Air New Zealand trims annual loss as engine crisis eases

Air New Zealand has reported an annual pretax loss of NZ$336 million for the year ended June 30, a narrower shortfall than the NZ$356.5 million analysts had projected. The result, the carrier's largest in three years, was driven by elevated fuel costs and persistent engine maintenance issues.

The airline has been grappling with engine availability problems since 2023, when Pratt & Whitney recalled over 1,000 engines on Airbus aircraft for inspections. This led to intermittent groundings, which the carrier estimates cut profit by NZ$190 million over the year. Separately, the Middle East conflict added NZ$205 million to its fuel bill after hedging, compared with expectations at the start of the second half.

Chief Executive Nikhil Ravishankar said disruption from engine shortages is "easing substantially" as the airline works with Rolls-Royce and Pratt & Whitney to return grounded aircraft ahead of schedule. Fleet availability improved by the end of the financial year, though he cautioned that "residual risks and costs" remain. The company enters fiscal 2027 in a "considerably more reliable fleet position," he added.

Shares rose as much as 3.9% to NZ$0.40, heading for their best session since August 3, outperforming a 0.7% gain in the benchmark S&P/NZX 50 index.

Air New Zealand did not provide an earnings forecast for fiscal 2027, citing volatile jet fuel prices and uncertainty around the Middle East conflict. It described the coming year as one of transition and recovery, with operational performance improving even as elevated fuel prices weigh on profitability. No final dividend was declared.