Air New Zealand has announced an interim $40 million net loss after tax for the first half of the 2026 financial year.
Released on the NZX this morning, the flagship carrier posted a loss before tax of $59 million, citing ongoing volatility, including continued global engine maintenance impacts and a slower recovery in domestic demand.
This compared to before tax earnings of $144 million in the prior corresponding period.
"This result reflects the combined impact of ongoing fleet constraints, a slower recovery in domestic demand and rising costs, including persistently high aviation system inflation," it said in a statement.
"Cost pressures have been further exacerbated by a weaker New Zealand dollar. The result is slightly outside the guidance range of a loss of $30 to $55 million provided to the market in October 2025, primarily reflecting a $13 million headwind from higher-than-assumed fuel prices in the second quarter."
Air New Zealand board chairperson Dame Therese Walsh said the Board asked Nikhil Ravishankar to undertake a full strategy review when he took up the chief executive officer role in October.
“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," she said.
While the airline received $55 million in compensation from engine manufacturers for the first half, it estimated an additional $90 million of earnings could have been included within the result had the fleet operated as intended. The airline was in ongoing negotiations with engine manufacturers to improve certainty around engine return schedules and appropriate compensation.
Ravishankar said "with the support of the Board we are undertaking a comprehensive review of all aspects of the business, with the objective of returning the airline to sustained profitability through enhanced operational performance, growth and further cost transformation initiatives".
"At the same time, a number of performance and product improvements are already underway, including improvements in domestic punctuality and reliability, and a decision to upgrade the interiors of our existing 777 fleet, so our widebody product is consistent, modern and mission ready."
He said while the airline was "disappointed that the engine availability issues have taken longer than anticipated to resolve", there were other
"We are pleased with recent progress and now expect a total of four grounded Airbus neo and Boeing 787 aircraft to return to service throughout the 2026 calendar year. We will also take delivery of two of 10 new 787 aircraft later in the financial year, providing widebody capacity growth of around 20% to 25% over the next two years.
"I want to thank our customers for their loyalty and Air New Zealanders for their ongoing professionalism and care for customers and each other as the tough operating environment persists".
Based on the result announced today, the Board did not declare an interim dividend.
Air NZ reported passenger revenue improved 4% to $3 billion, supported by additional capacity across the Tasman and Pacific Islands, and a higher mix of premium seats on long-haul international routes.
Fuel costs were $774 million, an increase of 4%, and non-fuel operating cost inflation of approximately $75 million was driven primarily by higher mandated domestic passenger levies, engineering and maintenance costs, and airport landing charges.
It said based on current trading conditions and assuming an average jet fuel price of US$85 per barrel for the second half, Air New Zealand expected second-half earnings to be broadly in line with, or modestly below, the first half.
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