{"id":582495,"date":"2026-08-28T01:10:18","date_gmt":"2026-08-28T01:10:18","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/582495\/"},"modified":"2026-08-28T01:10:18","modified_gmt":"2026-08-28T01:10:18","slug":"air-new-zealand-reports-336-million-pre-tax-loss","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/582495\/","title":{"rendered":"Air New Zealand reports $336 million pre-tax loss"},"content":{"rendered":"

Yesterday, its rival Qantas reported a more than $1.5 billion profit after tax<\/a>.<\/p>\n

Air New Zealand said capacity, measured in available seat kilometres (ASK), was up 1.3% across the network as some of its aircraft returned to service.<\/p>\n

But capacity reductions because of extremely high fuel prices countered that.<\/p>\n

With Air NZ not paying a dividend, the Government misses out on $41.2m.<\/p>\n

Whopper fuel bill<\/p>\n

The airline said the Middle East conflict increased its jet fuel bill by about $328m compared to what it expected going into the second half.<\/p>\n

It said even with hedging, the fuel bill was $205m higher than anticipated.<\/p>\n

The airline said the jet fuel price took a $135m bite out of the pre-tax result after fare hikes and cuts to some services.<\/p>\n

Even as some aircraft returned to service and several engine issues were resolved, it said ongoing Rolls-Royce Trent 1000 and Pratt & Whitney PW1100 engine issues impacted the result by about $190m.<\/p>\n

It said that amount was because of lost capacity, additional lease and engine costs, lower fleet use and operating inefficiencies.<\/p>\n

The Trent 1000 is used on 787-9 Dreamliners and the Pratt & Whitney engine on the airline\u2019s smaller Airbus A320 family aircraft.<\/p>\n

But Air NZ said maintenance costs this year should be $50m to $100m less than in the last financial year.<\/p>\n

The airline today also blamed aviation system costs, which it said had risen at more than twice the rate of inflation since 2019.<\/p>\n

Airlines pay fees or levies to entities including airports, the Civil Aviation Authority and air traffic controller Airways NZ.<\/p>\n

\u201cAir New Zealand and our customers\u2019 share of these aviation system charges across New Zealand and the offshore ports we fly to was $1.2b in 2026, a price increase of $142m on 2025,\u201d the airline said today.<\/p>\n

\u201cAviation system costs continue to rise well above inflation, with airport charges expected to increase by upwards of 10% at some ports during the 2027 financial year.\u201d<\/p>\n

Air NZ chief executive Nikhil Ravishankar said the airline had responded decisively to prolonged engine constraints and the sharp increase in fuel prices, while improving the airline\u2019s operational performance.<\/p>\n

\u201cGiven the price sensitivity of air travel, airlines globally have not been able to recover the full increase in fuel costs.\u201d<\/p>\n

He said the airline was making progress on what it could control, including improving on-time performance from 77.5% last year to 84% in the first six months of this calendar year.<\/p>\n

Cargo revenue was down 0.6% to $484m, with higher fuel costs blamed.<\/p>\n

The airline said high jet fuel prices affected freight demand and caused customers to manage their operations and volumes in response.<\/p>\n

Operating costs were up 11.8%, with fuel costs again cited as the culprit.<\/p>\n

The airline said it expected this financial year to be \u201cboth a transition and recovery year\u201d and said operational performance would improve even as it still faced high fuel prices. <\/p>\n

On tourism, Ravishankar said the airline was seeing encouraging inbound demand, with strong forward bookings into New Zealand. <\/p>\n

\u201cThis is a positive signal for tourism and for the country more broadly.\u201d<\/p>\n

Tim O\u2019Loan, Amova Asset Management research analyst, said today\u2019s result was broadly what he was expecting.<\/p>\n

\u201cEngine-related disruptions have been hanging over the business for a long time, and there now seems to be genuine progress on getting the fleet back to a more normal operating position.\u201d<\/p>\n

The biggest challenge was still fuel prices, O\u2019Loan said.<\/p>\n

Volatile times<\/p>\n

Air New Zealand in late February reported a $59m half-year loss before tax.<\/p>\n

The airline started contending with volatile jet fuel prices after the Iran-Israel-US war broke out.<\/p>\n

It suspended its previous earnings guidance<\/a> on March 10 and also announced airfare increases<\/a> that month.<\/p>\n

In April, Forsyth Barr suggested Air New Zealand would lose $229m in the 2026 financial year and $148m in FY2027 before turning a profit.<\/p>\n

In May, the airline announced numerous cuts to domestic and international services<\/a> for travel between July 27 and October 24. <\/p>\n

Late last month, Forsyth Barr forecast a $350.2m pre-tax loss for the airline and said the consensus forecast from market analysts was a $364.4m loss.<\/p>\n

Before the result, Forsyth Barr analyst Andy Bowley said the airline\u2019s key challenges<\/a> apart from soaring jet fuel costs included sluggish demand in New Zealand.<\/p>\n

John Weekes<\/a> is a business journalist covering aviation. He also has experience covering consumer affairs, crime, politics and courts.<\/p>\n

Stay ahead with the latest market moves, corporate updates, and economic insights by subscribing to our Business newsletter<\/a> \u2013 your essential weekly round-up of all the business news you need.<\/p>\n","protected":false},"excerpt":{"rendered":"Yesterday, its rival Qantas reported a more than $1.5 billion profit after tax. Air New Zealand said capacity,…\n","protected":false},"author":2,"featured_media":582496,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[286843,68,9218,1644,685,2225,5836,1132,117,111,43,139,69,69420,766,379,80],"class_list":["post-582495","post","type-post","status-publish","format-standard","has-post-thumbnail","category-new-zealand","tag-286843","tag-air","tag-before","tag-financial","tag-last","tag-loss","tag-lost","tag-million","tag-new","tag-new-zealand","tag-news","tag-newzealand","tag-nz","tag-pretax","tag-reports","tag-year","tag-zealand"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/582495","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=582495"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/582495\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/582496"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=582495"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=582495"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=582495"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}