Air New Zealand flags cancellations as well as airfare increases

Earlier this week we reported bad news for flyers with the increase in the price of jet fuel leading Air New Zealand becoming the first international airline to increase airfares in a bid to offset challenging operating costs. 

Air New Zealand confirmed that it has implemented fare changes, saying that if the conflict in the Middle East continues, it would take further pricing action.

Now the airline is flagging flight cancellations.

Air NZ is set to cancel around 1100 flights affecting thousands of passengers through until early May.

Air NZ chief executive Nikhil Ravishankar told Radio New Zealand’s Morning Report that between now and the end of April/early May the airline will cancel around 1100 flights.

In that period the airline will carry around 1.9 million passengers, so 44,000 passengers will be affected by flight cancellations, he said. Most of the passengers will be moved to flights on the same day.

The exact flights cancelled have not yet been announced.

Services would be cut "proportionally across the board", meaning both domestic and international, but no routes would be cut altogether. Off-peak services would be the focus of the cuts, he said.

So you can thank President Trump's "pre-emptive" action for that. 

IATA’s weekly monitoring of jet fuel prices has revealed a 58% rise from US$99.40 to US$157 a barrel on last week. 

Air New Zealand also pointed to an increasingly volatile spread in the difference between crude oil and the price of refined jet fuel. 

“Since the conflict began, the crack spread has been particularly volatile, widening from approximately US$22 per barrel before the conflict to as high as US$115 per barrel,” Air New Zealand said in a statement. 

"As a result, the airline has suspended its 2026 [earnings] guidance for the foreseeable future, with the crisis expected to 'meaningfully affect' its second-half earnings." 

Network and schedule adjustments were also flagged. The share prices for both Qantas and Virgin Australia both dropped this week on the back of the jet fuel crisis before rallying.