Air NZ draws down $110m of Govt loan
AUCKLAND: Air New Zealand has tapped into $110 million of a near billiondollar Government loan over the past month.
Chairwoman Dame Therese Walsh said with travel restrictions still in place, the outlook for the airline remained uncertain.
‘‘We know that Air New Zealand will continue to be a smaller business for some time to come. Although a month has now passed since we announced our annual results, a high degree of uncertainty still remains,’’ she said at the company’s annual meeting.
Air New Zealand booked a $454 million aftertax loss in the year to June 30, its first fullyear loss since 2002. The airline went from flying 330,000 passengers a week last year to just 8000 during the April lockdown.
Given the uncertainty surrounding travel restrictions and the level of demand as these restrictions lift, Dame Therese said the airline was not able to provide specific 2021 earnings guidance.
‘‘However, each of the scenarios we are currently modelling suggest we will make a loss in 2021.’’
She told the virtual meeting that its available liquidity as at September 25 was about $1 billion, comprising $215 million of cash on hand and $790 million remaining on the Crown standby loan facility.
The loan, negotiated in March was for $900m with an interest rate of between 7% and 9%.
She said the airline would draw down it as necessary in order to reduce interest charges
Chief executive Greg Foran emphasised the cloudy future for the airline.
‘‘One thing I would like to be really clear on however, is that there is still a huge degree of uncertainty, both in terms of how long this crisis will continue, and what the landscape will look like when we do emerge from Covid19.’’
He said the costcutting actions it had taken were based on a range of scenarios that were necessary to ensure Air NZ could pivot its business and planes quickly to those routes that make sense in ‘‘the new world order’’.
Mr Foran said staff across the entire business had made significant personal sacrifices, with more than 3500 people losing their roles, over 600 staff taking voluntary exit, and almost 400 significantly reducing their work hours.
This was all to ensure that Air New Zealand emerged strongly from this crisis.
Mr Foran said that during the last eight months every stakeholder had been impacted significantly by Covid19.
From customers dealing with constantly changing travel plans and trying to access their flight credits, to employees who have worked through some of the most onerous and complex operating conditions in history; to shareholders with no dividend payment this year, he said.
‘‘This has been a total company fight; everyone is contributing, and everyone has been impacted.’’
Dame Therese said assuming there were no further material adverse developments, the company was expecting to complete the strategic capital structure review by early 2021 and be in a position to proceed with capital raising to be completed before June 2021. — The New Zealand Herald
❛ . . . each of the scenarios we are currently modelling suggest we will make a loss in 2021
Dame Therese Walsh