Air New Zealand suspends FY26 forecast as jet fuel spikes on Middle East conflict

March 10 (Reuters) - Air New Zealand suspended its fiscal 2026 earnings ‌forecast on Tuesday, citing the ‌recent escalation of conflict in the Middle East ​and unprecedented volatility in global jet fuel markets.

New Zealand's flag carrier had forecast second-half earnings to be ‌flat or weaker ⁠than the first half in its interim results last ⁠month, when it posted a loss before tax of NZ$59 million.

"Since that ​time, conflict ​in the ​Middle East has ‌led to extreme volatility in jet fuel markets," Air NZ said in its statement.

"Jet fuel prices, which were around $85 to $90 per barrel prior to ‌the conflict, have increased ​sharply to between $150 ​and $200 per ​barrel in recent days."

Fuel is ‌the second-largest expense for ​air carriers ​after labour, typically accounting for a fifth to a quarter of ​operating ‌expenses.

($1 = 1.6858 New Zealand dollars)

(Reporting by ​Shivangi Lahiri in Bengaluru; Editing ​by Shilpi Majumdar)