Air New Zealand will be potentially able to add further domestic flight and passenger capacity with the government removing all domestic Covid-19 restrictions from midnight tonight local time (12:00 GMT) with no active coronavirus cases in the country.
The airline on 4 June had planned to operate around 55pc of its usual domestic capacity against pre-Covid 19 levels during July and August, flying the majority of its domestic routes at reduced frequencies.
But Air New Zealand's international operations will continue to be curbed with the government continuing to keep the country's borders shut, with a mandatory 14-day managed quarantine or isolation for those allowed to enter. The impact of Covid-19 has slashed the airline operations with its passenger numbers in April dropping by 98.9pc to 15,000 passengers from 1.43mn a year earlier. It cut its flight capacity by more than 95pc in March and April.
Air New Zealand expects to incur losses of between NZ$85mn-105mn ($55mn-68mn) from its fuel hedges in the 2019-20 fiscal year to 30 June. The airline has not provided an update since late February on the volume of jet fuel it expects to consume in 2019-20. The country's only refinery, the 135,000 b/d Marsden Point, produced about 29,000 b/d of jet fuel last year. The country imported another 4,400 b/d last year, down from 5,900 b/d in 2018.
New Zealand has gone 40 days since the last case of community Covid-19 transmission. "We are confident we have eliminated transmission of the virus in New Zealand for now," said New Zealand prime minister Jacinda Ardern.
Analysis by New Zealand's central bank the Reserve Bank showed the economy would operate just 3.8pc below normal levels with all domestic restrictions removed. This compares with 37pc below when the country was under complete lockdown for nearly two months from late March. But the continued closure of its borders will weigh heavily on its economy, with tourism accounting for around 5pc of its gross domestic product.
