Air New Zealand (ASX:AIZ) has forecast pre-tax earnings for the first half of FY25 to be between NZ$120m and NZ$160m, down from NZ$185m during the same period last year. Despite the decline, the guidance significantly exceeds the NZ$37m pre-tax earnings reported in the second half of FY24, signalling a potential recovery from recent challenges.
The airline’s improved outlook for the first half comes as it continues to face substantial headwinds. Global engine maintenance delays have sidelined six Airbus neo and four Boeing 787 aircraft—representing 16% of its jet fleet. These availability issues, which are expected to persist until early 2026, have forced the airline to explore leasing additional aircraft to bolster capacity.
The projected earnings include NZ$10m from unused travel credit breakage, NZ$30m in compensation from engine manufacturers, and a NZ$20m gain from the sale and leaseback of four A320 aircraft. The guidance assumes an average jet fuel price of US$91 per barrel.
The airline also noted mixed trends in demand. Corporate travel is beginning to recover, while government travel remains subdued. Targeted reductions in competitive capacity on North American routes during the peak Northern Winter season may provide additional relief.
Air New Zealand continues to focus on operational improvements, including updates to its Seats-to-Suit offering and the introduction of live chat capabilities to enhance customer service and efficiency. The airline reiterated that full-year guidance would be provided during its interim results announcement, citing uncertainties in the trading and operating environment.
Shares in Air New Zealand rose following the announcement, reflecting optimism about the company’s efforts. They're currently trading 2.11% higher at 48.5 cents.
