This reflects the estimated cash flow impact of ongoing travel restrictions including as set out in the airline's announcement in September and the previously communicated repayment of $300m of PAYE which is required in early 2022.
In August the airline, following consultation with the Crown, announced a further deferral of its planned equity raise until the first quarter of 2022.
Since that announcement, the airline has been hit by the recent domestic lockdowns and the ongoing Covid-related travel restrictions across its international network.
The Government last month outlined a plan of phased reopening of borders from early 2022, which, in the airline's view, provides an indicative pathway to reopening New Zealand for international travel.
However, the future impacts of Covid remain uncertain and circumstances continue to change all over the world, the airline told the NZX this morning.
In that context, the airline has been considering its financial support requirements during the period up to a planned equity raising – which the airline is still targeting for the first quarter of 2022 - together with what further support and flexibility may be needed if material and unexpected events were to occur next year that it becomes prudent to consider a further delay to the planned capital raise.
While the airline remains focused on an ordinary equity raise, it is important that the airline has "sufficient flexibility to withstand presently unforeseen delays" without relying entirely on increasing debt levels.
The airline and the Crown have agreed to modify the Government financial support for Air New Zealand and the overall liquidity support for Air New Zealand has increased to $2 billion, as follows:
• Air New Zealand is able to issue up to $1b of redeemable shares to the Crown (Redeemable Shares).
• The existing facility limit under the secured Crown loan facility has been reduced from $1.5b to $1b and the maturity has been extended from September 2023 to January 2026 (Amended Crown Loan).
The terms of the amended Crown Loan and of the redeemable shares have been negotiated between Air New Zealand and the Crown on an arm's length basis with each party having been independently advised.
It is Air New Zealand's intention that all amounts outstanding under the amended Crown Loan and any issued redeemable shares will be repaid from the proceeds of the company's proposed equity raise, together with an aligned debt capital markets transaction.
The Crown has confirmed to the airline that it shares this expectation, said the statement from chair Dame Therese Walsh.
