Air New Zealand’s Profit Falls: What It Means for Australian and Kiwi Travellers
You probably remember Air New Zealand for their likeable YouTube safety videos showcasing New Zealand and poking fun at themselves with references to The Lord of the Rings and their country. But if you’ve got a trip planned on Air New Zealand (or between New Zealand and Australia), here’s a heads-up: the airline’s latest results show a dip in profit, driven by soft demand and costly engine maintenance. So what does this mean for you?
Air New Zealand’s Financial Results
Air New Zealand recorded a 15% fall in annual profit, with earnings before tax dropping to NZ$189 million, down from NZ$222 million last year. Interestingly, this figure still beat analysts’ expectations of around NZ$178.6 million, showing the airline performed slightly better than predicted.
However, the result marks the airline’s weakest performance in over a decade, excluding the pandemic years, and highlights ongoing operational challenges that continue to affect its bottom line.
Engine Issues and Grounded Jets
One of the biggest contributors to Air New Zealand’s reduced profit has been ongoing engine maintenance failures affecting both its Airbus A321neo and Boeing 787 Dreamliner fleets. At times, up to 11 aircraft have been grounded, which has significantly reduced capacity and forced the airline to cancel or consolidate flights.
The airline received NZ$129 million in compensation from Pratt & Whitney and Rolls-Royce, but reports suggest it could have been NZ$165 million better off without these disruptions.
Sluggish Demand and Future Forecasts
Domestic travel demand has also softened, particularly within New Zealand, while international recovery has not yet returned to pre-pandemic levels. The airline expects its first-half earnings for FY2026 (July to December 2025) to be flat or lower than the NZ$34 million reported in the same period last year. For context, that is a sharp fall from the NZ$155 million earned during the same period in FY2024.
Leadership Changes Ahead
Air New Zealand’s CEO, Greg Foran, has announced he will step down in October 2025, handing over leadership to Nikhil Ravishankar, the airline’s current Chief Digital Officer, who is expected to bring a stronger focus on digital innovation. Passengers could soon benefit from improved booking systems, enhanced mobile tools, and better in-flight technology as Ravishankar implements his strategy.
Dividends Hold Steady
Despite weaker profits, Air New Zealand is maintaining a final dividend of 1.25 NZ cents per share, unchanged from last year, signalling confidence in the airline’s long-term recovery plans.
What This Means for Australian Travellers
For Australians flying to or through New Zealand, these results could have several practical impacts.
1. Fewer Flight Options
With some jets grounded, there may be reduced seat availability on certain trans-Tasman and international routes. If you are planning a trip to Queenstown, Auckland or Christchurch, it is wise to book early to secure the best fares and times.
2. Potential for Delays and Schedule Changes
Ongoing maintenance challenges could lead to possible disruptions. Travellers with connecting flights should consider adding extra buffer time between legs to minimise the risk of missed connections.
3. Investment in Passenger Experience
Despite financial pressures, Air New Zealand continues to upgrade its fleet and lounges, including retrofitting its Boeing 787 Dreamliners and opening a new international lounge at Auckland Airport. These improvements indicate the airline is committed to maintaining passenger comfort even during tighter times.
4. Digital Enhancements on the Horizon
With Nikhil Ravishankar stepping into the CEO role, passengers could soon see smarter booking tools, better app functionality, and improved real-time support during travel disruptions.
Takeaways
Expect slightly higher airfares and possibly tighter schedules in the short term as Air NZ juggles maintenance and costs. Given this, savvy travellers might book early, compare alternative carriers (especially on popular NZ–Australia routes), or stay alert for promotions (competition from other airlines may still bring deals). The airline’s leadership change (with incoming CEO Nikhil Ravishankar taking the helm later in 2025) has been announced, but for now, operations continue as normal. Ultimately, while this profit dip highlights challenges, it doesn’t mean Air New Zealand will cut service – it means they’re being cautious. The network remains intact, and the airline promises it’s “well‑positioned for recovery” once these issues ease.
