Air New Zealand Limited (ASX:AIZ) upgrades earnings despite $100 million fuel price hike

Credit: Woodys Aeroimages

Passenger and cargo air transportation company Air New Zealand Limited (ASX: AIZ) has told investors to expect an uptick in FY18 earnings before tax – despite absorbing more than $100 million in higher fuel costs over the period.

An investor presentation released today highlighted its fuel costs had risen from $880 million as at August 2017 to an expected $990 million at June 2018 as the airline also faced fuel pipeline disruption, significant weather events and maintenance costs during the period.

Air New Zealand’s new Auckland to Chicago route is expected to stimulate new and significant catchment areas of demand in the US east coast, with advancing partnerships with Singapore also expected to boost services.

In the travel stock space investors have their eyes on Webjet Limited (ASX: WEB) after the online travel agency reported a 45% increase in half-year NPAT earlier this year with strong growth expected into 2019.

Sydney Airport Holdings Pty Ltd (ASX: SYD) is also in a growth phase right now.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Sydney Airport Holdings Limited. The Motley Fool Australia has recommended Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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