Air New Zealand full-year profit falls 15%, sees weakness ahead

[WELLINGTON] Air New Zealand posted a 15 per cent drop in full-year earnings as engine maintenance issues hurt revenue, and indicated there is no immediate relief in sight.

Pretax profit fell to NZ$189 million (S$142 million) in the 12 months to June, the Auckland-based airline said on Thursday (Aug 28). While the result was at the top end of its guidance, the company said that it could have been about NZ$165 million greater had its fleet operated as intended.

The airline, 51 per cent owned by the government, has been hamstrung by groundings due to extra maintenance on Pratt & Whitney and Rolls-Royce engines worldwide, and at one stage had 11 jets out of service in late 2024. In addition, New Zealand’s cooling economic growth has impacted business and leisure travel.

“We are confident in the medium-term recovery path, but note the next year will likely be every bit as constrained as the last,” chief executive officer Greg Foran said. “Unfortunately, there are no quick fixes, and navigating the next two years will require the same focus and discipline we have shown to date.”

He expects groundings related to engine constraints will continue into 2026, while a fresh challenge is an estimated NZ$85 million increase in aviation costs driven by increased air navigation fees, passenger levies and landing charges.

The uncertainty over compensation from engine manufacturers together with aviation costs and the sluggish economy, is expected to adversely impact the financial performance in the half year to December, the airline said.

It forecasts that first-half pretax profit will be similar to or less than the NZ$34 million achieved in the six months ended Jun 30. That would be at least a 78 per cent drop on the NZ$155 million reported in the six months through December 2024. BLOOMBERG