Air New Zealand has reported a $40 million net loss for the first half of the 2026 financial year as ongoing global engine maintenance delays, slower domestic demand and rising system costs weighed on performance.
The airline posted a loss before taxation of $59m for the six months to December 31, 2025, compared with earnings before taxation of $144m in the prior corresponding period. EBITDA for the half was $347m.
Air New Zealand says the result was largely driven by global engine maintenance delays, a slower than expected recovery in domestic demand, increasing aviation system costs and a weaker New Zealand dollar.
The result was slightly outside the guidance range of a $30m to $55m loss provided in October, primarily reflecting a $13m headwind from higher-than-assumed fuel prices in the second quarter.
The airline received $55m in compensation from engine manufacturers in the half, but estimates an additional $90m of earnings could have been included had the fleet operated as intended. Negotiations with manufacturers over further compensation are ongoing.
No interim dividend was declared, in line with the airline’s capital management framework.
Chair Dame Therese Walsh says the board has initiated a full strategy review in response to ongoing volatility and fleet constraints.
“As New Zealand’s national airline we play an important role in supporting New Zealand, particularly as it relates to export and tourism. The strategy reset will allow us to be firmly focused on strengthening and growing our airline to deliver long term growth and prosperity for New Zealand,” Walsh says.
Chief executive Nikhil Ravishankar says the review aims to return the airline to sustained profitability through improved operational performance, growth and further cost transformation initiatives.
The airline expects four grounded Airbus neo and Boeing 787 aircraft to return to service during the 2026 calendar year and will take delivery of the first two of ten new GE-powered 787s later in the financial year, supporting widebody capacity growth of about 20% to 25% over the next two years.
Passenger revenue rose 4% to $3 billion, supported by additional capacity across the Tasman and Pacific Islands and a higher mix of premium seats on long-haul routes. Network capacity overall was broadly flat, with up to eight aircraft grounded at times due to engine maintenance delays.
Fuel costs increased 4% to $774m. While Singapore jet fuel prices were lower on average than the prior period, the benefit was offset by a weaker New Zealand dollar, higher CORSIA obligations and the operation of less fuel-efficient aircraft.
Non-fuel operating cost inflation of about $75m was driven by higher domestic passenger levies, engineering and maintenance costs and airport landing charges.
Air New Zealand says second-half earnings are expected to be broadly in line with, or modestly below, the first half, assuming an average jet fuel price of US$85 per barrel.
However, the outlook remains subject to uncertainty, including engine return schedules, the timing and amount of compensation and continued volatility across key input costs and demand conditions.
