15.8 C
Thursday, September 28, 2023

Air New Zealand announces $1.5B plan to rebuild finances ahead of border opening

- Advertisement - Booking.com
- Advertisement -spot_imgspot_imgspot_imgspot_img

Air New Zealand has comprehensive strategies in place to generate funds and strengthen its finances in order to assist it to recover and capitalize on a predicted increase in travel once New Zealand’s borders are opened.

New Zealand’s decision to close its borders in March 2020, as the COVID-19 epidemic ravaged the globe, hit the carrier hard. Passenger revenue is still under 20% of pre-crisis levels, according to Air New Zealand.

The airline announced on March 30, 2022, that it will launch a recapitalization package worth NZD2.2 billion ($1.5 billion), which will include a NZD1.2 billion ($836 million) rights issue, a NZD600 million ($418 million) capital market debt offering, and a NZD400 million ($279 million) loan from the New Zealand government. The New Zealand government will participate in the rights issue, retaining a majority interest of roughly 51 percent after the event.

“While there will still be bumpy skies ahead over the next few years, the moment is right for Air New Zealand to raise equity, recapitalize its balance sheet and repay the loan it received from the Crown during the Covid crisis,” Air New Zealand Chair Dame Therese Walsh said in a stock exchange statement. “This is an important step in refueling for our recovery.”

New Zealand’s government announced intentions earlier this month to open its borders to visitors in order to bolster the economy. Vaccinated tourists from visa-waiver nations such as the UK, Germany, and the United States will be able to arrive from April 12 to May 1.

In the short period since the announcement, Air New Zealand has seen “some positives,” but cautioned that there is still a lot of uncertainty. Bookings for trans-Tasman and North American flights, including its direct New York service, have been brisk, while bookings for Asia and Pacific Island destinations have been slow.

Nonetheless, Air New Zealand said it now expects a somewhat better financial outcome this year than originally expected.

It now forecasts a full-year loss of less than NZD800 million ($557 million) before taxation and other important factors, down from a previous forecast of more than NZD800 million. However, losses will persist until 2022, however, the size will be determined by the restoration of travel demand, according to the airline.

Overall, Aviation New Zealand expects international air travel to steadily recover until 2025 when it expects capacity to be back to 90% of pre-crisis levels. By then, the airline expects profits to have recovered to pre-pandemic levels.

- Advertisement -spot_imgspot_imgspot_img
Latest news
- Advertisement - Get a .com now from $4.99*/yr with GoDaddy!
- Advertisement -
- Advertisement -spot_imgspot_imgspot_imgspot_img
- Advertisement -spot_imgspot_imgspot_imgspot_img
Related news
- Advertisement -spot_img


Please enter your comment!
Please enter your name here