Air New Zealand expects second-half profits to fall, citing “volatile” fuel prices, increased competition and uneven travel demand.
The company expects pre-tax profit for the six months to Dec. 31 to be between NZ$180 million and $230 million ($180 million to $188 million), compared with the same period last year. Lower profit of NZ$99 million.
Star Alliance airlines have noted “continued volatility” in jet fuel prices, calling it a “significant input cost.” Fuel prices rose 35% from July to September and fell 10% in October.
It added that while demand “remains strong” in most markets, there has been “recent softening” in domestic demand, particularly in the corporate travel sector.
The airline said: “The economic environment remains uncertain and future results may be affected by a number of factors. These factors include increased international competition, volatile fuel prices, currency fluctuations, , ongoing inflationary pressures, etc.”
It also cautions against “extrapolating” full-year profit expectations given the “continued uncertainty” in the business environment.
Air New Zealand says operational reliability issues surrounding the Pratt & Whitney PW1100G engines on its Airbus A321neo aircraft are not expected to have a material impact on first-half earnings. he added.
In early September, the company warned of “significant” schedule changes from January 2024, citing technical issues and required inspections that would impact engine availability.