Air New Zealand: Conditions Deteriorating Further

Both domestic and international flying is challenging for Air New Zealand. Leisure demand is declining amid cost-of-living pressures, corporate and government travel remain subdued, and international competition has intensified. Coronavirus-related travel credit redemptions have declined, but they are only a partial offset. The airline now assumes fiscal 2024 credit breakage—its expectation of unused credits to expire—of about NZD 95 million, from NZD 65 million previously. The net result is a NZD 10 million reduction in fiscal 2024 earnings guidance. Our unchanged pretax profit forecast of NZD 226 million sits near the top of the amended guidance range of NZD 190 million to NZD 230 million.