Company Reports

Competition, fuel prices, and engine maintenance issues are weighing on earnings at Air New Zealand. Pent-up demand from lockdowns is largely exhausted, capacity constraints have eased, and competition is back. As global carrier capacity continues to recover, pricing is under pressure. Switching costs among airlines are negligible and consumers aren't loyal. As carriers increase capacity globally, pricing declines, underpinning our view that all airlines, including Air New Zealand, lack economic moats.

Air New Zealand's fiscal 2026 pretax loss was NZD 336 million, from a NZD 189 million profit last year. Fuel costs surged too quickly for higher ticket prices to meaningfully offset, and Air New Zealand's Brent crude hedges were insufficient amid spiking refining margins.

Air New Zealand expects a fiscal 2026 pretax loss of NZD 340 million-NZD 390 million, primarily due to an elevated fuel bill amid conflict in the Middle East. Leased engine maintenance costs were also higher and compensation from manufacturers lower due to an earlier-than-expected return of engines.

Competition and engine maintenance issues are weighing on earnings at Air New Zealand. Pent-up demand from lockdowns is largely exhausted, capacity constraints have eased, and competition is back. As global carrier capacity continues to recover, pricing is under pressure. Switching costs among airlines are negligible and consumers aren't loyal. As carriers increase capacity globally, pricing declines, underpinning our view that all airlines, including Air New Zealand, lack economic moats.

The global average jet fuel price for the week ending March 13, 2026, was about USD 175 per barrel, per the IATA-Platts Jet Fuel Price Index. This was 76% higher than two weeks prior, before the Iran war began. Brent crude is now well over USD 100 per barrel, up roughly 50% since February.

Competition and engine maintenance issues are weighing on earnings at Air New Zealand. Pent-up demand from lockdowns is largely exhausted, capacity constraints have eased, and competition is back. As global carrier capacity continues to recover, pricing is under pressure. Switching costs among airlines are negligible and consumers aren't loyal. As carriers increase capacity globally, pricing declines, underpinning our view that all airlines, including Air New Zealand, lack economic moats.

Competition and engine maintenance issues are weighing on earnings at Air New Zealand. Pent-up demand from lockdowns is largely exhausted, capacity constraints have eased, and competition is back. As global carrier capacity continues to recover, pricing is under pressure. Switching costs among airlines are negligible and consumers aren't loyal. As carriers increase capacity globally, pricing declines, underpinning our view that all airlines, including Air New Zealand, lack economic moats.

Air New Zealand reported an interim pretax loss of NZD 59 million, slightly worse than guidance and a sharp downturn from NZD 144 million in first-half profit last year. The airline now expects the second half to be similar or worse.

Competition and engine maintenance issues are weighing on earnings at Air New Zealand. Pent-up demand from lockdowns is largely exhausted, capacity constraints have eased, and competition is back. As global carrier capacity continues to recover, pricing is under pressure. Switching costs among airlines are negligible and consumers aren't loyal. As carriers increase capacity globally, pricing declines, underpinning our view that airlines, including Air New Zealand, lack economic moats.

Air New Zealand now expects a first-half fiscal 2026 pretax loss of NZD 30 million to NZD 55 million. The airline previously expected earnings to be similar to, or less than, the second half of last year's NZD 34 million.

Competition and engine maintenance issues are weighing on earnings at Air New Zealand. Pent-up demand from lockdowns is largely exhausted, capacity constraints have eased, and competition is back. As global carrier capacity continues to recover, pricing is under pressure. Switching costs among airlines are negligible and consumers aren't loyal. As carriers increase capacity globally, pricing declines, underpinning our view that airlines, including Air New Zealand, lack economic moats.

Air New Zealand's fiscal 2025 underlying pretax profit was NZD 189 million, down 15% on last year. Capacity fell 4% as engine maintenance requirements grounded up to six wide-body and five narrow-body aircraft, or about 20% of the airline's jet fleet.

Air New Zealand's group capacity is down about 4% for the year to April 2025, with declines across all segments. Revenue per capacity is up about 2%, mostly due to fuller planes. Engine maintenance issues still limit aircraft availability, exacerbated by a soft economic backdrop in New Zealand.

Competition is weighing on earnings at Air New Zealand. Pent-up demand from lockdowns is largely exhausted, capacity constraints have eased, and competition is back. As global carrier capacity continues to recover, pricing is under pressure. Switching costs among airlines are negligible and consumers aren't loyal. As carriers increase capacity globally, pricing declines, underpinning our view that airlines, including Air New Zealand, lack economic moats.

Air New Zealand has provided fiscal 2025 earnings guidance. The airline expects full-year earnings before tax of NZD 150 million to NZD 190 million, 23% lower than last year at the midpoint. Engine maintenance requirements continue to restrict aircraft availability.

Air New Zealand reported interim 2025 underlying pretax profit of NZD 155 million, down 16% on last year due to engine maintenance issues limiting aircraft availability, exacerbated by cost inflation, along with a soft economic backdrop. But it also announced a buyback of up to NZD 100 million.

Competition is weighing on earnings at Air New Zealand. Pent-up demand from lockdowns is largely exhausted, capacity constraints have eased, and competition is back. As global carrier capacity continues to recover, pricing is under pressure. Switching costs among airlines are negligible and consumers aren't loyal. As carriers increase capacity globally, pricing declines, underpinning our view that airlines, including Air New Zealand, lack economic moats.

Despite roaring back to profitability once the skies reopened following the covid-19 pandemic, competition is weighing on earnings at Air New Zealand. Pent-up demand is largely exhausted, capacity constraints have eased, and competition is back. As global carrier capacity continues to recover, pricing is under pressure. Switching costs among airlines are negligible and consumers aren't loyal. As carriers increase capacity globally, pricing declines, underpinning our view that airlines, including Air New Zealand, lack economic moats.

Air New Zealand expects first-half fiscal 2025 pretax profit to be NZD 120 million-NZD 150 million as persistent engine issues affect aircraft availability. This is about 27% lower than the previous corresponding period but more than a threefold increase on the second half of fiscal 2024.

Profitability at Air New Zealand has moderated significantly. Fiscal 2024 underlying profit before tax of NZD 222 million was within guidance and about 2% below our forecast, but down 61% from near-record profits in fiscal 2023. Conditions have normalized. Pent-up demand has exhausted, previously constrained industry capacity has eased, and price competition has returned. The second half deteriorated further from first-half pretax profit of NZD 185 million amid cost inflation, engine maintenance issues, a soft economic backdrop in New Zealand, and increased competition on North American routes.