Air New Zealand logs biggest annual loss since 2023 as fuel, engine costs bite

Air New Zealand has reported its largest annual loss in three years, totaling NZ$336 million ($199.85 million) for the fiscal year ending June 30, 2026. The increase in fuel costs, primarily due to the Middle East conflict, accounted for a significant portion of the financial strain. Jet fuel expenses, which make up nearly a quarter of airlines' operating costs, have more than doubled since the U.S.-Iran war erupted.

This surge pushed Air New Zealand's fuel bill by an estimated NZ$205 million beyond initial hedging expectations at the midpoint of fiscal 2026. The conflict also resulted in an additional NZ$190 million in losses due to persistent engine availability issues. While the airline has not provided earnings guidance for 2027, it acknowledged that the year will be a period of transition and recovery, with operational performance expected to improve despite the burden of elevated fuel prices. Air New Zealand has decided against declaring a final dividend for the year.