Air New Zealand has posted another negative full-year result which chair Dame Therese Walsh said reflects the reality of a year in which the airline was unable to fly two-thirds of its passenger network.

The Kiwi carrier suffered a net loss after tax of NZ$289 million ($277.1 million) in the 12 months to 30 June 2021, compared to NZ$454 million ($435.3 million) in FY20.

Ongoing border restrictions saw the airline’s operating revenue decline 48 per cent to NZ$2.5 billion ($2.4 billion) as international flying was significantly reduced, with capacity down 55 per cent on the prior year.

However, Air New Zealand’s cargo flying revenue grew by 71 per cent compared to the prior year thanks to airfreight support schemes.

The airline’s domestic business put in a decent performance, led by strong leisure demand as well as corporate customers flying at close to pre-COVID levels.

Commenting on the FY21 result, Air New Zealand chair Dame Therese Walsh said the airline “maintained cost discipline and focused on delivering with excellence” in the areas within its control amid a “severely constrained environment”.

“The return of a strong domestic business and growth in the cargo services that underpin our key export markets was a reminder of the airline’s crucial role in New Zealand’s infrastructure,” she said.

“Air New Zealanders showed agility during constantly changing operating conditions, managing reopenings, pauses and then closures, while generating new revenue from additional cargo routes and increasing domestic and regional passenger capacity to match an increased demand for domestic leisure travel.”

Air New Zealand chair Dame Therese Walsh

Walsh also paid tribute to the continued commitment and sacrifice of the Air New Zealand team.

“To keep New Zealand connected to key markets, help Kiwis continue travelling and manage continued disruption to passengers’ travel plans, Air New Zealanders have again proven their aroha for customers,” she said.

“From our airport employees and flight crew who are among the most frequently-tested groups in the country, to all our other operations and corporate teams across the network who have worked tirelessly behind the scenes to keep our customers and cargo moving, their efforts have been extraordinary.

“These efforts, after 18 months of reduced pay and forfeited incentives, were recognised earlier this year when we announced eligible employees would each be provided with a NZ$1,000 award of shares or cash. With significant uncertainty ahead, including the current lockdown, this was important recognition of the people who give so much to our business.”

Air New Zealand CEO Greg Foran said the 2021 financial year was one in which the airline played the hand it was dealt, kept planes flying every day and took some important steps in the delivery of its refreshed strategy, ‘Kia Mau’.

“Our people developed new capabilities and dexterity, adapting quickly when conditions changed,” he said.

“Although the return of long-haul travel seems some time away, the changes the team made this year will serve us well when it returns.

“We have reimagined our domestic business, increasing the choice of flight times and introducing greater price differentiation for peak and off-peak flying. This allows us to offer more lower-priced fares, which will unlock new demand for domestic tourism.

“We capped fares to ensure travel isn’t out of reach when it’s needed most, reintroduced the popular ‘Fast Bag’ service with new features, and improved our unaccompanied minors service to make travel easier for our most valuable cargo and safer for our people.

“We had fun with our customers, trialling new inflight food and beverage options, made changes – while retaining the much-loved cookie – and will showcase great New Zealand products in the year ahead.”

Air New Zealand CEO Greg Foran

Foran said the airline also took meaningful steps towards its goal of net-zero emissions by 2050.

“With almost daily reminders of the impact of climate change, we are supporting the development and deployment of electric, hybrid and hydrogen aircraft for domestic use, and engaging and collaborating with others in the private sector and the government to make sustainable aviation fuel (SAF) supply a reality in New Zealand,” he said.

“We also made some exciting enhancements to our Airpoints loyalty program, adding more store partners, improving access to upgrades and increasing the ability to share benefits among family and friends.

“Strategic digital investments towards our goal of being ‘the world’s leading digital airline’ included equipping our turboprop aircrew with devices to replace paper-based systems, introducing a new supply chain management system and improving self-serve options for customers to use credits and manage bookings.”

The Air New Zealand boss also acknowledged the ongoing uncertainty in the airline’s operational and financial performance, particularly given the latest COVID-19 cases in New Zealand and subsequent lockdown.

“More than ever, this is a time to look after our people who continue to deliver those essential services, keeping cargo moving and getting Kiwis back home,” he said.

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