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Air New Zealand struggling at the mercy of COVID-19

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3 years ago

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New Zealand’s national carrier is feeling the pinch from lockdowns, travel route shutdowns and restrictions on the aviation sector

Air New Zealand is operating at less than one-third of its usual domestic capacity due to the tough restrictions in Auckland and doubts whether a travel bubble with Australia will reope.

According to the airline’s CEO, operations outside of Auckland are running at full speed, but with the major city equating to two-thirds of the domestic network, the financial hit is huge.

“We’re running almost 100% outside of Auckland,”

Air New Zealand CEO Greg Foran

Foran says that current COVID restrictions within Auckland are having a “pretty significant impact to our business.”

Covid-19 Level 3 – Air New Zealand A321-20 aircraft parked up on the tarmac, at Auckland International Airport, Auckland, during the Covid-19 Level 3 Lockdown, Auckland, New Zealand. 07 May 2020 photograph by Brett Phibbs NZH 08May20 – Air New Zealand A321-20 aircraft parked up on the tarmac. Photo / Brett Phibbs NZH 17Jul20 – The Government won’t look at any Air NZ capital raise proposals unti post-election. Photo / Brett Phibbs NZH 28Jul20 – Air NZ and the Government are working together to limit the numbers arriving. Photo / Brett Phibbs NZH 31Jul20 – RGP 30Oct20 – Air New Zealand has cut close to 4400 jobs this year. Photo / File WGP 30Oct20 – Air New Zealand has cut close to 4400 jobs this year. Photo / File BTG 30Oct20 – Air New Zealand has cut close to 4400 jobs this year. Photo / File NAG 30Oct20 – Air New Zealand has cut close to 4400 jobs this year. Photo / File

The major financial losses:

Air New Zealand stated that it is burning through around NZ$25 million to NZ$35 million of cash a month due to the lockdown in the country’s largest city, which the government says will be scaled back in phases as vaccination rates rise.

New Zealand was one of a handful of countries around the world that brought COVID cases down to zero, sticking to an eradication strategy. The delta variant however proved too much.

The closure of a quarantine-free travel bubble with Australia is costing the Air New Zealand a further another $20 million to $25 million a month in cash burn.

The airline’s CEO said it was possible the New Zealand government would treat Australia like any other country in the future when it came to testing and quarantine rules, as is being done now.

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