Air NZ forecasts $120m underlying loss for 2019/20 financial year

Air New Zealand has told the NZ sharemarket that it expects an underlying loss of up to $120 million for the financial year to 30 June.

In an update on its earnings expectations, the company said the 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 Covid-19 pandemic.

It said it was now expecting an underlying operating loss of $120m.

But there are other significant one-off items which will boost the bottom line result.

The company is estimating re-structuring costs, including redundancies, will be between $140 and $160m

It has already disclosed that it expects other costs, including the write-down in the value of aircraft and losses on fuel contracts, which will be partly offset by gains on the sale of its slot at Heathrow Airport and foreign exchange gains.

The airline currently has a $900 million facility from the Crown which has yet to be drawn.

It has shed 4000 jobs across its business, and is looking at further possible redundancies as it looks to cut its wage bill by another $150m.

The carrier has repeated that even by 2022 it will be a third smaller than before the virus.

In its last financial year the airline had underlying earnings of $374m.