Impact of Covid-19 on airline industry detailed as Air NZ CEO says 2021 will be ‘bumpy’

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The International Air Transport Association (IATA) said 2020 was a catastrophe for the sector as the Covid-19 pandemic closed borders, slashed travel, and smashed the finances of airlines.

Air NZ CEO Greg Foran discusses the airlines response to Covid-19 at Air New Zealand HQ on March 20, 2020.

Air NZ CEO Greg Foran discusses the airlines response to Covid-19 at Air New Zealand HQ on 20 March 2020. Photo: RNZ / Dan Cook

IATA’s review of the year showed passenger demand was down 66 percent on 2019, with international travel down 75.6 percent, capacity down 68 percent, and a loads falling to 62.8 percent.

“Last year was a catastrophe. There is no other way to describe it,” IATA director general Alexandre de Juniac said.

The hoped-for summer recovery in the Northern Hemisphere stalled in autumn and then disappeared as a new wave and new strains of Covid-19 caused more severe travel restrictions, he said.

“The world is more locked down today than at virtually any point in the past 12 months and passengers face a bewildering array of rapidly changing and globally unco-ordinated travel restrictions.”

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Meanwhile, Air New Zealand’s chief executive Greg Foran said this year was likely to be a bumpy one, and he did not think there would be much prospect of a solid recovery in international travel.

“I’m certainly feeling a degree of confidence we’ll be up and running across the Tasman and the Pacific Islands,” he told Morning Report.

“Over a long, long period of time … over five or seven years and Covid is possibly something which is something possibly more akin to the flu, but I think for a period of time we’re going to see a reasonably clunky international network.”

However, some way would likely need to be found to cope with the occasional new cases of Covid-19 that pop up in Australia and New Zealand which have caused travel bubbles to be suspended in recent weeks, Foran said.

“I think over time we’re going to have to find a way to work through that. I think these types of outbreaks are going to sporadically occur and we’re just going to have to work our way through how we’re going to deal with that.”

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Foran declined to give any details of the airline’s financial position ahead of a half year earnings report due later in the month, but said it was running close to the outlook it made in September when it started drawing on the government’s $900m loan.

The airline was still working through whether it would require staff to have a Covid-19 vaccine, he said.

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