Air New Zealand reports profits down as engine issues continue to plague carrier

Air New Zealand’s underlying profits for the first half of its 2025 financial year fell as the airline continued to grapple with suppressed demand, other economic factors, and engine issues affecting a significant proportion of its mainline fleet.

The Auckland-based carrier saw its earnings before tax fall to NZ$155 million ($88 mn) for the six months until December 31, 2024. This figure represents a significant drop from NZ$185 million ($105mn) reported in the same year previously. The airline’s net profit also declined by 22% from NZ$129 million ($73mn) to NZ$106 million ($60mn). The underlying profit was near the top end of its NZ$120 million to NZ$160 million ($68mn to $91mn) guidance range given at the start of the fiscal period.

Despite the figures, the airline is remaining positive amid a swathe of ongoing challenges. The airline’s Chair, Dame Therese Walsh said the figures represented a strong result when considering the headwinds the airline had been navigating for almost a year. “Air New Zealand’s strong balance sheet, liquidity, and financial discipline provide us with the flexibility to successfully manage the short-term challenges we face, while also continuing to invest in our future and return capital to our shareholders,” Walsh commented.

Jordan Tan / ShutterstockThe airline will reportedly pay a dividend of NZ1.25c  per share to shareholders for the period, down on NZ2c per share interim dividend paid in 2024. However, the airline plans to announce an up to NZ$100 million ($57mn) share buy-back scheme imminently which will bolster the carrier’s finances as the airline battles with ongoing operational issues. Walsh added that the buy-back reflected the board of directors’ confidence in the airline’s long-term outlook. 

Chief executive Greg Foran expanded on the scale of the issues that have affected the powerplants on its Airbus A320neo family aircraft as well as its Boeing 787 Dreamliners. The airline has faced significant challenges including aircraft groundings which have been associated with additional engine maintenance requirements impacting the Pratt & Whitney GTF engines fitted to its Airbus A320neo family fleet as well as the Rolls-Royce Trent engines on its Boeing 787-9s.

The airline has had numerous aircraft grounded as a result of these issues in recent months. In November 2025, AeroTime reported that up to six of its A320neo family aircraft as well as four of its widebody Boeing 787s were currently out of service due to ongoing engine issues. This number represented almost 20% of the airline’s total fleet of 59 mainline jet aircraft.  

Jordan Tan / Shutterstock“Investment in modern, fuel-efficient aircraft is an important part of Air New Zealand’s fleet strategy. But with more than $1 billion worth of our newest, most efficient aircraft grounded at times, it’s been a tough year so far,” said Foran.

Unflown capacity

Foran added that at some points in recent months, the carrier had seen 5,000 seats per week effectively grounded by the ongoing engine issues, with the resulting loss of millions of dollars in revenue. This fact has been compounded by a fall in passenger revenues by 5% to NZ$2.9 billion ($1.65bn) as the airline saw weaker demand for its services, particularly in the higher-yielding corporate and government segments. 

Despite receiving NZ$94 million ($53mn) in compensation from engine manufacturers, the airline estimates its first-half earnings would have been approximately NZ$40 million ($22.8mn) higher had it been able to operate its full aircraft fleet as intended. 

Steve Worner / Shutterstock“While compensation has played an important role in offsetting some of the financial impact of the delays, it falls well short of making the airline whole for the operational and economic losses sustained,” Foran said. “We strive to deliver a reliable experience for our customers. However, with 4% less capacity available largely due to the engine maintenance delays, this has been a real challenge for the airline.” 

Foran added that 2025 will continue to be financially challenging as it would be the first full year hit by engine problems, with up to 11 jets out of service at any one time. The airline expects its performance for the second half of 2025 to be “significantly lower” than the first half as a result. 

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