Air New Zealand Has Been Paying *How Much* for Fuel?
I spent time last week with the airline's CEO. He called the current situation a crisis.
Dear readers,
Last month, several U.S. airline CEOs treated us to some classic American optimism, telling JP Morgan’s Jamie Baker that they'll still make money despite expensive fuel prices. As much as I love to poke at executives who spout rosy talk when it is not warranted, they have a point: On the whole, U.S. consumers have plenty of money, and they want to keep traveling. Plus, before the fuel crises, fares had been historically reasonable, as they hadn’t kept pace with post-Covid inflation.
However, some airlines elsewhere lack such optimism. Last week, I spent time in Auckland with Air New Zealand CEO Nikhil Ravishankar,1 and I learned he’s treating this situation far differently than Ed Bastian, who has told investors that Delta should recover all of the run-up in fuel within a couple of months. Before this crisis, Air New Zealand already had raised prices to cover its increased costs (like airport charges), and Ravishankar said he’s not sure how much more his market can bear.
“The world is volatile, and so it’s tempting to use the term unprecedented against every crisis we see,” Ravishankar said. “Some qualify as unprecedented crises, and some don’t. This is as unprecedented and as existential, I think, as it gets.”