Wellington, August 28, 2025 — Air New Zealand has reported a 15% decline in its full-year pre-tax profit, delivering earnings of NZ$189 million (approximately US$111 million) for the fiscal year ending June 30. While this result exceeded analyst expectations (Visible Alpha consensus: NZ$178.6 million), it still marks the airline’s weakest annual performance outside of the pandemic years 2020–2023.
The decline stems largely from ongoing global engine maintenance issues, particularly involving Pratt & Whitney and Rolls‑Royce engines, which have disrupted aircraft availability and capacity. These operational headwinds were compounded by sluggish domestic travel demand, further weighing on the airline’s financial performance.
Chair Dame Therese Walsh cautioned that the challenges are far from over. The airline forecasts that pre-tax earnings for the first half of fiscal 2026 (ending December) could be on par or lower than NZ$34 million, a sharp drop from the NZ$155 million achieved during the same period last year.
Despite the downturn, Air New Zealand has maintained its financial discipline by declaring a final dividend of 1.25 New Zealand cents per share, unchanged from the previous year, signaling a commitment to shareholder returns.
Market Outlook and Strategic Implications
- Operational Pressures Persist
Maintenance issues are expected to continue into FY2026, possibly affecting up to 11 aircraft at any time and limiting capacity flexibility. - Revenue Weakness
With domestic travel demand still soft, the airline faces an uphill battle in recovering its top-line momentum. - Compensation Still a Key Variable
While the airline has received some compensation, lack of clarity on the total amount and timeline leaves financial recovery uncertain. - Dividend Stability Amid Uncertainty
Maintaining the dividend points to strong balance sheet resilience, but sustaining payouts requires prudent cost management.
