Oh dear.

Air New Zealand scraps 2030 emissions target

8:31am today

The news: Air New Zealand is dropping its 2030 carbon intensity reduction target, citing challenges faced in fleet renewal and fuel availability, but it expects to stick to its 2050 net zero aim.

The numbers: The airline said it is withdrawing the target after careful consideration and is working on a new near-term carbon emissions reduction target. In 2022, it outlined a Science Based Targets initiative, requiring a 28.9% reduction in carbon intensity by 2030, from a 2019 baseline. It aims to reduce emissions by 70% by 2050.

The context: Air NZ CEO Greg Foran said on Tuesday many of the levers needed to meet the target, including the availability of new aircraft, affordability and availability of alternative jet fuels, and global and domestic regulatory and policy support are outside the airline’s direct control and remain challenging.

“In recent months and more so in the last few weeks, it has also become apparent that potential delays to our fleet renewal program pose an additional risk to the target’s achievability. It is possible the airline may need to retain its existing fleet for longer than planned due to global manufacturing and supply chain issues,” Foran told investors.

New Zealand’s flagship carrier downgraded its earnings guidance in April amid a continued softening in revenue due to subdued domestic demand and competitive pricing pressures on international routes.

Air NZ withdraws from Science Based Targets initiative

30/07/2024, 09:32 NZST, GENERAL
Air New Zealand withdraws from Science Based Targets initiative

After careful consideration, Air New Zealand is removing its 2030 science based carbon intensity reduction target and will withdraw from the Science Based Targets initiative.
  
Many of the levers needed to meet the target, including the availability of new aircraft, the affordability and availability of alternative jet fuels, and global and domestic regulatory and policy support, are outside the airline’s direct control and remain challenging.

Air New Zealand Chief Executive Officer, Greg Foran says, “In recent months, and more so in the last few weeks, it has also become apparent that potential delays to our fleet renewal plan pose an additional risk to the target’s achievability. It is possible the airline may need to retain its existing fleet for longer than planned due to global manufacturing and supply chain issues that could potentially slow the introduction of newer, more fuel-efficient aircraft into the fleet. As such and given so many levers needed to meet the target are outside our control, the decision has been made to retract the 2030 target and withdraw from the SBTi network immediately.

Work has begun to consider a new near-term carbon emissions reduction target that could better reflect the challenges relating to aircraft and alternative jet fuel availability within the industry.

Air New Zealand Chair, Dame Therese Walsh says, “Air New Zealand remains committed to reaching its 2050 net zero carbon emissions target. Our work to transition away from fossil fuels continues, as does our advocacy for the global and domestic regulatory and policy settings that will help facilitate Air New Zealand, and the wider aviation system in New Zealand, to do its part to mitigate climate change risks.”

Ends
This announcement is authorsed for release on the NZX and ASX by Jennifer Page, General Counsel and Company Secretary, jennifer.page@airnz.co.nz

For investor relations queries contact:
Kim Cootes
Head of Investor Relations
kim.cootes@airnz.co.nz
+64 27 297 0244

For media queries, contact
Air New Zealand Communications media@airnz.co.nz
+64 21 747 320