Air New Zealand logs biggest annual loss in three years on fuel, engine costs

Key facts

• Air New Zealand reported its largest annual loss in three years, a pre-tax loss of NZ$336 million for the year ended June 30.
• Higher jet fuel prices, linked to the Middle East conflict, and engine availability issues significantly impacted earnings.
• The airline's fuel bill increased by an estimated NZ$205 million after hedging due to the conflict.
• Engine availability issues contributed an estimated NZ$190 million to the loss.
• The loss was narrower than the NZ$356.5 million pre-tax loss forecast by Visible Alpha.

Air New Zealand posted its largest annual loss in three years, a pre-tax loss of NZ$336 million for the year ended June 30, as soaring jet fuel prices and persistent engine availability constraints squeezed earnings. The conflict in the Middle East has significantly driven up fuel costs, with Air New Zealand's fuel bill estimated to have increased by NZ$205 million after hedging.

Engine availability issues also impacted profitability by an estimated NZ$190 million. The airline's loss was narrower than the NZ$356.5 million pre-tax loss forecast by Visible Alpha. Air New Zealand did not declare a final dividend and indicated that the upcoming fiscal year will be one of transition and recovery, with elevated fuel prices continuing to weigh on profitability.

Separately, Qantas Airways reported a 13.8% drop in full-year pre-tax profit to A$2.06 billion, surpassing estimates, but was impacted by higher fuel costs. Qantas also announced plans to phase out its Airbus A380 fleet starting in 2028.