Air NZ lifts earnings guidance on strong demand

Air New Zealand has upgraded its profit forecast. Photo / Grant Bradley

Air New Zealand has lifted its earnings guidance range for the current financial year on the back of strong domestic and international demand.

It now expects earnings before other significant items and taxation for the year to June 30 to be in the range of $510 million to $560 million.

This compares with the prior guidance range of $450 million to $530 million.

It is also a massive turnaround from a loss before other significant items and taxation of $725 million in the year to June 30, 2022.

Together with demand, the airline noted US dollar jet fuel prices have also declined below those assumed in the earnings guidance provided in February 2023, although the NZ dollar has also weakened over this time, reducing the impact of these declines.

The improvements in revenue and jet fuel price are expected to be partially offset by softer cargo revenues due to increased competitive capacity, particularly in Asia, impacting yields and load factors, it said.

The new guidance also assumes an average jet fuel price for the remainder of the 2023 financial year of US$95 per barrel.

“Ongoing fuel price volatility, global recessionary risks and inflationary pressures across the entire supply chain remain high and have the potential to impact the final result for the 2023 financial year,” it said.

Auckland Airport

Meanwhile, Auckland International Airport said long-haul flights between Auckland and North America are set to exceed 2019 levels, with a planned 11 per cent increase in flight numbers to those destinations next summer, compared to before the pandemic.

The summer season runs from October 2023 to March 2024.

The news spells competition for Air NZ as the number of airlines flying increases.

“In total, this summer we’re planning on having seven airlines flying non-stop from Auckland to eight destinations in North America,” said Scott Tasker, chief customer officer at Auckland Airport.

The airlines are Air Canada, American Airlines, Air New Zealand, Delta Air Lines, Hawaiian Airlines, Qantas and United Airlines.

Auckland Airport is set to have four airlines running direct flights to and from Los Angeles for the summer season (Air New Zealand, American Airlines, Delta Air Lines and United Airlines).

Air Canada has also announced a 20 per cent expansion of capacity on its summer seasonal air route between Vancouver and Auckland.

From September 2023 on, Qatar Airways is set to resume daily non-stop flights to and from Doha to Auckland.

Demand is also on the rise for travel to and from China, said Tasker.

The airport will have 27 flights per week operated by five airlines travelling to four cities in mainland China including Beijing, Guangzhou, Shanghai and Shenzhen.

They are Air China, Air New Zealand, China Eastern Airlines, China Southern Airlines and Hainan Airlines.