On March 10, Air New Zealand said it was suspending its earnings forecast for fiscal 2026, attributing the move to the recent intensification of conflict in the Middle East and the resulting extreme volatility in jet fuel markets.
In its statement, the airline noted that since issuing its interim results last month - which included a loss before tax of NZ$59 million - market conditions have deteriorated sharply. At that time the company had already warned that second-half earnings were expected to be flat or weaker than those in the first half. The company now says it cannot reliably offer a full-year earnings outlook given the rapid movements in fuel costs.
Air New Zealand spelled out the scale of the change in jet fuel pricing. According to the statement, jet fuel was trading around $85 to $90 per barrel prior to the recent conflict. In the days following the escalation, those prices rose markedly to a band between $150 and $200 per barrel.
Fuel costs are a significant input for airlines. The carrier highlighted that fuel is the second-largest expense after labour and typically represents between one-fifth and one-quarter of operating expenses. The company also included the exchange-rate reference used in its reporting: $1 = 1.6858 New Zealand dollars.
The suspension of guidance reflects the company’s assessment that the pace and magnitude of jet fuel price moves undermine the visibility needed to produce meaningful earnings projections. In addition to reporting its interim loss before tax of NZ$59 million, Air New Zealand’s prior interim commentary had already prepared investors for the possibility of weaker second-half performance compared with the first half.
For investors tracking the carrier, automated screening tools may be reassessing the stock in light of the guidance suspension. One such tool referenced in the original reporting is ProPicks AI, which evaluates AIR using a broad set of financial metrics to identify investment ideas based on fundamentals, momentum, and valuation. That tool was noted as contextual information in market commentary accompanying the company’s update.
The company’s statement and the figures it cited underline the sensitivity of airline unit economics to rapid changes in commodity prices. With jet fuel typically accounting for roughly 20-25% of operating costs and labour remaining the largest expense, sudden spikes in fuel represent a material headwind to margins and earnings predictability.
Key details:
- Air New Zealand suspended its fiscal 2026 earnings guidance on March 10.
- Interim results last month showed a loss before tax of NZ$59 million and noted second-half earnings could be flat or weaker than the first half.
- Jet fuel prices rose from about $85-$90 per barrel before the conflict to roughly $150-$200 per barrel in recent days, according to the carrier.
- Fuel is the airline industry’s second-largest cost after labour, usually representing one-fifth to one-quarter of operating expenses.
- Exchange-rate reference provided: $1 = 1.6858 New Zealand dollars.