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Air New Zealand has reported a loss before taxation of $59 million for the six months to Wednesday, December 31, 2025, compared with earnings before taxation of $144 million in the prior corresponding period.
The net loss after taxation was $40 million. EBITDA was $347 million.
The result reflects ongoing global engine maintenance delays, a slower than expected recovery in domestic demand, rising aviation system costs and a weaker New Zealand dollar. The outcome was slightly outside the guidance range of a $30 million to $55 million loss provided in October 2025, largely due to a $13 million headwind from higher-than-assumed fuel prices in the second quarter.
The airline received $55 million in compensation from engine manufacturers during the half but estimates a further $90 million of earnings could have been realised had aircraft been available as planned. Negotiations with manufacturers are continuing.
Air New Zealand chair Dame Therese Walsh says the Board has initiated a full strategy review.
“Given the ongoing volatility, including continued global engine maintenance impacts and a slower recovery in domestic demand, the Board and I asked Nikhil to undertake a full strategy review when he took up the chief executive role in October.
“As New Zealand’s national airline we play an important role in supporting New Zealand, particularly as it relates to export and tourism. 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,” says Therese.
Chief executive Nikhil Ravishankar says the airline is reviewing all aspects of the business to return to sustained profitability.
“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.
“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. We will also take delivery of two of ten new 787 aircraft later in the financial year, providing widebody capacity growth of around 20 per cent to 25 per cent over the next two years,” says Nikhil.
Revenue and costs
Passenger revenue increased 4 per cent to $3 billion, supported by additional capacity across the Tasman and Pacific and a higher mix of premium long-haul seats. Network capacity was broadly flat, with up to eight aircraft grounded at times.
Fuel costs rose 4 per cent to $774 million. Although Singapore jet fuel averaged around US$88 per barrel compared with US$91 in the prior period, the benefit of lower prices was offset by a weaker New Zealand dollar, higher CORSIA costs and the operation of less fuel-efficient aircraft.
Non-fuel operating cost inflation of approximately $75 million was driven by higher domestic passenger levies, engineering and maintenance costs, and airport charges.
The airline delivered around $45 million in incremental benefits through its Kia Mau transformation programme during the half, bringing cumulative benefits to approximately $145 million since inception.
Dividend and outlook
No interim dividend has been declared, in line with the airline’s Capital Management Framework.
Based on current trading conditions and assuming an average jet fuel price of US$85 per barrel for the second half, Air New Zealand expects second-half earnings to be broadly in line with, or modestly below, the first half.
The outlook remains subject to uncertainty, including engine return schedules, compensation arrangements and volatility in demand and input costs.
