Air New Zealand hit with $59m first-half loss

“Passenger revenue improved four percent to $3 billion, supported by additional capacity across the Tasman and Pacific Islands, and a higher mix of premium seats on long-haul international routes,” Air New Zealand said in a statement.

“Network capacity overall was broadly flat, with up to eight aircraft grounded at times due to global engine maintenance delays.

“The airline experienced a slower than expected recovery in domestic demand; however, international performance was supported by continued strong offshore bookings, particularly in the premium cabins. Demand for outbound long-haul travel remained subdued.”

Air New Zealand chief executive Nikhil Ravishankar said the carrier is “undertaking a comprehensive review of all aspects of the business, with the objective of returning the airline to sustained profitability through enhanced operational performance, growth and further cost transformation initiatives.”

“At the same time, a number of performance and product improvements are already underway, including improvements in domestic punctuality and reliability, and a decision to upgrade the interiors of our existing 777 fleet, so our widebody product is consistent, modern and mission ready,” he said.

“While we are disappointed that the engine availability issues have taken longer than anticipated to resolve, we are pleased with recent progress and now expect a total of four grounded Airbus neo and Boeing 787 aircraft to return to service throughout the 2026 calendar year.

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“We will also take delivery of two of ten new 787 aircraft later in the financial year, providing widebody capacity growth of around 20 percent to 25 percent over the next two years.

“I want to thank our customers for their loyalty and Air New Zealanders for their ongoing professionalism and care for customers and each other as the tough operating environment persists.”

According to the airline’s chair, Dame Therese Walsh, the board had asked Ravishankar to undertake a “full strategy review” when he took over from former chief executive Greg Foran, due to “ongoing volatility, including continued global engine maintenance impacts and a slower recovery in domestic demand”.

“As New Zealand’s national airline we play an important role in supporting New Zealand, particularly as it relates to export and tourism,” she said.

“The strategy reset will allow us to be firmly focused on strengthening and growing our airline to deliver long term growth and prosperity for New Zealand.”

Though new and returning aircraft are expected to add capacity in the second half, Air New Zealand has warned that “improvements in aircraft availability are unlikely to translate immediately into earnings uplift”.

“This is because widebody capacity cannot be operationalised into the schedule and sold at short notice. The primary constraint is uncertainty in the timing of aircraft and engine returns, which limits the ability to plan and sell additional flying with confidence,” the airline said.

“Disruption-related costs and inefficiencies also take time to unwind, including the return of leased aircraft and engines.

“Aviation system and supply chain cost pressures are expected to continue, reinforcing the importance of fit-for-purpose aviation sector settings that support sustainable connectivity and affordability for customers over time.”

Air New Zealand was Asia-Pacific’s second most on-time airline in 2025 according to Cirium, with 79.29 per cent of its flights arriving on time last year, placing it behind only Philippine Airlines at 83.12 per cent.