Air NZ sees slow rebound in international travel

Air New Zealand expects a slow rebound in international air travel once travel restrictions are lifted to contain the coronavirus outbreak.

The airline has cut its flight capacity by 95pc since the outbreak.

The outbreak has seen the airline go from annual revenue of NZ$5.8bn ($3.49bn) to less than NZ$500mn/yr based on current booking patterns, said Air New Zealand chief executive Greg Foran. "A drop of more than NZ$5bn has the potential to be catastrophic for our business unless we take some decisive action," he said.

International tourism flows make up two-thirds of Air New Zealand's revenue. "We expect that even in a year's time we will be at least 30pc smaller than we are today," Foran said.

The sharp drop in air travel will affect New Zealand's jet fuel demand and production. The country's only refinery, the 135,000 b/d Marsden Point plant, produced about 29,000 b/d of jet fuel last year. The country imported a further 4,400 b/d last year, down from 5,900 b/d in 2018.

By Kevin Morrison