Air NZ sees first-half earnings at lower end of forecast

Air New Zealand said on Wednesday it expects its first-half earnings to be at the lower end of its forecast, due to weak travel demand and increased competition from US carrier. New Zealand's flagship carrier had earlier forecast earnings before tax for the six months ended Dec. 31 between NZ$180m ($110.34m) and NZ$230m. For the same period last year, the carrier had reported a higher statutory profit before tax of NZ$299m. "Early signs of softness in domestic travel, particularly corporate and government travel, have continued, with late booking activity remaining weaker compared to the prior year," the company said. The company also expects the second half of the fiscal year to be "increasingly challenging". "The tight economic environment is having an impact on consumer's discretionary travel decisions, which appears to be borne out by Air New Zealand's tepid earnings guidance," said Tim Waterer, chief market analyst at KCM Trade. Inflation and high borrowing costs have hit the airline, which is also struggling with quality inspections of RTX's Pratt & Whitney engines for a rare manufacturing flaw. Air NZ, however, said in October it sees a "nominal" financial impact from the inspections in the first half of 2024.<br/>