Strong domestic activity and cargo revenue have given Air New Zealand confidence to signal a full-year loss of no more than $450 million while also announcing a delivery date for the first of eight new Boeing 787 Dreamliners.
The airline said the operating environment remains challenging and uncertain in respect of timelines for international border reopenings, progress of global vaccination programmes and recovery levels for customer demand.
But it has had positive Ebitda since September 2020 and has been operating cash flow-positive since the second quarter of the 2021 financial year, largely benefiting from the Government's air cargo support schemes, wage subsidies and other aviation relief packages.
The company also said all permanent employees will receive an award of $1000 worth of company shares in recognition of their efforts.
Around 8000 employees will be eligible for the share award, which will be made in the last quarter of this calendar year. This will be available to New Zealand and Australian employees, and as a cash equivalent for those in other global locations.
Air New Zealand chief executive Greg Foran says this means it is more important than ever to ensure Air New Zealand staff are recognised for the work they've done - and will continue to do - as the airline recovers.
"This is the right thing to do given the mahi and sacrifices Air New Zealanders have made to get the airline through Survive and into its Revive phase," Foran said.
"And by awarding shares to our employees, we want them to have the chance to benefit from the future success we will really need their help to deliver.
"I'm immensely proud of the way our people have responded to the Covid-19 crisis. They have risen to the occasion, working hard to keep New Zealand connected and Kiwis safe.
"Some pilots and crew spent more than 100 days in isolation to help reunite thousands of overseas Kiwis with their loved ones. Our cargo team has helped take 100,000 tonnes of New Zealand product to the world. Day in-and-out our people have done, and continue to do, everything they can in challenging and changing conditions to keep our customers safe."
In a trading update this morning Air New Zealand said domestic capacity is now at around 90 per cent of pre-Covid levels. The Tasman market is building following the opening of the transtasman bubble in late April 2021, with capacity at around 70 per cent of pre-Covid levels.
Long-haul international passenger travel remains highly restricted, with passenger volumes currently less than 5 per cent of pre-Covid levels, while international borders remain effectively closed.
Operating cash flow has also benefited from the one-off deferral of around $310m in PAYE payments this year, which will start to be repaid in the 2022 financial year, the company said.
"Air New Zealand expects losses before other significant items and taxation will not exceed $450m for the 2021 financial year."
Foran said the airline is "well-positioned" to capitalise when long-haul international travel demand returns.
"For us this means further strengthening our core domestic business and putting even greater focus on our customer obsession, making sure we understand what our customers truly want from their end-to-end travel journey. It means maintaining the hard-won structural cost reductions made across our business from the outset of this pandemic and ensuring continued cost vigilance," he said.
Air New Zealand has recently renegotiated the delivery date of the first of eight new Boeing 787 Dreamliners, which were ordered in 2019 prior to the outbreak of Covid-19.
The first aircraft was due to enter the fleet in the 2023 financial year, but an agreement has been reached to move the delivery of this aircraft out to the 2024 financial year.
The airline confirms there have been no further drawdowns on the Crown standby loan facility ("the Facility") since the interim results were announced on February 25, 2021.
As such, the total amount drawn down remains at $350m. As disclosed in April 2021, the total available amount under the Facility is $1.5 billion, therefore the company has remaining available funds of $1.15b under the facility.