Air NZ still expects earnings to beat last year despite rising fuels costs

Air NZ still expects annual earnings to beat last year's result despite the squeeze from rising fuel costs, which it sees as an ongoing headwind into 2019. The carrier Thursday reaffirmed guidance for pre-tax earnings of more than $527m in the year ending June 30, beating what it reported in 2017. The airline told investors at a briefing in Auckland it expects annual fuel costs of $990m at US$75 per barrel. "Based upon the current market conditions and despite the increased price of jet fuel, the company continues to expect 2018 earnings before taxation to exceed the prior year," according to slides accompanying CE Christopher Luxon's presentation. "2018 will be another strong year, despite absorbing over $100m in higher fuel expense." The airline has already responded to the higher cost of fuel with increased prices on domestic and international routes. Long-haul routes have a higher sensitivity to more expensive fuel because of the longer travel times.<br/>