ONGOING engine issues and a sluggish Kiwi economy have seen Air New Zealand’s earnings slide to $189 million for the 2025 financial year, a solid drop on the $222 million recorded for the previous year (TD breaking news).
Net profit after tax also dwindled for the carrier, with the year seeing a $20 million drop to $126 million, while revenue held steady at $6.75 billion.
While saluting the resilience of the carrier in the face of headwinds, outgoing CEO Greg Foran said its earnings before tax figure could have been much higher had Air New Zealand’s fleet operated as intended.
Compensation paid to Air NZ by engine manufacturers during the period saw $129 million added to the bottom line, however Foran said its earnings would have been as much as $165 million higher if all its aircraft were able to fly.
“We acted early and decisively, securing additional engines and aircraft, and optimising our schedule to keep customers moving,” Foran said.
“While this came at a significant cost, it was the right decision to deliver for our customers and maintain network stability.
“The airline continues to work closely with both Rolls-Royce and Pratt & Whitney on compensation arrangements, and to secure a more reliable picture of when engines will return to service.”
While Air NZ said it is confident of a medium-term recovery in 2026, the next 12 months will likely be “every bit as constrained as the last year”.
“Unfortunately, there are no quick fixes, and navigating the next two years will require the same focus and discipline we’ve shown to date,” Foran lamented.
Groundings related to engine availability constraints will continue to impact Air NZ into 2026, with the business stating that the worst of the fleet disruptions will be behind the carrier within the next year.
One of the bright spots for the carrier will be taking delivery of its first two new Boeing 787s fitted with GE-powered engines, described as a “major milestone” in its fleet renewal strategy.
“The aircraft, alongside an additional A321neo and ATR, will support increased capacity within New Zealand, in Australia, and to North America, particularly during the peak summer period.
Air NZ said providing a detailed earnings guidance is challenging, as discussions with engine suppliers around compensation are ongoing, but it expects the first half of the 2026 financial year to be similar or less than its H2 2025 result of $34 million. AB
