Air New Zealand will receive a $900 million lifeline from the New Zealand Government as airlines across the world battle to stay in business.
The package comes in the form of a debt funding agreement through commercial 24-month loan facilities of up to $900 million, and is designed to secure essential routes and keep the airline operating.
“Without this intervention, New Zealand was at risk of not having a national airline,” Finance Minister Grant Robertson said.
“Air NZ has a unique and critical role in our economy and society. Also, the Government owns 52 percent of the company, which means we have a responsibility towards it. We have acted swiftly to put this loan agreement in place and support our national carrier.
“While today’s action means the company can continue to operate, given the unprecedented shock to the global aviation industry caused by COVID-19, Air NZ has advised that there will unfortunately be job losses as capacity is cut.”
Air New Zealand Chairman Therese Walsh said the company is “greatly appreciative” of the loan facility.
“The Government and Treasury moved swiftly to ensure that Air NZ had financial certainty as demand for flights domestically and internationally has rapidly fallen due to travel restrictions implemented by countries around the world,” she said.
“The loan facility ensures that Air NZ can continue to play a vital role in connecting New Zealanders and our businesses with each other here at home and around the world.”
Air NZ has suspended 85 per cent of its international routes as well as making major reductions to flights across the Tasman to Australia.