(Reuters) - Air New Zealand Ltd (AIR.NZ) warned on Wednesday higher than expected jet fuel prices could hurt profitability in 2019.
Chairman Tony Carter told the airline’s annual shareholder meeting that prices lately had outpaced the $85 per barrel the company had assumed in its 2019 financial year earnings guidance.
Jet fuel is now trading at $93.71 a barrel, tempering the financial outlook for airlines globally. JET-SIN
“As we look forward to the year ahead, we are optimistic about market dynamics and demand trends, but note that the current levels of jet fuel price will be a headwind on profitability compared to the prior year,” Carter said.
Last month, Air New Zealand said its pretax profit would fall by up to 21 percent from last year’s $NZ540 million in the current financial year due to higher fuel prices.
The airline has forecast underlying pretax profit in a range of NZ$425 million to NZ$525 million for the financial year ending June 30.
Shares of Air New Zealand fell 1.6 percent to a seven-month low in a marginally weaker overall market .NZ50.
($1 = 1.3738 Australian dollars)
Reporting by Aditya Soni in Bengaluru; Additional reporting by Jamie Freed; Editing by Stephen Coates and Muralikumar Anantharaman