The relaxation of strict border regulations and the increase in the number of people in the air are starting to have a significant impact on Air New Zealand’s bottom line. The Auckland-based airline said late last week that it would lose less money than it had forecast earlier this fiscal year. Air New Zealand posted a NZ$800 million loss in the 12 months to 31 March 2023. They are now reviewing this amount to NZ$750 million (US$475 million).
Reopened borders mean more passengers and more revenue for Air New Zealand
New Zealand now allows its citizens to come and go freely, provided they are fully vaccinated. The country has also reopened its borders to travelers from around 60 countries and will start welcoming everyone else by early August. Air New Zealand typically earns two-thirds of its revenue from international flights, so two years of closed borders has significantly reduced the airline’s operations and financial performance.
“The airline continues to actively book passengers for short-haul and international flights after the opening of the border with New Zealand. Domestic demand has also improved in recent weeks, with business-related demand returning to around 90% of pre-COVID levels.” update on the New Zealand Stock Exchange on Friday said. “The airline currently expects its FY 2022 result to be a loss before other material items and taxes of less than $750 million.
“The airline remains mindful that the macro environment remains uncertain due to disruptions caused by the impact of COVID options, ongoing travel restrictions in some markets, and the ongoing conflict in Ukraine that is fueling high prices for jet fuel.”
Many of Air New Zealand’s key international markets have reopened to travelers. Photo: Getty Images
Air New Zealand long-haul routes begin to recover
Friday’s announcement was the second time this year that Air New Zealand has cut its forecast loss. Earlier this year, the airline posted a loss in fiscal 2022 of more than NZ$800 million. In March, when publishing interim financial results for fiscal year 2021, Air New Zealand said it would have a loss for fiscal year 2022 of about $800 million. Friday’s announcement reduced that figure by another $50 million.
Air New Zealand’s key Australian market is open to fully vaccinated travelers, and traffic on routes between the two countries has picked up, pumping much-needed dollars into Air New Zealand’s coffers. Elsewhere, there are signs of life on these lucrative long-distance routes to and from Auckland.
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