for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Airlines

UPDATE 1-Air New Zealand suspends cash burn guidance, draws down loan

* Operating 40% of domestic market with Auckland locked down

* Opening up will depend on reaching vaccination targets

* Air New Zealand has access to NZ$1.5 bln debt facility from govt (Adds chairman comments, loan drawdown details, vaccination levels)

Oct 28 (Reuters) - Air New Zealand Ltd said on Thursday it had suspended its cash burn guidance due to uncertainty about domestic COVID-19 alert levels and had drawn down another NZ$105 million ($75.22 million) from a government debt facility.

The airline said it was operating around 40% of its domestic network given tough travel restrictions in the country’s largest city, Auckland.

“While the near-term situation is uncertain, I am extremely hopeful as we observe our population making great strides in terms of vaccination rates, which is critical to reconnecting New Zealanders with the world,” Air New Zealand Chairman Therese Walsh said at the carrier’s annual meeting.

Prime Minister Jacinda Ardern said last week New Zealand will end its strict lockdown measures when 90% of its eligible population is fully vaccinated. About 72% of those eligible have been fully vaccinated so far, while nearly 87% have received a first dose.

Air New Zealand last month said it was burning through around NZ$25 million to NZ$35 million of cash a month in the domestic market. The closure of a quarantine-free travel bubble with Australia had led to another NZ$20 million to NZ$25 million a month in cash burn, it said at the time.

The airline has access to a NZ$1.5 billion debt facility from the government, which is also its majority shareholder.

Air New Zealand said NZ$455 million had been drawn to date. It forecast that by February 2022 it will have drawn down NZ$900 million due to payments for new aircraft deliveries as well as tax bills that had been deferred. ($1 = 1.3959 New Zealand dollars) (Reporting by Jamie Freed in Sydney; Editing by Himani Sarkar)

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up