Inflation, international competition, predicted falling domestic demand and expensive engine maintenance have led to Air New Zealand painting a grim picture of its upcoming financial results.
The airline today posted a warning to investors on the NZX, ahead of its official financial results on Thursday.
It says it expects the second half of this year to be “increasingly challenging”.
“A number of economic and operational conditions have deteriorated further and are increasingly expected to have a significant adverse impact,” the statement to investors read.
Forward bookings indicate that increased capacity and further pricing pressure from US carriers is expected to hit Air New Zealand’s revenue.
'Ongoing weakness'
Inflation will hit in various areas and there’s expected to be “ongoing weakness” in domestic corporate and government demand.
There’s also a $35 million bill for unplanned Pratt & Whitney global engine maintenance requirements.
As a result of that, it expects pre-tax earnings to be in the range of $200 million to $240 million.
The results come as international and domestic travel has markedly picked up post-pandemic. Air NZ has had a 5.5% lift in passengers over the past year.
Air New Zealand and Auckland Airport will both release their interim financial results on Thursday morning.
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