Air New Zealand Halts Biofuel Purchases Amid Rising Costs and Financial Losses
Air New Zealand reported a pre-tax loss of $59 million for the first half of the 2026 fiscal year, with projections of over $500 million in losses for the current and next year. The airline's fuel costs have risen significantly, leading to a halt in sustainable aviation fuel (SAF) purchases. SAF prices have surged due to increased jet fuel costs, with Air NZ unable to sustain its planned SAF usage. The airline's efforts to increase SAF use and develop domestic production are stalling amid rising market prices and supply chain uncertainties.
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Air New Zealand announced a pre-tax loss of $59 million for the first half of 2026 and is projected to face over $500 million in losses for the fiscal year. The airline's fuel costs have increased, leading to a suspension of sustainable aviation fuel (SAF) purchases.
SAF prices have reached $8.85 per gallon in California, influenced by rising jet fuel costs, which are expected to continue due to market dynamics. Air NZ had aimed to increase SAF usage from 1.7% to 3% of fuel volumes this year, but now reports it cannot afford SAF at current prices. Supply chain issues and limited SAF availability further complicate the airline's plans.
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