Aug 28 (Reuters) – Air New Zealand posted its biggest annual loss in three years on Friday as higher fuel prices linked to the Middle East conflict, persistent engine availability constraints and rising costs squeezed earnings.
Jet fuel costs, which account for up to a quarter of airlines’ operating expenses, have more than doubled since the U.S.-Iran war broke out.
The conflict raised Air New Zealand’s fuel bill by an estimated NZ$205 million after hedging from what it expected at the start of the second half of fiscal 2026.
New Zealand’s flagship carrier reported a loss before taxation of NZ$336 million ($199.85 million) for the year ended June 30, compared with a profit of NZ$189 million a year earlier. It was narrower than the NZ$356.5 million pretax loss forecast by Visible Alpha.
Engine availability issues also impacted profitability by an estimated NZ$190 million.
Air New Zealand said it was not yet in a position to provide earnings guidance for 2027, adding that the year will be one of both transition and recovery, with operational performance improving even as elevated fuel prices weigh on profitability.
The airline did not declare a final dividend.
($1 = 1.6812 New Zealand dollars)
(Reporting by Anjali Singh and Jasmeen Ara Shaikh in Bengaluru; Editing by Leroy Leo and Joyjeet Das)
