(Reuters) -Air New Zealand on Thursday posted a smaller-than-expected drop in 2025 full-year profit, but warned that ongoing engine maintenance issues and subdued domestic demand would further squeeze its earnings in the ongoing financial year.
New Zealand’s flagship carrier cautioned that its pre-tax earnings in the first half of fiscal 2026, ending December this year, will be either on par or lower than the NZ$34 million ($19.96 million) it earned in the previous six months.
That’s a steep drop from NZ$155 million earned during the July-December period last year.
“The year ahead will still have its challenges … Engine constraints will also remain a factor,” said Chair Dame Therese Walsh while noting that fiscal 2026 would likely be as constrained as this one.
The 2025 financial year marked the airline’s first full 12-month period of operations, during which performance was affected by global engine maintenance issues involving Pratt & Whitney and Rolls-Royce engines.
For the year ended June 30, the airline’s earnings before tax came in at NZ$189 million, better than the Visible Alpha consensus of NZ$178.6 million but below last year’s NZ$222 million.
It is still its weakest earnings in 13 years, excluding its losses in financial years 2020-2023 when pandemic-related restrictions impacted travel, as per a Reuters calculation based on data compiled by LSEG.
It declared a final dividend of 1.25 New Zealand cents per share, same as last year.
($1 = 1.7033 New Zealand dollars)
(Reporting by Rajasik Mukherjee and Keshav Singh Chundawat in Bengaluru; Editing by Alan Barona)
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