Air New Zealand warns of profit pressure amid soaring aircraft fuel prices

Air New Zealand has warned that soaring jet fuel prices will deal a significant blow to earnings in the second half of this year.

The national carrier suspended its full-year profit guidance just weeks after issuing it, as escalating Middle Eastern conflict triggered unprecedented volatility in global energy markets.

In a statement to the New Zealand Stock Exchange, the airline stated that jet fuel prices have surged from approximately $85–90 USD per barrel before the conflict to between $150–200 USD in recent days, whilst refining margins, or crack spreads, have increased sharply from $22 USD to as much as $115 USD per barrel.

In February, the airline had forecast second-half profits would generally be equivalent to, or slightly below, its first-half losses of NZD 59 million, based on an assumed average jet fuel price of $85 USD per barrel.

The airline has already implemented initial fare adjustments and warned it may need to raise prices further and adjust networks and flight schedules should cost increases continue.