By Rajasik Mukherjee
(Reuters) – Air New Zealand’s persistent engine issues further bit into its bottomline, as it forecast lower earnings for the first half of financial year 2025, as global engine maintenance delays caused aircraft availability issues, the airline said on Monday.
New Zealand’s flagship carrier expects its earnings before taxation in the first half ending Dec. 31 to be in the range of NZ$120 million ($70.15 million) to NZ$160 million, compared with NZ$185 million it had reported a year earlier.
However, the company’s projected forecast will be much higher than its second-half earnings of financial year 2024. The firm had reported a pre-tax profit of NZ$37 million in the second half of 2024.
Shares of the airline gained as much as 2.8% to NZ$0.550, hitting its highest level since Sept. 13, while the broader benchmark index traded up 0.3% as of 0002 GMT.
The Auckland-based carrier said last year’s engine maintenance issues had dented its 2025 prospects as well.
Earlier this year, the airline had flagged that maintenance needs for its Pratt & Whitney engines led to six of its Airbus neo aircraft being inoperable at times.
On Monday, the company reiterated the ongoing issue. It said engine maintenance delays had caused its six Airbus neo aircraft and up to four Boeing 787 aircraft – 16% of the carrier’s entire jet fleet – to be out of service across the first half of this financial year.
“Disappointing to read that engine availability issues are not expected to ease until 2026,” said Tom McBride, financial adviser at Hamilton Hindin Greene.
Air New Zealand said it would continue to look at leasing further aircraft, among other measures, to improve capacity.
The airline also flagged that domestic travel demand has remained soft. Domestic travel accounts for 65% of the airline’s passengers.
($1 = 1.7106 New Zealand dollars)
(Reporting by Rajasik Mukherjee in Bengaluru; Editing by Ros Russell and Rashmi Aich)
Comments