Air New Zealand said on Wednesday it expects to swing to profit in the first half of fiscal 2023, underpinned by strong recovery in travel demand and forward sales until at least next January.

Still, the country’s flagship carrier refrained from providing a comprehensive full-year outlook on a “highly uncertain” second half due to global recessionary headwinds, inflationary pressures, volatility in fuel prices.

“The airline notes that fuel prices remain highly volatile and this is one of many factors that have the potential to slow our recovery and significantly impact earnings,” it said.

Air New Zealand losses soar due to sky-high fuel, labour costs

For the first half ending Dec. 31, Air NZ expects earnings before tax in the range of NZ$200 million ($118.00 million) to NZ$275 million, versus a statutory loss before tax of NZ$376 million a year ago.

Shares of the carrier were up as much as 7.4% to NZ$0.73, their highest since May 13.

The company cautioned investors against “extrapolating first-half FY23 earnings forecast to the full year given the many uncertainties in the trading environment”.

Air New Zealand has been running under losses since 2020, and reported a fiscal 2022 loss of NZ$725 million due to COVID-19 restrictions on travel.