Air NZ could become a domestic operator only if it does not get another cash injection from the government.
The airline today revealed a loss of $454 million for the year ended June as it wrote down the value of its fleet, sacked staff, and saw its revenue drop by a billion dollars as borders closed.
Air NZ has benefited significantly from a $330 million government fund to prop up international freight flights - but that contract is due to run out in November.
And the airline is days away from dipping into its $900m government loan.
"Today's numbers are about where we expected, actually slightly better than we'd forecasted a little while back," Air New Zealand chief executive Greg Foran told Checkpoint.
"We have said that the year that we're in at the moment, we do expect to see a loss based on the scenarios that we're modelling, and that sort of makes sense, last [financial] year we had eight months where business was normal and four months where we effectively weren't doing too much flying during Covid-19.
"And of course we're going into a year where, at this stage, we had domestic going well in July, but that's come back a bit now from August 11, so it's going to be a bit tougher this year," he said.
"We are very likely to incur, in terms of an underlying loss performance, a loss which is more than what we had this year."
Foran said the company has made good progress in decreasing its spending.
"We were burning $175 million a month, we've been able to get that down to $85 million a month. And we've forecasted that we would expect that number to be between $65 million and $85 million per month going forward, providing we get domestic up and running, and the freight operations continue, because cargo has been a good bonus for us."
Air New Zealand has notified Treasury that it will need to start using the $900 million loan the government pledged, and that will start in a matter of days, Foran said.
The airline will survive through this financial year, he said, but it is in talks with the government about further funding, and equity is part of that discussion.
"The government... want to continue to be the majority shareholder, they're 52 percent at the moment. And we're in discussions with them, no decisions yet. And we'll just have to see where that plays out.
"I'm hopeful that we're going to get ourselves down to level one and we'll be able to get back to operating as a normal airline reasonably soon."
Meanwhile under alert level 2 restrictions, if they continue for a long amount of time, flight prices will probably go up, as demand exceeds supply, Foran said.
More redundancies at Air New Zealand are possible as a last option to save costs, he said, but it would be less than 100 roles.
The international freight contract from the government has been a valuable lifeline for the company, Foran said, and without it, Air New Zealand may not survive as an international carrier.
"It would be quite difficult for us to fly internationally without that support.
"We'd have to have discussions with, in this particular case the government, to see what we could do. It would certainly make it quite difficult for us to justify flying internationally, especially when there are caps on how many people can come back into the country. So that would make it very difficult for us."
He said the Minister of Transport is aware how precarious the situation is for Air New Zealand's international future.
"I would rather know for sure that we could continue to operate internationally with that cargo assistance. At this stage, we know where we're at, through to November, we'll have to see what happens after that.
