Air New Zealand (ASX:AIZ) Provides Full Year Earnings Guidance
Compensation Reduction
Air New Zealand expects compensation in the second half of the financial year to be approximately $35 million to $40 million, a significant decrease from $94 million in the first half. This reduction is due to lower compensation from engine manufacturers, despite an increased number of grounded aircraft.
Overall Trading Conditions
The airline benefits from lower fuel prices, its operations remain configured to operate around 8 to 10 more jet aircraft than are presently available. Adjusting operations to reflect the reduced fleet introduces complexity, particularly as engines return to service. Additionally, recent US tariff announcements have added uncertainty to the demand environment, though no material changes in bookings or cargo have been observed.
Financial Outlook
Air New Zealand estimates earnings before taxation for the 2025 financial year to range from $150 million to $190 million. This projection includes the expected $35 million to $40 million in compensation and $20 million in credit breakage for unused customer credits. The forecast assumes fuel prices at US $81 per barrel for the remainder of the financial year.
Motley Fool contributor Abbie Stokes 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.
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