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Air New Zealand flags sharp FY26 loss as rising fuel costs bite

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A man with a suitcase puts his head in his hands while sitting in front of an airport window.

The Air New Zealand Ltd (ASX: AIZ) share price is in focus as the airline flags an expected full-year loss before tax of $340 million to $390 million, driven by a sharp rise in global jet fuel prices. Management points to improved liquidity and early progress returning grounded aircraft to service as key positives.

What did Air New Zealand report?

  • FY26 loss before taxation now forecast at $340 million to $390 million
  • Estimated 2H26 fuel cost to reach $980 million, up from $740 million previously assumed
  • Airline about 85% hedged on 2H26 Brent crude exposure
  • Total available liquidity remains around $1.3 billion
  • Up to $100 million in annualised cost savings identified, to benefit FY27 and beyond

What else do investors need to know?

Air New Zealand has made targeted network reductions, lowering overall group capacity by around 3% to 5%, aiming to minimise disruption while controlling costs. Fare increases have also been implemented, with further adjustments expected if fuel prices remain high.

Aircraft availability is improving, with all Boeing 787s set to return to service by late June. The company’s pro-forma liquidity will rise by about $670 million once a new US$400 million secured revolving credit facility is completed. Moody’s reaffirmed Air New Zealand’s Baa1 credit rating, but changed the outlook to negative.

What’s next for Air New Zealand?

Air New Zealand’s strategy update through to FY31 is progressing and management expects to outline more details soon, focusing on performance, network, and fleet growth. Cost savings programs and capital expenditure reviews continue as the airline adapts to elevated operating costs.

The outlook for FY26 remains subject to uncertainty from fuel price volatility, possible further schedule adjustments, and ongoing maintenance costs. Management is taking a cautious approach to pricing and capacity as the market evolves.

Air New Zealand share price snapshot

Over the past year, Air New Zealand shares have declined 37%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 4% over the same period.

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The post Air New Zealand flags sharp FY26 loss as rising fuel costs bite appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

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