Air New Zealand warns of tough year ahead after profit drop
Air New Zealand reported a 61% drop in annual profit on Thursday and warned of potential impacts from sticky inflation, intense competition and engine-related maintenance issues in the first half of next financial year, sending its shares lower.
The country’s flagship carrier said competition from its U.S. counterparts and high inflation have chipped off demand, while engine maintenance requirements from Pratt & Whitney have delayed aircraft availability.
Pratt & Whitney last year removed more than 1,000 engines from Airbus planes, which led to the grounding of Air New Zealand planes intermittently. It had a significant impact on the airline’s performance in fiscal 2024, Air New Zealand said.
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“Air New Zealand is expecting a challenging year ahead,” CEO Greg Foran said in a statement.
The unfavourable trading conditions are expected to remain similar through the first half of the 2025 financial year, the carrier said without providing guidance for the year ahead.
The airline said it would make targeted adjustments to its overall cost base, including a near 2% reduction in headcount.
Air New Zealand’s earnings before tax fell to NZ$222 million ($138.55 million) from NZ$574 million a year earlier. The figure, however, beat a Visible Alpha consensus estimate of NZ$176.7 million.
The airline expects aircraft-related capital expenditure of NZ$3.2 billion over the next five years.
It declared a final dividend of 1.5 New Zealand cents per share for fiscal 2024.
With information from Reuters
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