(Reuters) – Air New Zealand Ltd, which reported a greater first-half loss on Thursday, forecasts its annual loss exceeding NZ$800 Million ($541million) in the wake of a prolonged COVID-19 lockdown in Auckland.

In the six-months ended December 31, NZ$367million of the carrier’s net loss before tax increased from NZ$186million one year ago.

In a statement, Chief Executive Greg Foran stated that the airline typically derives two-thirds its revenues from international passengers networks. However, he noted that much of this was grounded during the second half.

Air New Zealand posted a loss in 2021 of NZ$440m. It also announced on Thursday that it will raise equity before March, or soon thereafter, to replace the NZ$2billion liquidity package from the New Zealand government, its largest shareholder.

According to the airline, NZ$760million of a federal loan had been repaid by Wednesday.

In the first half, domestic operations of the carrier were severely affected by the lockdown in Auckland (the country’s biggest city), at a moment when all international borders were closed.

Although the government announced plans to open the border gradually this year, travel organizations say that rules mandating self-isolation upon arrival are necessary to revitalize struggling tourism.

Air New Zealand stated that the Omicron variant’s impact on domestic travel demand was “very uncertain” for the remainder of the financial year.

$1 = 1.4775 New Zealand Dollars