Air New Zealand sees lower earnings in first half of 2025 as engine problems persist Reuters

Written by Rajasik Mukherjee

(Reuters) – Air New Zealand’s persistent engine is slowly on its mind, as it forecasts lower earnings in the first half of the 2025 financial year, as global engine maintenance delays cause problems with aircraft availability, the airline said on Monday.

The New Zealand holding company expects pre-tax income for the first quarter ending December 31 to be in the range of NZ$120 million ($70.15 million) to NZ$160 million, compared with the NZ$185 million it reported last year.

However, the company’s proposed forecast will be much higher than its earnings for the second half of the 2024 fiscal year. The company had reported a pre-tax profit of NZ$37 million for the second quarter of 2024.

The airline’s shares gained about 2.8% to NZ$0.550, their highest level since Sept. 13, while the broader benchmark index traded up 0.3% as of 0002 GMT.

The Auckland-based carrier said last year’s engine maintenance problems had hampered its prospects for 2025.

Earlier this year, the airline had flagged that the maintenance requirements of its Pratt & Whitney engines had led to its six Airbus neo aircraft being out of service at times.

On Monday, the company reiterated the ongoing issue. It said engine maintenance delays caused six of its Airbus neo planes and up to four Boeing (NYSE: ) 787 planes — 16% of the company’s total fleet — to be grounded in the first half of this fiscal year.

“It’s disappointing to learn that engine supply issues are not expected to abate until 2026,” said Tom McBride, a financial advisor at Hamilton Hindin Greene.

Air New Zealand said it would continue to look at leasing more aircraft, among other options, to improve capacity.

The airline also flagged that demand for domestic travel remains soft. Domestic travel accounts for 65% of the airline’s passengers.

($1 = 1.7106 New Zealand dollars)