Air NZ calls in $85m more of Govt’s loan

Air New Zealand will draw down further on its loan from the government as it manages the effects of the latest covid-19 lockdown.

The national carrier had asked for a further $85 million from its debt facility to support its cash flow during the current pandemic restrictions.

This would bring the total borrowed to $435m, with $1.07 billion still available if needed.

“Following a month of constrained trading, it remains unclear how long these alert levels, the suspension of trans-tasman quarantine-free travel, and associated travel restrictions will continue. We also don’t know how demand will recover when restrictions are lifted,” the company said in an announcement to the NZX.

It said the financial cost of the lockdown would vary. The monthly cost if restrictions were at alert level 3 and 4 was estimated at between $45m and $55m, it said.

If restrictions in Auckland remained at level 3 or 4 while the rest of the country was operating at level 1 or 2, the cost would be between $25m and $35m.

The loss of the trans-tasman travel bubble was worth about $20m to $25m per month.

Air New Zealand said its cargo flights were still operating, with about 50 flights per week.

“The company is observing strong demand for air travel across regions in New Zealand that are currently under level 2 restrictions,” it said.

Air New Zealand had received nearly $26m in wage subsidies for more than 7000 employees since 21 August.