Air New Zealand’s 80th birthday party has been crashed by a black swan.

For Air New Zealand, 2020 was supposed to be a year of celebration but it quickly turned into what will be one of the airline's darkest chapters.

In late January the national carrier sent out invitations for its 80th anniversary celebration. The exclusive event to be held on Auckland's waterfront was an opportunity to mark the birthday milestone while also providing those in the industry a chance to meet the airline's newly minted chief executive Greg Foran.

"Join us for a special evening as we journey back in time and look forward to what the future might hold," the invitation from chairman Dame Therese Walsh said.

At the time the company's future looked bright with new aircraft on order, a new route to New York being launched later in the year, groundbreaking sleeper cabins under design and a high profile chief executive at the helm.

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ANDREW GORRIE/STUFF For Air New Zealand, 2020 quickly turned into one of the airline's darkest chapters.

Air New Zealand, like many airlines, had been thriving in what many were calling the golden age of travel. It had posted record profits in recent years, made off the back of a booming tourism sector, low fuel prices and sound management.

A lot of ground had been clawed back in the nearly 20 years since Air New Zealand was given an $885 million bailout from the Government following the collapse of Ansett. The 80th anniversary was an opportunity to recognise some of that success and, as the airline's catchphrase says, look at "where to next?".

But nobody could have predicted what came next.

"It was the biggest, meanest, ugliest black swan ever," aviation consultant Irene King said.

RICKY WILSON/STUFF Air New Zealand chief executive Greg Foran joined the airline just as the coronavirus crisis was beginning.

"Black swan" is a metaphor for events that are out of the blue, extremely rare and have a severe impact.

For the aviation sector and the entire global economy, the coronavirus pandemic has been one of the biggest black swan events in modern history.

Covid-19 coronavirus started as an outbreak in China, disrupting flights to mainland China and parts of Asia, but it quickly escalated into a global crisis which brought air travel to a near stand still and left airlines with no choice but to axe routes, ground aircraft and lay off staff.

It was in late February when Air New Zealand said it was postponing the anniversary celebrations due to the impact of Covid-19 on the airline.

"As you can appreciate our senior leaders are keenly focused on navigating our way through this challenge facing the airline," an email from Walsh said at the time.

By that stage Air New Zealand had suspended flights to Shanghai and South Korea, reduced capacity to parts of Asia, reduced Tasman capacity by 3 per cent and forecast an up to $75m hit to profits as a result of coronavirus.

From there things went from bad to worse as governments began restricting border entry and air travel demand fell off a cliff.

Over the next month Air New Zealand suspended its profit guidance, reduced its network capacity by 95 per cent, suspended dozens of routes, negotiated a $900m loan from the Government and set in motion a plan to reduce its headcount by 30 per cent – the equivalent of at least 3750 staff.

King said before Covid-19 Air New Zealand was "a skeleton with some really good bones".

"Now I would describe it as a skeleton with no bones.

"In 12 months time it might have a spine and nothing else," she said, suggesting its domestic operation may include just Auckland, Wellington and Christchurch.

"It won't have all of its limbs."

SUPPLIED "It was the biggest, meanest, ugliest black swan ever," aviation consultant commentator Irene King said.

She said there would be some regional airports, such as Whangārei and Hokitika, that may never see an Air New Zealand aircraft again, despite a provision in the Government loan agreement saying no routes on its existing network will close.

"In my view that's an unrealistic expectation. To me it was just a political sop."

King said the one thing saving the airline from going under was the Government's willingness to prop it up no matter what, because it recognised the strategic importance of a national airline.

"It's not going to let it disappear totally."

There was also a chance Wellington would never get international traffic again because it was more economical for operators to fly into Auckland or Christchurch, she said.

"Wellington has always been extremely marginal."

Economist Benje Patterson said most airlines would go bankrupt. Those that remained would survive only due to government support.

"Governments, such as New Zealand's, understand that aviation generates not just commercial benefits for the airline, but there are broader spillover benefits from air connectivity for business, trade and maintaining social structures," Patterson said.

