Air New Zealand Posts FY26 Net Loss as Fuel Costs and Engine Issues Offset Traffic Gains

Air New Zealand Ltd (ANZLY, AIZ.AX) reported a loss in fiscal 2026, compared to the prior year’s profit, adversely impacted by high fuel prices resulting from the Middle East conflict and by engine availability issues. Revenues, however, increased on the back of higher passenger traffic and capacity.

Looking ahead, the airline said it expects the 2027 financial year to be both a transition and recovery year, with operational performance continuing to improve even as elevated fuel prices weigh on profitability.

Prior to the Middle East conflict, the airline said it would have expected to return to profitability in the 2027 financial year, reflecting underlying improvements in the business.

However, the company said it is not in a position to provide earnings guidance for the new year at this time, amid the continued uncertainty surrounding the conflict, the volatility of jet fuel prices, and with jet fuel currently around $150 per barrel.

Excluding fuel, the major factors that impacted the 2026 financial result are expected to continue to have some impact in the 2027 financial year, but to a lesser extent.

Air New Zealand Chief Executive Officer Nikhil Ravishankar said, “We are seeing encouraging inbound demand, with strong forward bookings into New Zealand. This is a positive signal for tourism and for the country more broadly.”

The airline will provide a more detailed update on its strategy and medium-term financial objectives at an Investor Day later this year.

For the full year, net loss attributable to shareholders of the parent company was NZ$242 million, compared to a profit of NZ$108 million a year ago. Loss per share was 7.4 cents, compared to earnings of 3.2 cents last year.

Loss before taxation was NZ$336 million, compared to the prior year’s profit of NZ$164 million.

The latest period’s loss mainly reflected increased fuel prices, the ongoing impact of multi-year engine availability issues, as well as maintenance and aviation system costs.

Total operating revenue, however, grew 3.9 percent to NZ$7.02 billion from NZ$6.76 billion a year earlier.

Passenger revenue of NZ$6.1 billion rose 4.8 percent from last year, while cargo revenue of NZ$484 million dropped 0.6 percent compared to the prior year.

ASK capacity grew 1.3 percent across the network as grounded aircraft returned to service, partly offset by capacity reductions as the airline responded to unprecedented, elevated fuel prices resulting from the Middle East conflict in the second half.

Group Revenue per Available Seat Kilometre (RASK) increased 3.4 percent across the network.

The airline flew 16.0 million passengers in the year, up 0.6 percent from last year. Passenger load factor was 83.7 percent, up 0.3 percentage points on 2025.

In Australia, the shares closed Friday’s trading at A$0.3200, down 1.54 percent.

Source link