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Air New Zealand and Qantas Look Beyond Losses to Future Competition
Air New Zealand and Qantas announced their full-year financial results for 2021-22 on Thursday with both airlines reporting a third straight loss. Both Air New Zealand’s and Qantas’ fiscal years are from July 1 through June 30.
The Kiwi flag carrier posted a loss ‘before other significant items and taxation’ of 725 million New Zealand Dollars ($451 million), compared to a figure of 444 million New Zealand Dollars in the 2020-2021 financial year. The figure is in line with the projections Air New Zealand offered the share market and comes after a particularly disruptive 12-month period due to the ongoing impact of Covid-related challenges and repressive travel restrictions for most of the reporting year.
In a video, to shareholders and customers, Air New Zealand Chair Dame Therese Walsh and Chief Executive Officer Greg Foran acknowledged the challenges the airline faced and continues to face.
Foran said, “For customers, we’ve been focused on restoring services, maintaining a choice of fares and launching innovations to improve their journey with us. For our amazing staff, we have provided one-off awards to acknowledge their continued extra mahi (work), and for our communities, we’ve been obsessed with operational performance, which drives the reliable services they depend on.”
However, the airline appears firmly focused on looking forward to the upcoming launch of a non-stop service from its Auckland base to New York’s John F. Kennedy International Airport in September and the relaunch of flights to Chicago in October. The airline will have a nine-month monopoly on the former route until trans-Tasman rival Qantas begins flights between New Zealand’s and the United States’ largest cities to the same airport in June 2023.
The announcement that Qantas will compete with Air New Zealand on what will become the Kiwi carrier’s flagship route — with NZ1 and NZ2 flight designators — came on the day the Aussie airline announced an “Underlying Loss Before Tax” of 1.86 billion Australian Dollars ($1.3 billion). This compares to a figure of 1.83 billion Australian Dollars for the 2020-2021 financial year.
Qantas Group Chief Executive Officer Alan Joyce, said, “This result takes the Statutory Loss Before Tax impact of COVID on the Qantas Group to nearly 7 billion ($4.88 billion) and our total revenue losses to AU$25 billion ($17.43 billion). These figures are staggering and getting through to the other side has obviously been tough.”
Mr. Joyce added, “The past year has been challenging for everyone. We had to ramp down almost all flying once Delta (the strain of coronavirus) hit and stay that way for several months before ramping back up through multiple Omicron waves as we all learned to live with COVID in the community.”
Speaking about the future, Joyce said, “We always knew travel demand would recover strongly but the speed and scale of that recovery have been exceptional. Our teams have done an amazing job through the restart and our customers have been extremely patient as the whole industry has dealt with sick leave and labor shortages in the past few months.”
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