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Air New Zealand expects to reach 75 percent of its pre-Covid-19 international capacity and more than 100 percent of pre-pandemic domestic capacity by the end of 2022, as travel demand recovers, according to its chief executive officer Greg Foran.

A photo taken on August 9, 2021 shows an Air New Zealand plane taking off from Auckland Airport with the national carrier managing to cut its losses by a third in the last financial year

File photo: Air New Zealand aircraft Photo: AFP

The New Zealand national carrier is operating at 50 percent of international and nearly 100 percent of pre-pandemic domestic capacity, Foran told Reuters on the sidelines of an airline industry gathering in Doha.

"At this stage, there's some pent up demand that we've seen. People wanting to not just visit friends and relatives, but increasingly business people want to get out and be connected. So I'm very encouraged by that," he said.

"But I am cautious about what may happen should the price of fuel continue to stay over double what it was pre-Covid."

Air New Zealand was managing to cover increased fuel costs through fares that were averaging around 20 percent to 25 percent higher than pre-pandemic levels, Foran said, though that could change if fuel prices rise again.

Australian rival Qantas Airways has said that it might need to reduce domestic capacity further to help recover rising fuel costs, but Foran said there were not yet any plans to do that at Air New Zealand.

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Air New Zealand chief executive officer Greg Foran Photo: RNZ / Samuel Rillstone

Earlier this month, Air New Zealand said its loss in the 12 months ending 30 June would be narrower than previously forecast due to a rebound in passenger demand as restrictions eased.

Foran said it was too early to say whether the airline would return to a profit in the financial year starting 1 July.

"We're not putting out any guidance at this point," he said.

- Reuters

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