Air New Zealand lowers first-half earnings guidance due to softening demand

The news: Air New Zealand expects first-half earnings for FY24 to be around the bottom end of its NZD180 million ($168.3 million) to NZD230 million range initially provided on 12 October.

The numbers: New Zealand's flag carrier said that NZD45 million of Covid related credits, which the company believes are highly unlikely to be redeemed by the extended expiry date, are included in the earnings guidance.

The context: The updated guidance follows continued softening in domestic travel, particularly among corporate and government flyers, with late booking activity remaining weaker compared to the previous year. Air New Zealand also noted lower leisure demand in both the domestic and trans-Tasman markets, with increased pricing pressure for travel to North America due to heightened competition from US carriers. The Auckland-based operator said it expects the second half of the financial year to be "increasingly challenging."