No need to guess anymore at how bad things are for Air NZ, the full year results have just told us exactly how grim it is. 

Thanks to Covid, it’s lost up to 95% of its revenue.  It’s posted its first loss in nearly 20 years: $454 million in the red. 

It’s not going to get better soon. The airline’s predicting a loss next year as well.  And worse still, it’s running out of cash.  This is what will be stressing out the executives. 

The trouble is, if Air NZ was in charge of its own destiny it could actually save itself by finding cash.  But it’s not in charge.  Cabinet is. And Cabinet is not letting the bosses of that company do what they need to do. 

From the sounds of things, the bosses at Air NZ are desperate to get more cash by issuing and selling more shares to the stock market.  Other airlines have done it: Qantas, Cathay Pacific, United Airlines, Singapore Airlines, the list goes on. 

But Cabinet won’t let Air NZ do it too.  Politics is getting in the way here. 

NZ First won’t agree to it because it wants more government control of the company, so it basically wants to take over more than just the 52% the crown owns, and Grant Robertson won’t agree because he’s already given Air New Zealand permission for a big loan as a last resort. 

But here’s the thing. That $900 million dollar loan comes with interest rates none of us would pay.  We are paying as low 2-point-something percent on our mortgages and Air NZ would be forced to pay up to 9 percent on that loan. 

If they are forced to dip into that money, they will end up with repayments so high they’ll have to lay off more staff. 

How can they expect to recover and get those planes in the air for us again if they don’t have the staff? 

Maybe, a few months ago, Air NZ might’ve hoped it could hold on until after the election, maybe with the hope things would change enough politically to give them permission to raise cash some other way.  But the election’s been pushed out… and maybe two and a half to three months’ worth of cahs in the bank just isn’t enough. 

If you listen to the CEO Greg Foran today, they are still in deep discussions with the government about that loan.  Maybe ‘deep discussions’ is code for begging: maybe begging for a better interest rate, maybe begging to be allowed to get money some other. 

Either way, that is a company we are so proud of as a country.  It shouldn’t have to beg for permission to save itself and its staff.