Even with hedging, the fuel bill was $205m higher than anticipated.<\/p>\n
How bad?<\/p>\n
Today\u2019s $336m pre-tax loss was slightly less dire than some market analysts had been expecting<\/a>.<\/p>\n Late last month, Forsyth Barr forecast a $350.2m pre-tax loss for the airline and said the consensus forecast from market analysts was a $364.4m loss.<\/p>\n In May, Craigs estimated Air New Zealand would lose $427m<\/a>.<\/p>\n \u201cThe thing that we\u2019re aiming to do in FY27 is to return the underlying performance of the business to turn a profit. What the impact of fuel\u2019s going to be is something that we\u2019ll have to wait and see. But that is the goal,\u201d Ravishankar said.<\/p>\n On whether airfare increases could be ruled in or out, he indicated jet fuel prices again held the key, adding: \u201cThe short answer is at today\u2019s fuel price we\u2019ve got the fares in the market that you\u2019d expect to see.\u201d<\/p>\n He said the airline was trying to balance affordability and the need to recover much of the fuel price increases.<\/p>\n \u201cThat\u2019s something we\u2019re calibrating on a flight by flight, route by route basis.\u201d<\/p>\n Former Air NZ chief executive and current Prime Minister Christopher Luxon blasted the airline today<\/a>, saying it needed to get its act together \u201cvery quickly\u201d.<\/p>\n Luxon told a press conference: \u201cIt\u2019s clearly a very poor result. It\u2019s clearly a very poor performance, even in the context of global aviation and other airlines as well.\u201d<\/p>\n Two to tango<\/p>\n Meanwhile, the airline said there was healthy inbound demand, with strong forward bookings into New Zealand.<\/p>\n \u201cWe\u2019ve done a lot of work around stimulating tourism out of the markets that matter,\u201d Ravishankar said. <\/p>\n \u201cWe\u2019ve got world-class brand and marketing capability.\u201d<\/p>\n He said in \u201ca chaotic world\u201d the New Zealand tourism brand was getting stronger.<\/p>\n \u201cWe\u2019re seeing that in the inbound demand.\u201d<\/p>\n Some analysts have described sluggish demand for New Zealanders to travel long-haul but Ravishankar said there were signs of change there.<\/p>\n \u201cWe\u2019re also starting to see some improvements in terms of domestic demand and outbound from New Zealand too.\u201d<\/p>\n Fleet<\/p>\n The airline said 2026 was a peak aircraft maintenance year, with lifecycle maintenance and additional maintenance on leased engines pushing costs up by $144m.<\/p>\n \u201cWe have by and large got our aircraft flying again,\u201d Ravishankar said.<\/p>\n \u201cWe have all our 787s now back from long-term storage and we have one A321 that is still currently parked up as we wait for the engine situation on the Pratt & Whitney 1100 engines to improve.\u201d<\/p>\n He said that was a massive gain on even a few months ago where up to 11 aircraft were parked up.<\/p>\n Executive pay<\/p>\n The airline\u2019s annual report today said Ravishankar\u2019s base salary for the part year was $1.29m, less than the $1.35m his predecessor Greg Foran had for the part-year.<\/p>\n Ravishankar, who took over as chief executive in October, also received $57,722 in benefits.<\/p>\n Six New Zealand managers were paid more than $1m.<\/p>\n Tim O\u2019Loan, Amova Asset Management research analyst, said the airline was still dealing with many issues outside management\u2019s control but some major issues were moving in the right direction.<\/p>\n \u201cEngine-related disruptions have been hanging over the business for a long time, and there now seems to be genuine progress on getting the fleet back to a more normal operating position.\u201d <\/p>\n Aircraft availability had also improved substantially. <\/p>\n \u201cThe challenge is that those benefits are currently being masked by elevated fuel costs, which remain the biggest driver of near-term earnings.\u201d<\/p>\nAll of Air New Zealand’s widebody aircraft are now out of storage. Photo \/ Cheng Xin, Getty Images<\/p>\n