Air New Zealand has drawn down $72 million of government loan

(Reuters) – Air New Zealand Ltd AIR.NZ said on Tuesday it had drawn down NZ$110 million ($72.20 million) of a NZ$900 million government loan facility to date as it shored up liquidity to help weather the coronavirus pandemic.

The airline reiterated that it expected to report a second consecutive annual loss in the financial year ending June 30, 2021, and that it was not able to provide earnings guidance.

“With the outlook for future passenger demand clearly uncertain, and highly dependent on the removal of travel restrictions both here in New Zealand and globally, we know that Air New Zealand will continue to be a smaller business for some time to come,” Chairman Therese Walsh said at the airline’s annual meeting, webcast from Auckland.

Chief Executive Greg Foran said the airline’s strategic plans included refreshing its loyalty programme and improving its digital technology and tools.

Air New Zealand said it had about NZ$1 billion of liquidity, made up of NZ$215 million of cash on hand and NZ$790 million remaining on the government loan facility. The airline forecast it would burn through NZ$65 million to NZ$85 million of cash a month under current conditions.

The airline last week said it had begun to draw down on the government debt, which would give it time to review its capital structure and complete a capital raising by June 2021.

Air New Zealand this month said it aims to cut up to 385 more cabin crew jobs because of the lack of long-haul international flying, which would take its COVID-19 related job losses to about 37% of its workforce, a higher proportion than rivals Qantas Airways Ltd QAN,AX and Singapore Airlines Ltd SIAL.SI.

($1 = 1.5235 New Zealand dollars)