• Significant impact of elevated and volatile global jet fuel prices
• Implementing financial, commercial and operational actions to mitigate impact
• Focused on improving operational excellence and resolving engine challenges

Air New Zealand has provided a market update highlighting the significant impact of elevated and volatile global jet fuel prices following the conflict in the Middle East. The airline is responding from a position of resilience, reflecting deliberate actions taken over recent years to improve liquidity, funding depth, and financial flexibility across its fleet. Air New Zealand has moved quickly to mitigate the impact of higher fuel costs to protect earnings and preserve liquidity. This includes implementing a number of targeted financial, commercial and operational actions, and accelerating the cost reduction work already under way. At the same time, management remains focused on continuing to improve operational excellence and resolving engine challenges to increase aircraft availability. The airline has taken a targeted approach to domestic consolidations to minimise customer disruption and preserve connectivity. If fuel prices stay at these elevated levels, the airline expects to announce further capacity updates in the coming weeks. Air New Zealand's total available liquidity is approximately $1.3 billion, and the airline has also strengthened its funding flexibility in recent years, with approximately $4.0 billion of available aircraft equity across its unencumbered and under-encumbered fleet. The airline has identified up to $100 million of annualised cost savings to date, which will flow through into FY27 and beyond. Air New Zealand now expects an FY26 loss before taxation in the range of $340 million to $390 million, based on current trading conditions and an assumed average jet fuel price of approximately US$145 per barrel for 2H26.

Air New Zealand now expects an FY26 loss before taxation in the range of $340 million to $390 million, based on current trading conditions and an assumed average jet fuel price of approximately US$145 per barrel for 2H26.

The airline is focused on continuing to improve operational excellence and resolving engine challenges to increase aircraft availability. Further details on Air New Zealand's strategy refresh to FY31 will be provided shortly.