In a stock exchange filing, the airline said since it had deferred its equity raise on August 13, 2021, to the first quarter of next year, it had been adversely affected by recent domestic lockdowns and ongoing COVID-19 travel restrictions across its international network. While the government has recently outlined a phased reopening of borders from early 2022, the future remains uncertain and circumstances continue to change worldwide.

“In that context, the airline has been considering its financial support requirements during the period up to a planned equity raising – which the airline is still targeting for the first quarter of 2022 - together with what further support and flexibility may be needed if material and unexpected events were to occur in 2022 such that it becomes prudent to consider a further delay to the planned capital raise.

“While the airline, with the support of the Crown, remains focused on an ordinary equity raise, it is important that the airline has sufficient flexibility to withstand presently unforeseen delays without relying entirely on increasing debt levels. In that context, the airline and the Crown have agreed to modify the Crown financial support,” said chairwoman Dame Therese Walsh.

Air New Zealand intends to repay all amounts outstanding under the amended Crown loan and any issued redeemable shares from the proceeds of the company’s proposed equity raise, together with an aligned debt capital markets transaction.

A shareholders' meeting to ratify the amended Crown loan would be held by December 31, 2022, but the airline asserts such a meeting would be unnecessary given its plans to raise equity in early 2022.

As of December 14, 2021, Air New Zealand has drawn down NZD505 million (USD341 million) of its existing Crown loan. Given the expected cash flow impact of ongoing COVID-19 travel restrictions, it expects to have drawn NZD900 million (USD608 million) by late February or March 2022.