Air NZ profit plummet

AIR New Zealand has posted a net loss after tax of NZ$454 million for the 2020 financial year, a massive 254.5% slide from the NZ$276 million net profit the carrier recorded during the same period last year.

Operating revenue for the airline also slumped by 16.4% to NZ$4.84 billion, down from the NZ$5.79b posted in 2019, while its overall cash position also took a major hit, dwindling from NZ$1.06 billion to NZ$438 million.

The grim numbers were largely driven by COVID-19-related travel restrictions which pushed down Air New Zealand’s passenger numbers by 74% from Apr to the end of Jun.

The figures were made even more stark by the strong state the airline was in prior to Apr, with the carrier reporting an interim profit of NZ$198m for the first six months of the financial year, as well as seeing early signs of growth for domestic and North American markets.

Air NZ said that despite the profit slump it remained optimistic of a rebound after acting quickly to mitigate the impact of the pandemic, including securing additional liquidity, reducing its cost base, ramping up its cargo division, and deferring capital expenditure projects.

“These actions, along with the strategic review of the airline undertaken in parallel to managing this crisis, ensures that Air New Zealand remains in a strong and competitive position when travel restrictions lift,” said the airline’s Chair Therese Walsh.

The Board also approved a refresh of its strategy, which will now focus on “sustaining competitive strengths”, but declined to provide a specific outlook for 2021 in light of uncertainty around restrictions.