Feb 26 (Reuters) – Air New Zealand said on Thursday it was carrying out a strategic review of its business after reporting a worse-than-expected first-half loss due to engine maintenance delays, weak travel demand and higher costs.
The flag carrier’s earnings have shrunk substantially over the past few years as global engine maintenance issues kept its aircraft grounded. This, along with a weaker recovery in travel demand and higher costs, drove the carrier to post a half-year loss for the first time in four years.
“We are undertaking a comprehensive review of all aspects of the business, with the objective of returning the airline to sustained profitability,” said Chief Executive Officer Nikhil Ravishankar in his first results announcement since taking the helm in October.
For the six months ended December 31, Air New Zealand reported a loss before tax of NZ$59 million ($35.38 million), significantly wider than the Visible Alpha consensus estimate of a loss of NZ$21 million.
That compared with a profit of NZ$144 million a year ago.
The airline did not declare an interim dividend, and forecast second-half earnings to be flat or weaker than the first half, predicting continued pressure from aviation system and supply chain costs.
($1 = 1.6675 New Zealand dollars)
(Reporting by Nichiket Sunil and Roushni Nair in Bengaluru; Editing by Alan Barona)
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