Air New Zealand Swings to NZ$336 Million Annual Loss on Soaring Fuel and Engine Costs

Air New Zealand posted a significant annual loss, swinging from a profit a year earlier, as the airline grappled with a sharp increase in jet fuel prices and costly aircraft engine maintenance issues.

Financial Performance Under Pressure

New Zealand’s flagship carrier reported a loss before taxation of NZ$336 million ($199.85 million) for the fiscal year ended June 30, according to a company filing. This marks a sharp reversal from the NZ$189 million profit recorded in the prior year. The result was, however, slightly narrower than the NZ$356.5 million pre-tax loss forecast by analysts surveyed by Visible Alpha.

The airline's profitability was hit by two primary factors:

• Fuel Costs: A surge in jet fuel prices, which the company linked to geopolitical conflict in the Middle East, increased its fuel bill by an estimated NZ$205 million after hedging.
• Engine Availability: Ongoing constraints with engine availability impacted profitability by an estimated NZ$190 million.

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Cautious Outlook for 2027

Looking ahead, Air New Zealand stated that it was not yet in a position to provide specific earnings guidance for fiscal year 2027. The company characterized the upcoming year as one of "transition and recovery," anticipating that operational performance will improve even as elevated fuel prices continue to present a headwind to profitability.

In a reflection of the challenging financial results, the airline did not declare a final dividend for shareholders.