AIR New Zealand on Monday cut its earnings outlook for fiscal 2024, on the back of challenging economic conditions and ongoing cost-of-living pressures leading to softer revenue in both domestic and North American markets.

New Zealand’s flagship carrier now expects earnings before taxation between NZ$190 million (S$152.4 million) and NZ$230 million for 2024, down from a previous estimate of NZ$200 million to NZ$240 million.

An influx of US carriers into New Zealand has put a dent in the airline’s fourth-quarter revenue while “pricing pressures” has affected performance in the North American market.

“North American performance continues to be impacted by very competitive pricing pressures, as the market adjusts to the significant capacity added into the New Zealand market by US carriers,” the carrier said in a statement.

Earlier in February, the company forecast lower earnings for 2024 flagging impact from engine maintenance.

The airline has been struggling to cope with stiff competition from its US peers on pricing terms for quite a some time now.

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The carrier laid out further reasons behind its forecast cut assuming an average jet fuel price of USD$105/ barrel for the second half, to be able to be within its newly updated earnings outlook for 2024.

Air New Zealand said its earnings will also take a hit of a total of NZ$95 million in Covid-related credit breakage for this financial year. REUTERS