Air NZ forecasts losses up to $530m with trans-Tasman bubble impact

Author
NZ Herald,
Publish Date
Wed, 4 Aug 2021, 11:55AM
(Photo / Getty Images)
(Photo / Getty Images)

Air NZ forecasts losses up to $530m with trans-Tasman bubble impact

Author
NZ Herald,
Publish Date
Wed, 4 Aug 2021, 11:55AM

Air New Zealand has revised its earnings forecast to reflect the impact of the suspension of the transtasman travel bubble.

The national carrier says it now expects losses will not exceed $530 million for the 2022 financial year, assuming a fuel price of US$78 per barrel.

The company previously stated, as recently as June 18, 2021, that it expected losses in 2022 to be similar to the $450 million reported in the 2021 financial year.

The outbreak of Delta variant of Covid-19 in Australia has led to a full suspension of the transtasman travel bubble for eight weeks from late July.

The airline said it continues to assess the impact of this suspension as well as the risk of future suspensions, amid the ongoing challenges posed by the pandemic.

In its statement posted to the NZX this morning, the airline said that operating cashflow had reduced and that it now expects to draw down further on the Crown standby loan facility before the end of August 2021.

The airline, which has thus far withdrawn $350m from the loan facility, last drew on it in February 2021.

The total available amount under the loan facility is $1.5 billion.