By Pattrick Smellie
May 27 (BusinessDesk) - High aviation fuel prices have knocked up to $60 million off Air New Zealand's forecast pre-tax profits in just two months.
The airline has dropped guidance for earnings this financial year to bottom of its previously announced range.
"Based on the current market environment and reflecting an additional approximately $25 million headwind from increased jet fuel prices (assuming an average price for the second half of the year of US$78 per barrel), we are targeting 2019 earnings before taxation to exceed $340 million," the company said.
That compares with a target range for operating earnings of between $340 million and $400 million given on March 28.
The announcement to the New Zealand Stock Exchange was in a slide pack released for an investor presentation this afternoon and came some four hours after the national carrier trumpeted the inking of a deal with aircraft manufacturer Boeing for eight new Dreamliner 787-10 for a discounted price against a list price for that many planes of US$2.7 billion.
Air NZ's shares were trading at $2.71, down 0.4 percent on Friday's close, after the announcement hit the exchange.