Highlights:

  • FY2026 guidance suspended due to jet fuel price volatility from Middle East conflict.
  • Jet fuel prices jump to US$150–US$200 per barrel from US$85–US$90 previously.
  • AIR shares trade at NZD 0.47 following the announcement.

Air New Zealand (NZX:AIR) has suspended its FY2026 earnings guidance after global jet fuel markets experienced unprecedented volatility following the recent escalation of conflict in the Middle East. The airline cited that extreme price swings in jet fuel have rendered prior assumptions outdated, prompting uncertainty over second-half results.

Fuel Market Volatility Drives Uncertainty

At its interim results on 26 February 2026, the airline had indicated that second-half earnings were expected to be broadly in line with, or modestly below, the first-half loss of NZD 59 million. These assumptions were based on jet fuel averaging US$85 per barrel.

Since the conflict began, jet fuel prices have soared to between US$150 and US$200 per barrel, driven by both Brent crude price increases and a widening crack spread, which jumped from approximately US$22 to US$115 per barrel. While Air New Zealand is 83% hedged against Brent crude for the remainder of FY2026, exposure remains to the crack spread, representing a significant risk to operating costs. The airline estimates it will consume around 2.9 million barrels of jet fuel from March through June.

Initial Measures and Share Price Reaction

In response to soaring fuel costs, Air New Zealand has implemented initial fare adjustments to partially offset increased expenses. The airline also plans to continue cost reduction initiatives and may consider further pricing and network adjustments depending on fuel price trends.

Following the guidance suspension, AIR shares were trading at NZD 0.47 per share on 10 March 2026. Analysts and investors are monitoring the airline’s ongoing measures closely, particularly given the high degree of uncertainty in global fuel markets.

Financial Metrics at a Glance

  • Share Price: NZD 0.47
  • First-Half FY2026 Loss: NZD 59 million
  • Jet Fuel Hedging: 83% against Brent crude
  • Remaining Fuel Requirement FY2026 (Mar–Jun): ~2.9 million barrels

FAQ: Air New Zealand FY2026 Guidance

Q1: Why did Air New Zealand suspend FY2026 guidance?
A1: Guidance was suspended due to unprecedented volatility in jet fuel prices after the Middle East conflict, which invalidated previous assumptions used in forecasting second-half earnings.

Q2: How is the airline managing higher fuel costs?
A2: The airline has implemented initial fare adjustments, continues cost reduction initiatives, and may adjust its network or pricing further if high fuel costs persist.

Q3: What was the market reaction to the announcement?
A3: AIR shares traded at NZD 0.47 following the guidance suspension, indicating market attention to potential earnings uncertainty and the airline’s mitigation steps.

Air New Zealand has temporarily halted its FY2026 earnings guidance amid extreme jet fuel market volatility. The airline has taken initial steps to manage costs and pricing, but second-half results remain highly uncertain. Shareholders and market participants will closely watch fuel market trends and the airline’s operational responses in the coming months.