Air New Zealand will push ahead with a direct Auckland to New York service this year despite posting an eye-watering loss in 2021 and further bleeding expected in 2022.
On Thursday, New Zealand's national carrier confirmed a $NZ376 million ($A352 million) loss for the last six months of 2021, and a projection to lose $NZ800 million ($A749 million) this year.
Chief executive Greg Foran said the result would not produce a dividend for shareholders.
While cargo revenues remain strong, the airline's passenger service has been severed by COVID-19, which reduced international travel to a pittance.
"The airline has typically derived two-thirds of its revenue from its international passenger network and much of that was effectively grounded for the majority of the first half," Mr Foran said.
Those restrictions, including a 107-day lockdown in Auckland, drove passenger revenues down a quarter, leading operating revenues down nine per cent on the previous six-month period.
Even though cargo revenues were up 29 per cent, fuel costs also leapt 14 per cent and are expected to go higher.
Chair Dame Therese Walsh said the 2022 financial year would be the most difficult yet for the airline due to suppressed demand and growing costs.
"As we've all seen at the petrol pumps, the cost of fuel has been significantly increasing and although we have hedging strategies in place, we expect to see these rising costs start to come through," she said.
The government's border reopening framework - which kicks in this weekend when Australia-based Kiwis can skip quarantine on arrival - will naturally help Air NZ.
Mr Foran said the border strategy was "helpful" but he was eyeing the scrapping of self-isolation provisions that would truly get people moving again.
"Looking further out to the end of this calendar year, we will be ramping up more passenger flights to North America and looking forward to starting up our direct service to New York City," he said.
The flight will be one of the longest commercial services in the world, at 15 hours 40 minutes from Auckland, and 17 hours 40 minutes from New York.
Air New Zealand has drawn $NZ760 million ($A712 million) from a government standby loan facility created to assist the airline during the pandemic.
Mr Foran said he intended to launch an equity capital raise "before the end of March 2022 or shortly thereafter, subject to market conditions", with the government participating to maintain a majority shareholding.
Australian Associated Press
Sign up for our newsletter to stay up to date.