The airline already saw its after-tax-profit drop from NZ$390 million in 2018 to NZ$270 million last year. Flights to Seoul, South Korea, have been put on hiatus until mid-year, while flights to China were suspended and flights to Samoa have been cut.
“Even if the government yields to pressure from the World Health Organisation and reduces travel restrictions, the viability of these routes from a financial perspective is likely to be limited by weaker consumer demand,” independent economist Benje Patterson says.
“This weakening of consumer demand is also not limited to the Chinese and Korean markets,” Patterson adds. “Air New Zealand has reduced capacity on other routes and sold trans-Tasman flights for as low as $69 and domestic fares for $9.”