Air New Zealand sees 14% fall in full-year profit as passenger revenue slides
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The news: Air New Zealand reported a 14% drop in full-year net profit after tax to NZD126 million ($113.5 million), flagging ongoing global engine maintenance challenges, cost inflation and a soft domestic market.
The numbers: Full-year earnings before tax came to NZD189 million, within the upper end of its NZD150-190 million guidance range, which was downgraded in April.
Passenger revenue declined 2% year on year to NZD5.9 billion, driven by a 4% reduction in overall network capacity from engine availability constraints.
Fuel costs improved 12%, or NZD208 million, reflecting a decline in average jet fuel prices and lower volumes of fuel consumption due to constrained capacity.
The airline declared a final dividend of 1.25 NZ cents per share, down from 1.5 NZ cents last year.
Air New Zealand expects to deliver up to NZD34 million in earnings before tax for the first half of the 2026 financial year, "similar to or less than" the second half of FY25.
The context: Air New Zealand flagged "significant' cost inflation during the year, driven by higher landing charges, labour costs and engineering materials. System-wide aviation costs continue to rise faster than the New Zealand consumer price index, the company said, with pricing pressure expected to persist.
CEO Greg Foran said the airline carefully managed engine-related disruptions throughout the year. While the company received $129 million in compensation from engine manufacturers, it estimates that its full-year earnings before tax of NZD189 million could have been around NZD165 million higher had the fleet operated as intended.
The source: ASX
