Airways NZ has tumbled to a $31.3 million loss for the year ending June 30, down 233 per cent on the previous 12 months.
The state-owned enterprise said the impact of Covid-19 travel restrictions from March saw a dramatic decline in air traffic levels and Airways' core revenue streams.
The group result includes a $48.7m impairment of the asset base.
Airways chief executive Graeme Sumner said Covid-19 has been an unprecedented shock to aviation.
Airways' response to the pandemic has been to maintain safe operations, while taking "prudent" measures to manage costs.
"This has included a pay freeze and cancelling performance incentives for senior staff, and reducing headcount. In addition to cutting operating costs, Airways has reduced capital expenditure to $38.6m, from a budgeted spend of $75.6m.
In the year to June 30 there were 822,662 air traffic movements compared to 998,783 movements the previous year but this included less than four months of the impact of the pandemic.
Sumner said industry recovery was highly uncertain.
Current forecasts indicate air traffic levels may only reach 50 per cent of pre-pandemic levels by mid-2021 and Airways does not expect to be back to profitability until at least 2023.
"With revenue limited and air traffic levels not expected to pick up for some time, we can only progress with investments in systems and technology that are critical to maintaining aviation safety," he said.
The company had put longer-term projects on hold, including the development of drone detection technology and digital air-traffic control towers."
In March Airways got a $70m equity injection as part of the Government's Aviation Relief Package.
Due to the ongoing uncertainty surrounding the recovery of the industry, in August the Government provided Airways with an additional $95m uncalled capital facility, available through to the end of the 2022 financial year.
Its annual report has details of breaches of its banking covenants which led to more Government support.
The group breached two of its three banking covenants in June.
This resulted in the outstanding debt facilities being classified as current debt in the balance sheet.
''It is forecasted the Group will continue to incur losses during the financial year ending 30 June 2021 and the financial position of the group will further deteriorate from cash outflows used in operating activities.''
The ANZ also granted the group a waiver of a breach of current and future covenants until December 31.
Airways has also been paid close to $9m in wage subsidies.
Airways' board chairwoman Denise Church says the SOE appreciated this government support, which "ensures we can keep essential aviation services running safely.
"But unfortunately it cannot realistically offset the revenue shortfall we will continue to experience for the foreseeable future."
In May, Airways announced plans to review its services provided from seven regional airports, where air-traffic levels were low even prior to the pandemic.
A "robust" process was now underway whereby independent aeronautical studies will examine and make recommendations on the airspace and operations at each airport.
The Civil Aviation Authority will then determine what air-traffic management services, if any, are required.
Air traffic volumes declined by 95 per cent following the implementation of travel restrictions in March, although domestic movements have recovered slowly.
Airways subsidiary Airways International Limited (AIL) has been less affected by the crisis, continuing to win new business even after the national level 4 lockdown. AIL is the commercial arm of Airways that delivers air-traffic management consultancy services, training, and technology products worldwide. It has delivered a net profit after tax of $9.1m.
The most significant of the deals signed since the lockdown is a five-year contract with Norwegian air-navigation services provider Avinor Air Navigation Services to install 16 Total Control tower, surveillance and mobile simulators over five years.