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Showing posts from March 30, 2020

Air New Zealand's Numbers Do Not Add Up

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Today frequent flyers received another email from the CEO of Air New Zealand Greg Foran. It was all prima facie rather blunt, but still full of spin.  The highlights: Before Covid-19, we had annual revenue of around $5.8 billion and made a profit of $374m in the last financial year. We also had around a billion dollars in the bank in case an unexpected event hit our business. The global reduction in air travel has hit Air New Zealand hard and we are earning less than $500 million revenue annually based on the current booking patterns. This means we are dealing with a significant reduction of over $5 billion in revenue per year. $5.8b less $5b = $800m in revenue expected per year?  At best? Or less than $500m? With $1b in reserves he has enough to carry the company for 2 months at annualised revenues of $5.8b, with another $900m added he has enough to carry it 2 more months without changing a thing and dumping any staff? Air New Zealand currently employs arou