Airways has slumped to a $13.8 million loss for the six months ending December 31, 2020.
This compared an after-tax profit of $16.2m for the same period the previous year for what pre-Covid had been a fast-growing aviation sector where Airways is a monopoly supplier for airlines.
The air navigation services provider says despite domestic air traffic levels improving more quickly than expected from July to December in 2020 - reaching 80 per cent of pre-pandemic levels by the end of the period- this reduced traffic combined with limited international flights meant 56 per cent of pre-pandemic revenue.
Chief executive Graeme Sumner said the result reflect the Covid-19 driven challenges currently facing the aviation industry.
Last week Air New Zealand reported heavy half-year losses and profit at Auckland Airport had plunged.
"While the domestic market is showing encouraging signs of recovery, our core revenue streams continue to be significantly affected," Sumner said.
"Any marked improvement for Airways will come as international travel recovers, and this is forecast to still take some time even with the arrival of Covid-19 vaccines."
The state owned enterprise embarked on a cost-cutting drive, including reviewing roles, soon after the pandemic hit air travel but in its interim report it says the stronger than expected recovery of the domestic market has placed a halt on some of the planned restructuring programmes.
Closing some towers is still possible.
Alongside affected airports and the Civil Aviation Authority (CAA), in May last year Airways
started a review of the air traffic services it provides at seven regional airports where flight volumes have been low for a sustained period.
Those under review are the air traffic control services provided from Airways' towers at Hawke's Bay, Gisborne, New Plymouth, Rotorua and Invercargill airports, and the airfield flight information services provided at Kapiti Coast Airport
and Milford Sound Piopiotahi Aerodrome.
The CAA will ultimately decide what level of service is required for each airport to operate safely and airports were expected to have submitted aeronautical studies to the authority by the end of last month.
Airways and the airports would then need to negotiate commercial terms for providing the
Last September Airways announced a $31.3 million loss for the year ending June 30, down 233 per cent on the previous 12 months.
The group result includes a $48.7m impairment of the asset base.
Sumner said Airways maintained its solid safety record over the six months, with no near-collision events in controlled airspace and no serious harm injuries involving our people.
"Credit for this must go to our people who have shown a great deal of resilience in continuing to carry out their roles to the highest standard despite the uncertain times we've found ourselves in," he said.
Airways' capital investment programme remains constrained with only investments in systems and technology that have been identified as being critical to maintaining safe services able to go ahead.
"Other important initiatives like our digital tower and technologies development programme remain a priority for our future, but it is necessary for them to be put on hold for now," Sumner said.
Airways International Limited (AIL) has continued to be been less affected by the Covid-19 crisis, achieving an after-tax profit of $2.7m for the half-year.
AIL is the commercial arm of Airways that delivers air traffic management consultancy services, training, and technology products worldwide.