It’s Friday, and the biggest number of the week arrived before the market opened. Here’s what’s moving.
Air New Zealand lost $336 million before tax, and gave no guidance for 2027
Air New Zealand released its 2026 annual result this morning. Loss before taxation was $336 million, against earnings before taxation of $164 million in the restated prior year. Net loss after taxation was $242 million. That is slightly better than the $340 million to $390 million loss the airline guided to in May, and it is not a demand problem: revenue rose 3.9 percent to $7.0 billion and passenger revenue 4.8 percent to $6.1 billion. Operating cash flow fell to $819 million from $940 million. No final dividend.
The airline attaches a number to each of the four causes. Jet fuel, after the Middle East conflict, added an estimated $328 million to fuel cost against what the airline had expected going into the second half, $205 million of that after hedging, and about $135 million to the pre-tax result once fare rises and capacity cuts are counted. Engine availability, meaning the Rolls-Royce Trent 1000 and Pratt & Whitney PW1100 problems, cost an estimated $190 million. Aviation system charges came to $1.2 billion across New Zealand and the offshore ports it flies to, up $142 million on 2025. Maintenance rose $139 million in what the airline calls a peak year. Jet fuel averaged US$111 a barrel across the year against US$88 in 2025.
For anybody selling New Zealand next season, the useful lines are further down. On-time performance went from 77.5 percent in 2025 to 84.0 percent in the second half. Nine of fourteen Boeing 787s have been retrofitted and the rest are due by November. Engine disruption is described as substantially behind the airline, with a residual $70 million to $90 million to carry through 2027. Forward bookings into New Zealand are called strong. And the warning to anyone costing a 2027 programme: airport charges are expected to rise by upwards of 10 percent at some ports.
Stat of the day
US$150
Roughly where jet fuel sat as Air New Zealand signed off these accounts, against a US$111 average across the 2026 financial year and US$88 in 2025. It is the stated reason there is no 2027 earnings guidance. (Air New Zealand 2026 annual results)
Source: Air New Zealand market release · Air New Zealand investor centre
Westport’s link to Wellington flies for the last time today, and Cabinet decides on Monday
Originair’s notice to customers is unusually direct. Its last flights between Wellington and Westport operate today, 28 August. Development West Coast has been funding the route since May while an application to the Regional Investment Fund sits with Kānoa, and the airline says a Cabinet decision on essential air route funding support is expected on 31 August. If the money is approved, Originair says it will work with the government on arrangements to restart.
So a district loses its only direct air link to the capital on a Friday and could get it back on the strength of a Monday meeting. Buller has been here before: the temporary support approved in May was itself a stopgap after months of engagement with government, and the free flight weekends that ran through July and August were a demand-building exercise on a route that has never funded itself on fares alone.
The point worth holding on to is that this is not really about one small aircraft. Originair meets ministers next week about changing the criteria for regional development funding, which is the actual question. Regional air links are treated as economic development projects that have to clear an investment test, while the roads that substitute for them are not tested that way at all.
Source: Originair · Buller District Council · RNZ
Three Otago councils have stopped signing their regional deal
Central Otago District Council, Queenstown Lakes District Council and the Otago Regional Council have paused signing a ten-year regional deal that was close to final a fortnight ago. The trigger was National ruling out an accommodation levy on Sunday under a no-new-taxes commitment, because exploring an accommodation levy in 2027 was one of the things the deal contained.
The councils were careful with the wording: seeking further discussions should not be read as a withdrawal, and they want clarity on the commitments. Queenstown Lakes mayor John Glover put the practical case, which is that roads to popular attractions are expensive, tens of thousands of visitors a year use them, and ratepayers currently carry the bill.
This is the first concrete consequence of Sunday’s announcement, and it lands on the government’s own instrument. Regional deals were designed as the mechanism for getting councils and the Crown to agree on growth infrastructure. If a district can hold back its signature because a party has ruled out a line item during an election campaign, the instrument is worth rather less this week than it was last week.
