Air New Zealand reports $87 million loss for 2020 financial year, first loss in 18 years

Air New Zealand has today announced an $87 million loss for the 2020 financial year, its first loss in 18 years.

The loss is a stark contrast to the year prior, when the national airline posted earnings of $387 million, and affirms the Covid-19 pandemic's impact on its operations.

Covid-related travel restrictions resulted in a 74 per cent drop in passenger revenue from April to the end of June compared to the prior year, which drove the airline’s operating losses.

The results come despite Air New Zealand seeing a strong interim profit of $198 million reported for the first six months of the financial year.

Air New Zealand’s chairman, Dame Therese Walsh, says she is proud of the way the business has responded to this crisis. 

“The 2020 financial year has been a year of stark contrast. Air New Zealand had a solid start to the year and was focused on driving profitable growth into the second half.

"Covid-19 threw many future plans out the door for the airline, including preparations to launch the first ever non-stop link between New Zealand and New York and several exciting innovations in the customer experience space.

“Now, nearly six months following the declaration of a global pandemic, the $87 million loss we are reporting today, our first loss in 18 years, reflects the quick and severe impact Covid-19 has had on our business,” she says.

Air New Zealand chief executive Greg Foran says he believes the company is "better positioned" for recovery than many of its airline peers.

“But given the restructuring and consolidation we had started to see within the global aviation industry, we need to be hyper vigilant and protect our core competitive advantages," he says. 

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"It is clear that Covid-19 is unlike any other crisis the aviation industry has experienced and we will need to be more nimble than ever as borders reopen."

Looking ahead to 2021, the airline says it is unable to provide specific earnings guidance given the uncertainty surrounding travel restrictions and the level of demand as these restrictions lift.