Air New Zealand (ASX:AIZ) it forecast pre-tax profits for the first half of fiscal 2025 will be between NZ$120 million and NZ$160 million, down from NZ$185 million in the same period last year. Despite the decline, the forecast significantly exceeds the pre-tax earnings of NZ$37 million reported in the second half of FY24, signaling a potential recovery from recent challenges.
The airline’s improved outlook for the first half comes as it continues to face significant headwinds. Global engine maintenance delays have sidelined six Airbus neos and four Boeing 787s, representing 16% of its jet fleet. These availability issues, which are expected to persist until early 2026, have forced the airline to consider leasing additional aircraft to bolster capacity.
Expected earnings include NZ$10 million from the breakup of unused travel credit, NZ$30 million in compensation from engine manufacturers and a NZ$20 million gain from the sale and leaseback of four A320 aircraft. The forecast assumes an average jet fuel price of $91 per barrel.
The airline has also noticed mixed trends in demand. Corporate travel is starting to recover, while government travel remains subdued. Targeted reductions in competitive capacity on North American routes during the peak northern winter season could provide further 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 improve customer service and efficiency. The airline reiterated that full-year guidance would be provided during the interim results announcement, citing uncertainties in the business and operating environment.
Air New Zealand shares rose following the announcement, reflecting optimism about the company’s efforts. They are currently trading up 2.11% at 48.5 cents.