Air New Zealand says high fuel costs and maintenance constraints pushed the airline to its largest annual loss in three years.
The carrier has been dealing with engine maintenance problems since 2023, when Pratt & Whitney recalled more than 1000 engines used on Airbus aircraft for inspections, leading to intermittent groundings in subsequent years.
Engine availability issues cut Air New Zealand’s profit by an estimated $NZ190 million ($A173 million) for the year ended June 30, while the Middle East conflict added $NZ205 million to its fuel bill after hedging, versus expectations at the start of the second half of the year.
CEO Nikhil Ravishankar said the disruption from engine issues is easing substantially as Air New Zealand works with Rolls-Royce and Pratt & Whitney to return grounded aircraft to service ahead of schedule, improving fleet availability by the end of the financial year.
“There are still residual risks and costs to work through, but we enter 2027 in a considerably more reliable fleet position,” he said.
Air New Zealand swung to a loss before taxation of $NZ336 million ($A277 million), smaller than the $NZ356.5 million pretax loss forecast by Visible Alpha.
Air New Zealand said it was not yet in a position to provide an earnings forecast for 2027, citing volatile jet fuel prices and continued uncertainty around the Middle East conflict.
The airline expects fiscal 2027 to be a year of transition and recovery, with operational performance improving even as elevated fuel prices weigh on profitability.
Air New Zealand did not declare a final dividend.
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