The company today reported a loss before significant items and tax of $87 million for the year to June 30, compared to earnings of $387 million in the prior year.
In June, it said it was expecting to report an underlying loss of up to $120 million for the 2020 financial year.
Operating revenue was $4.8 billion, down 16%.
The pre-tax loss, including $541 million of other significant items, was $628 million, compared to earnings of $382 million last year. After a tax credit of $174 million, the net loss was $454 million, compared to a net profit of $276 million a year earlier.
Covid-related travel restrictions resulted in a 74% drop in passenger revenue from April to the end of June compared to the prior year, which drove the airline's operating losses, it said.
Cash burn
Cash burn averaged approximately $175 million per month from April to June, including higher than average refunds, redundancy payments and fuel hedge close out costs, but this reduced to $85 million for July.
The airline estimates average monthly cash burn will be in the range of $65 million-to-$85 million while international travel restrictions remain. That assumes the resumption of domestic travel with no social distancing requirements, and the continuation of government-supported cargo flights.
Air NZ's cargo revenue was $449 million, up 15% on the year.
Short-term liquidity as at August 25 was approximately $1.1 billion, made up of cash and the $900 million standby loan facility from the New Zealand government.
Draw down imminent
"Due to the strong cash position pre-Covid-19, swift action taken by management to reduce cash burn and a better than expected return of domestic demand after the initial lockdown was lifted in New Zealand, the airline has not yet utilised the standby loan facility," it said.
However, it expects to start drawing on those funds in the coming days, it said.
Regarding a possible capital raising, the airline said "the board is focused on preserving Air New Zealand's liquidity across a range of potential demand recovery scenarios."
It also said that it is "engaging constructively with the Crown" as it assesses its capital structure and funding needs, noting the Government has recently reaffirmed its long-standing commitment to maintaining its majority shareholding in Air NZ.
It canned the final dividend due to financial pressures as the airline manages the impact of Covid-19.
Another loss coming
The airline said given the uncertainty surrounding travel restrictions and the level of demand as these restrictions lift, it isn't able to provide specific 2021 earnings guidance.
However, all scenarios it is modelling "suggest we will make a loss in 2021."
