(Reuters) – Air New Zealand on Thursday flagged lower first-half earnings for fiscal 2024 on the back of a recent softness in domestic travel demand, coupled with volatility in jet fuel prices.
New Zealand’s flag carrier expects earnings before tax for the first half of 2024 financial year to be between NZ$180 million ($108.36 million) and NZ$230 million. The company had reported NZ$299 million for the same period a year earlier.
“Jet fuel prices and the weaker New Zealand dollar have had an adverse impact on costs for much of the first financial quarter,” the company said.
The jet fuel price increased by 35% from July to September, but came down almost 10% over the past week, it said.
The airline assumes an average jet fuel price of $110 per barrel for the remainder of the first half of fiscal 2024.
The company had termed the 2023 financial year as “unique”, after recording revenue of NZ$6.3 billion and statutory earnings of NZ$574 million for the period.
Air New Zealand had warned in September that inspections of RTX’s Pratt & Whitney engines would have a “significant” impact on its flight schedule from next year.
The company, however, said on Thursday the financial impact from the engine issues on the first half of 2024 is “expected to remain nominal”.
($1 = 1.6611 New Zealand dollars)
(Reporting by Ayushman Ojha; Editing by Shilpi Majumdar)
