Air New Zealand expects to have drawn down around $900 million of the Government's $1.5 billion standby loan by February next year.
The airline's chair Dame Therese Walsh told shareholders today total drawings to date stand at $455m, including $105m it had used since its results announcement in mid-August.
As of this week the airline had just over $1b of available liquidity, in addition to $211m cash on hand as at October 26.
She said ongoing uncertainty regarding domestic Covid alert levels means future cash burn was difficult to forecast.
That is why the airline had suspended cash burn guidance. It has also suspended earnings guidance for 2022.
While it was pleased to see good demand for domestic air travel in regions that are in alert level 2, that represented only about 40 per cent of the domestic network.
That flying, combined with the extension of government support for an international freight scheme to the end of March was positive, but insufficient by itself to cover the airline's cash requirements .
These included fleet deliveries soon and the repayment of deferred PAYE payments.
Walsh said the company would draw down further on the Crown Standby Loan Facility to temporarily fund the delivery of two new narrow body jet aircraft and one turboprop which are expected to arrive in the next few weeks.
The delivery of these aircraft had been delayed as part of negotiations to push out capital expenditure at the start of the pandemic.
In addition, from January through to March, 2022, the airline will repay about $300m in deferred tax as it was not possible to extend this repayment.
Based on no significant changes to current domestic and international travel restrictions, and based on the impact on its business as outlined to the market, the airline could have around $600m to $650m drawn under the facility by December.
''Extrapolating further, and again assuming no significant changes from the current situation, draw downs would be approximately $900m by the end of February 2022,'' Walsh said.
The airline on August 13 announced it had in consultation with the Crown decided to defer its planned capital raise from September 30 this year until the first quarter of calendar year 2022.
Air New Zealand is majority owned by the Government and Finance Minister Grant Robertson outlined his view that the environment was not sufficiently certain and stable to enable the Crown to provide a firm pre-commitment to support the planned equity raise.
The Government has committed to participate in the capital raise to maintain its stake.
Walsh said the environment was unprecedented for operating an airline and she paid tribute to the work of Air NZ staff who were rewarded with $1000 in shares.
The result for the 2021 financial year reflected the full-year impact of Covid-19 on the airline.
It reported operating revenue of $2.5b, a decrease of 48 per cent compared with the prior year, and the overall result was a loss before other significant items and taxation of $440m.
While the domestic network has been the backbone of operations in the past financial year and exceeded expectations, passenger revenue at around $1.5b is only 30 per cent of pre-Covid levels.
In 2021 it flew only around 55 per cent of the network operated prior to Covid-19.
In the 2021 financial year, domestic flying was strong and relatively stable.
Before the latest outbreak and lockdown this August, domestic capacity had been tracking in excess of 90 per cent of pre-Covid levels.
Leisure demand was up 130 per cent in May, June and July compared with pre-Covid levels, and the airline had seen strong performance on regional routes, with routes such as Tauranga — Christchurch and Hamilton — Christchurch performing well above pre-Covid levels, along with New Plymouth, Kerikeri and Invercargill.
Before the latest lockdown, corporate customers had returned in high volumes, at around 90 per cent of 2019 levels.
''This was a huge milestone for the airline given there was a view taken by many that this much valued customer segment may not return to pre-Covid levels of travel.''
She said there would be greater emphasis on domestic operations.
''Going forward we will be focused on further unlocking that demand and making the regions even more accessible for customers as part of our domestic network strategy.''
Core to unlocking this demand is increased flight frequency, better connections and reasonable fares — which is expected to eventually result in capacity increases of over 110 per cent in those markets compared to pre-Covid levels.
Chief executive Greg Foran said the airline was flying bigger planes to the regions and the capacity was matched by demand.
He said there was an opportunity to fly new routes — and to fly more often — by scheduling at different times of the day, adapting services to the changing nature of work.
''I believe Air New Zealand can help make the life-changing decision to move out of our largest cities a success for our customers and their families — while also growing our business.''
He said when operations returned to normal the airline would have lower costs than previously.
When borders reopened the market would be different and ''we will need to play the game our way''.
The airline had rationalised our international fleet, and within years would have a single fleet of 787s, which provides significant cost advantages.
''We'll focus on increased frequency on single sectors over water, where we connect to our partners via global hubs.
"We have a strength in the premium leisure market, especially in North America which opens its borders on November 8.
''We're planning for New York and, as we see demand, we'll bring back Chicago and Houston, along with the other international destinations that make up the Air New Zealand network.''
Loyalty also provided scope to increase revenue.
The Airpoints programme was an untapped source of new revenue and was being redesigned, he said.
New seats, bigger screens and legroom plus a luxury business premier option.