Air New Zealand reports USD 77 million full-year underlying loss

- A Monitor Desk Report 18 Jun, 2020 | 458 Views|-+
Dhaka: Air New Zealand expects to report an underlying loss of up to NZD 120 million (USD 77 million) for the financial year ending June 30.

“The New Zealand government’s recent move to Alert Level 1 has enabled the airline to slowly restart the domestic network, however revenue and earnings are significantly lower than expected prior to the outbreak of COVID-19”, the company said in a disclosure to New Zealand Exchange on June 18.

This figure, for underlying loss before other significant items and taxation, does not account for any changes to fuel price for the rest of June and currency fluctuations for the entire month, though Air New Zealand does not expect these to be material given reduced flying activity.

At current exchange rates, the company expects to recognise a NZD 70 million non-cash gain within significant items during FY 2020.

Other significant items that will impact the airline’s financial results are unchanged from its previous disclosure on May 26.

Air New Zealand expects to book a non-cash aircraft impairment charge of NZD 350-400 million, which it previously stated relates to some of its Boeing 777 aircraft. It expects to gain approximately NZD 21 million from the sale of airport slots.

Reorganisation costs could come up to NZD 140-160 million, versus a NZD 13 million estimate in the interim financial results released on 27 February. Full-year losses on hedges are estimated at NZD 85-105 million.

The company anticipates a NZD 46 million non-cash charge arising from the disestablishment of fair value hedges, an estimate unchanged from interim results.

Air New Zealand on March 9 withdrew its FY 2020 earnings guidance of NZD 300-350 million, due to significant uncertainty around the duration, scale and impact of the global coronavirus outbreak.

This had been disclosed on February 24, with an estimated NZD 35-75 million impact from the pandemic, and revised downwards from an earlier, January 28 guidance, of NZD 350-450 million.

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