Source: RNZ
The backpacker sector says a third of holiday arrivals are missing from the strategy
The Backpacker Youth and Adventure Tourism Association told its conference in Tauranga this month that travellers aged 18 to 34 made up 31.5 percent of New Zealand’s holiday arrivals in the year to June, up from 29.5 percent two years earlier, and that the sector is worth $2.8 billion. Those are BYATA’s own figures rather than an official series, so treat them as the association’s numbers. The verified backdrop is Stats NZ: 3,674,600 overseas visitors in the year to June 2026, up 9 percent on the year before, with June itself at 95 percent of June 2019.
The association’s complaint is not about volume. President Brian Westwood says youth tourism “as an identifiable sector remains largely unseen within national tourism strategies”, and Cristine Angus of Angus and Associates argues the segment is still being judged by the old high-value versus low-value framing. BYATA also points to working holiday numbers falling from about 65,000 in 2018 to about 38,000 this year, which is the part that shows up in staff rosters rather than in visitor spend.
For operators the arithmetic is worth sitting with. A cohort supplying close to a third of holiday arrivals is also the cohort that historically staffed the hostels, the rafting bases and the ski fields. Losing it as labour while gaining it as demand is a particular kind of squeeze, and it is not one the current strategy documents have a name for.
Source: Inside Tourism · BYATA · Stats NZ figures, via the Minister
A closed department store reopens as a ticketed attraction on Queen Street
Titanic: The Human Story opens today at 253 to 261 Queen Street, which is the Smith and Caughey’s building. The store closed at 4pm on 15 June 2025 after 145 years and the building went on the market. It now holds an international touring exhibition of original artefacts and recreated ship interiors, produced by Musealia and Fever with Auckland Live, Auckland Museum and the New Zealand Maritime Museum, in an Auckland-exclusive season. Tickets run from $30 to $67.
The exhibition itself is a night out. The interesting part for the visitor economy is the address. Midtown Auckland has been the hardest part of the city centre to fill, and the answer here is not a retail tenant but a paid experience with a fixed season, a short walk from the City Rail Link station that opens on 13 September.
Whether it becomes a pattern depends on whether the numbers work for the operator rather than on how it reads in a council report. But a heritage-listed empty shop earning revenue from ticketed visitors, three weeks before a new train line starts delivering people to the door, is a more useful piece of city-centre thinking than most of what has been proposed for Queen Street in the last decade.
Source: Auckland Museum · Auckland Live · 1News
Coming up
- Today, 28 August July Monthly Regional Tourism Estimates on the revised basis, the last Wellington to Westport flights, and Titanic: The Human Story opens in Auckland
- 28 August to 3 September The North Face Frontier at The Remarkables, Queenstown
- 29 August Crown Princess opens Auckland’s cruise season at Queens Wharf
- 31 August Cabinet decision expected on essential air route funding, the new runway end safety area rule takes effect, and submissions close at 5pm on the Wānaka freedom camping bylaw changes
- Week of 31 August Originair meets ministers on changing the criteria for regional development funding
- 1 September International Visitor Survey for the June quarter, the general whitebait season opens, and Avani Queenstown opens
- 13 September Auckland’s City Rail Link opens to passengers
- November Air New Zealand’s Boeing 787 retrofit programme due to be finished
- Later in 2026 Air New Zealand investor day on strategy and medium-term financial objectives
- October Christchurch Airport’s annual meeting, after which the $27.4 million final dividend is paid, and SkyCity’s annual meeting
- 26 October Air New Zealand becomes the first international airline into Western Sydney Airport
- 7 November General election
- Early 2027 The Central Lakes two-route bus network goes to the Otago Regional Council’s draft 2027-30 Long-Term Plan
- 2027 The Auckland Regional Deal’s commitment to consider accommodation levies falls due
That's today's briefing. The Shoulder Season is back every weekday morning.