Air New Zealand would focus on domestic and short haul passenger services initially, predominantly across the Tasman, he said. Its longer haul network would shrink and focus on strategic connections to freight and passenger hubs, he said.

"The airline is likely to shy away from its newer destinations in South East Asia and its bold super long haul service to New York may be a step to far initially."

It would also focus more on cargo revenue, an area it had already targeted during the pandemic.

GETTY IMAGES Air New Zealand is essential for not just our economy but also the nation's social structures, economist Benje Patterson says.

There was a gap in airfreight cargo capacity due to fewer passenger services and Air New Zealand would meet demand as best it could with its existing aircraft, but was unlikely to invest in dedicated cargo planes, he said

Air New Zealand would probably try to cancel many of its new aircraft orders and return leased aircraft, he said.

The market for second-hand aircraft would be flooded with aircraft from bankrupted airlines, at a time when demand from those that survived was relatively low, so it would struggle to sell aircraft, he said.

VIRGINIA WOOLF/STUFF Air New Zealand aircraft grounded at Nelson Airport. Domestic air travel will be Air New Zealand's saving grace, experts say.

Capa - Centre for Aviation - chairman Peter Harbison said that in the years since the 2002 bailout Air New Zealand had established itself as a leader in aviation.

"Its reputation both in Australia and globally is vastly bigger than its size," Harbison said.

It had achieved this through innovation, good products and smart leadership, he said.

"It's been a great success story, a real model for the way you can renationalise an airline."

DAVID WHITE/STUFF Air New Zealand kiosks sit unused at Auckland International Airport during a nationwide lockdown.

Post-Covid-19 domestic air travel would rebound first and Air New Zealand's uniquely dominant position in the domestic market would serve it particularly well, he said.

However, Air New Zealand's recovery in international markets would take much longer.

"A lot of the long haul aircraft will be grounded for some time because there just won't be international markets you can fly to."

A post-Covid-19 world would have weak economies and high unemployment but Air New Zealand's domestic strength and Government support put it in a better position than most, he said.

"It's going to be a hard market.

"It's not a totally positive scenario but it has a glimmer of hope."

When Air New Zealand did resume an international network it would select routes on which there was limited competition, Harbison said.

DAVID WHITE/STUFF Due to Covid-19 restrictions on travel Air New Zealand has grounded 58 of its 114 aircraft

The airline's new order of 787-10s would probably be delayed or may be scrapped altogether. The same went for its plans to fly non-stop to New York and its sky nest economy sleeper bunks, he said.

"I think almost none of those things will happen."

Forsyth Barr analyst Andy Bowley said Air New Zealand would need additional cash within the next 12 months and may even need to sell planes as it prepares to downsize.

He also gave an ominous warning regarding proposed job losses.

"The longer the fleet is grounded the deeper the workforce cuts are likely to get," Bowley said.

Singapore-based aviation analyst Brendan Sobie said the crisis had been devastating to every airline.

"It will be a long road ahead for airlines as it could be a long time for traffic to recover to pre-crisis levels, particularly international traffic."

Having said that, Air New Zealand was in relatively good position given it had Government support and a large domestic market, Sobie said.

"Domestic dominance is a key strength."

Air New Zealand's domestic market share could increase depending on what Jetstar decided to do with its New Zealand domestic operation post crisis, he said.

Other strengths were its brand, product and innovative spirit.

"Because of this Air New Zealand is highly regarded internationally and punches well above its weight given the small size of its home market."

After Covid-19 the international market would be smaller, at least for a couple of years, making Air New Zealand's domestic position even more important, Sobie said.

"This inevitably will have an impact on its expansion and new product plans."

How much Air New Zealand would have to adjust internationally would depend on potential changes by the foreign airlines serving New Zealand and how New Zealand tourism performed relative to other markets, he said.

Air New Zealand's share of the international market would probably increase but its international traffic would shrink, Sobie said.

How much Air New Zealand shrinks and how many years it took for the market to recover to 2019 levels were unknown.

"However, what is certain is Air New Zealand will survive and we don't have that 100 per cent certainty for many airlines these days. That could be Air New Zealand's biggest strength," Sobie said.