- Air NZ announced it is on the path to recovery.
- The airlines expects earnings to be in the range of NZ$200-NZ$275 million in FY23.
- Air NZ shares were trading in green at the time of writing this.
Shares of Air New Zealand (NZX:AIR) opened higher on Thursday as the national carrier of the country announced that it was in recovery mode. At its Annual Shareholder Meeting, the company said that it had begun to recover despite CY22 being a year of highs and lows for the airline.
Air NZ said that it was on the path to recovery with a NZ$2.2-billion recapitalisation as the country’s borders reopened to the world. It has started flying back to most of its international ports and added a new service to New York on 17 September.
Chairman of AIR, Dame Therese Walsh, said that even though there was some uncertainty ahead due to challenging macroeconomic conditions, the demand for travel was picking up pace.
FY22 financial performance
For FY22, the Company reported an operating revenue of NZ$2.7 billion, and a loss before other significant items and taxation of NZ$725 million. The company’s statutory loss was NZ$810.
As per the company, it suffered a 100-day loss between August and November 2021 due to the impact of the Delta variant in NZ. After that, the Omicron variant also impacted the domestic network. This, together with the rising cost of fuel and inflationary pressure on the cost base, contributed to the financial loss for the year.
However, cargo was the main contributor to the revenue, delivering NZ$1.0 billion, as per Air NZ. The liquidity position of the airline as on 20 September was NZ$2.4 billion, consisting of NZ$2 billion in cash and NZ$400 million of available funds on the unsecured loan facility with the Crown.
In its release on the NZX, the Company also revealed an uptick following the phased reopening of NZ borders. The figures improved from March onwards since travel restrictions started to lift. It said, bookings at present in the domestic network are almost at 105% of pre-COVID-19 levels, and corporate bookings continue to trend towards pre-COVID-19 levels. On the international circuit as well, the company has recovered almost three quarters of the 2019 levels, the company said.
Air NZ’s FY23 Outlook
While revealing the outlook for FY23, the company said that forward sales continued to be strong and it expected earnings to be in the range of NZ$200 million to NZ$275 million. However, the airline refrained from providing its full-year guidance this time citing uncertain economic environment and inflationary pressures on cost.