Air New Zealand Employees Recognised With $1,000 Share Award

The efforts Air New Zealand employees made during one of the airline’s toughest years will be recognised via an award of $1,000 worth of company shares to all permanent employees.

This morning, the airline provided indicative earnings commentary on the next financial year, anticipating another significant loss and continued challenges given uncertainty about the reopening of long-haul borders.

Air New Zealand Chief Executive Greg Foran says this means it is more important than ever to ensure Air New Zealand staff are recognised for the work they’ve done - and will continue to do - as the airline recovers.

“This is the right thing to do given the mahi and sacrifices Air New Zealanders have made to get the airline through Survive and into its Revive phase," says Mr Foran.

“And by awarding shares to our employees, we want them to have the chance to benefit from the future success we will really need their help to deliver.

"I'm immensely proud of the way our people have responded to the COVID-19 crisis. They have risen to the occasion, working hard to keep New Zealand connected and Kiwis safe.

"Some pilots and crew spent more than 100 days in isolation to help reunite thousands of overseas Kiwis with their loved ones. Our cargo team has helped take 100,000 tonnes of New Zealand product to the world. Day in-and-out our people have done, and continue to do, everything they can in challenging and changing conditions to keep our customers safe.”

Around 8,000 employees will be eligible for the share award, which will be made in the last quarter of this calendar year. This will be available to New Zealand and Australian employees, and as a cash equivalent for those in other global locations.

In addition, after 15 months of reduced salaries, the airline will end employee salary reductions from 1 July.

"These steps are possible because we're on a more stable financial footing given our strong domestic business and growing Tasman and Cook Islands revenues.

"While a full recovery is still some time away, the changes announced today recognise that we cannot get there without an exceptional and ongoing contribution by our dedicated Air New Zealand team.

"We thank our people for the sacrifices made over the past 15 months and for their ongoing commitment to our customers in the coming year."

Trading update

This morning, Air New Zealand provided a trading update to shareholders.

Chief Executive Officer Greg Foran says that despite the challenges of the last 12 months, the airline continues to have a strong core in its Domestic and short-haul businesses.

Domestic capacity is now at approximately 90% of pre-COVID levels. The Tasman market is building following the opening of the Trans-Tasman bubble in late April 2021, with capacity currently at around 70% of pre-COVID levels.

Long-haul international passenger travel remains highly restricted, with passenger volumes currently less than 5% of pre-COVID levels while international borders remain effectively closed.

“The airline has its eyes firmly set on the future as we move out of the survive phase and into revival mode. For us this means further strengthening our core domestic business and putting even greater focus on our customer obsession, making sure we understand what our customers truly want from their end-to-end travel journey. It means maintaining the hard-won structural cost reductions made across our business from the outset of this pandemic and ensuring continued cost vigilance,” Mr Foran says.

The airline has recently renegotiated the delivery date of the first of eight new Boeing 787 Dreamliners, which were ordered in 2019 prior to the outbreak of COVID-19. The first aircraft was due to enter the fleet in the 2023 financial year, but an agreement has been reached to move the delivery of this aircraft out to the 2024 financial year.

Air New Zealand expects losses before other significant items and taxation will not exceed $450 million for the 2021 financial year.

In addition, the airline has previously noted that the 2021 financial result benefitted from a number of tailwinds received through various Government support and other mechanisms totalling approximately $300 million, which will not continue at the same level in the 2022 financial year. The airline currently anticipates a loss before other significant items and taxation in the 2022 financial year comparable with that expected for the 2021 financial year. However, given the current environment, the outlook for the 2022 financial year remains uncertain.

Full NZX statement is here https://www.nzx.com/announcements/374146

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