Air New Zealand faces heavy losses on soaring fuel costs

Air New Zealand on Thursday warned of a full-year pre-tax loss of 340–390 million NZ dollars, as surging jet fuel prices driven by Middle East tensions weigh heavily on earnings, News.Az reports, citing Xinhua.

The New Zealand national carrier said fuel costs for the second half of fiscal 2026 are now forecast at about 980 million NZ dollars, up from around 740 million NZ dollars previously. This represents a 240-million-NZ-dollar headwind despite the company’s hedging measures.

In a market update, the airline noted that jet fuel prices have climbed sharply from around 85–90 U.S. dollars per barrel before the Middle East conflict to as high as 230 U.S. dollars in recent weeks.

It added that refining margins have also surged, increasing pressure across the global aviation industry.

Air New Zealand said it has reduced capacity by around 3–5 percent since the conflict began in late February, raised ticket prices, and accelerated cost-cutting efforts to offset the impact. However, it warned that demand has weakened on domestic routes, trans-Tasman services, and certain long-haul flights.

The carrier stated it has identified up to 100 million NZ dollars in annualized cost savings and is reviewing capital expenditure plans, while maintaining total available liquidity of about 1.3 billion NZ dollars.

Despite these measures, the airline said the outlook remains uncertain due to volatile jet fuel prices, changing demand conditions, and broader economic risks.

News.Az 

By Nijat Babayev