Air New Zealand has announced that it has suspended its earning guidance and may need to increase prices and make adjustments to its flight schedules due to the unprecedented volatility in fuel prices. The airline stated that the guidance provided last month is no longer applicable and that it expects a significant impact on its second half earnings.
The company has already implemented some fare changes but may need to take further action if high jet fuel prices persist. Air New Zealand highlighted the sharp increase in the crack spread price, which has surged from US$22 per barrel to as high as US$115.
Shares of Air New Zealand fell nearly 8 percent on Monday as oil prices climbed to around US$100 per barrel, with a peak of US$119.50 per barrel in a single day. The conflict in the Middle East has led to a doubling of jet fuel prices, putting additional pressure on airlines as they reroute flights and assist stranded passengers.
It remains to be seen how Air New Zealand will navigate these challenges and manage its operations in the face of escalating fuel costs.
