Air New Zealand has reported a net loss of NZ$40 million ($24 million) for the first-half 2026, ending December 31, 2025. The result swings from its net profit of NZ$98 million ($59 million) a year prior.
Losses before taxes totalled NZ$59 million ($36 million) in the first half, down from its profit before tax of NZ$144 million ($87 million) a year prior. The result exceeds its guidance from October of losses totalling NZ$30 to NZ$55 million ($18-$33 million), which primarily reflected a NZ$13 million ($8 million) headwind from higher fuel prices in the second quarter.
Ongoing engine issues have impacted the airline's earnings. The company said grounded aircraft peaked at eight aircraft during the period. For the second half, the company expects up to three A321neos and up to four 787 Dreamliners grounded at a time.
Air New Zealand CEO Nikhil Ravishankar said during its earnings call it was “pleased with the progress” of getting grounded aircraft back into operation. The airline expects four grounded aircraft to return to service throughout 2026. The company will take delivery of two out of its 10 new 787s later in the year.
The company's CFO Richard Thomson said: “The engine position today is slightly better than what we thought it was going to be at the end of the last financial year.”
“We're seeing better improvement in the second half of this year, which will also help flow on into the 2027 financial year,” said Air New Zealand general manager of corporate finance Leila Peters. “But the increases in capacity across the network over the next two years will be helped by the combination of the engines returning a little bit faster than we thought in August.”
During the first half, the airline received NZ$55 million ($33 million) in compensation from engine OEMs. However, this falls short of the estimated NZ$90 million ($54 million) of earnings that could have been included had these engines been in operation, according to Air New Zealand.
The airline said compensation negotiations are ongoing for the second half.
Engines aside, the company noted a slower recovery in domestic demand and rising costs, including “persistently high aviation system inflation”.
Additionally, a weaker New Zealand dollar has further emphasised its cost pressures.
Revenues were up slightly from NZ$2.9bn ($1.75bn) a year prior to NZ$3bn ($1.8bn), while operating expenses were flat at NZ$3.4bn ($2.05bn). Operating result was NZ$327 million ($197 million), down from NZ$517 million ($312 million).
Second-half earnings are expected to be “broadly in line, or modestly below” the first half — assuming jet fuel price remains at $85 per barrel.