority owned by the New Zealand government, said the loss in the six months to December 31 compared to a NZ$101 million profit over the same period in the previous year.

Air New Zealand said it had experienced "the most challenging year in the airline's 80-year history" and there was little prospect of short-term relief.

"Despite strong domestic and cargo performance, the scenarios we are currently modelling suggest we will make a significant loss in 2021," it said.

It reported that increased cargo flights and the relative strength of the domestic business were not enough to offset the dive in demand caused by the global shutdown of borders to international travellers.

Overall operating revenue fell 60 percent to NZ$1.23 billion during the half year, with cargo the best performer up 91 percent to NZ$373 million.

Labour costs fell 42 percent to NZ$681 million after a virus-related redundancy programme that resulted in the loss of more than 4,000 jobs.

Air New Zealand said domestic capacity was running at 76 percent of pre-coronavirus levels, fuelled by high demand in a country which has no internal travel restrictions because the virus is largely contained.

"The strong recovery in domestic travel has been really exciting because it shows that when people have confidence to travel, they will," it said.

"With the roll out of the vaccines underway around the world and here in New Zealand, this has positive implications for our recovery when borders open."

ns/dn/bfm