Air New Zealand chief executive Nikhil Ravishankar has conceded the airline's $336 million annual loss is a poor financial result, hours after Prime Minister and the airline's former boss Christopher Luxon called it a "very poor performance".
The FY2026 result, released today, is a sharp nosedive from the $164 million profit the airline booked a year earlier. Passenger revenue rose 4.8% to $6.1 billion, but no dividend was declared.
Luxon, who ran the national carrier for almost seven years before entering politics, was asked about the result at the Leaders of the Realm forum meeting today.
"It's clearly a very poor result. It's clearly a very poor performance, even in the context of global aviation and other airlines as well."
Prime Minister and former airline boss Christopher Luxon called it a "very poor performance". (Source: 1News)
Luxon said it was "really up for them to explain what's caused such a significant loss and also, more importantly, what are they going to do to build a better business?"
Asked whether the Crown – which held a majority stake – would step in, Luxon was unequivocal.
"They're a company that stands alone. We expect them to be commercial, we expect them to deal with their issues and to solve their challenges," he said.
Ravishankar, who took over as chief executive last October, did not argue.
"The financial result is poor," he told 1News.
"The good thing is the operational performance in terms of delivering for our customers, getting our fleet back, and so being able to grow again is very promising. And when the operational performance improves, financial performance follows."
Luxon was warmer about his successor than about the balance sheet.
"I know there's a new CEO who's doing a great job," he said. "We expect them to very quickly turn it around and get the company growing again and performing strongly."
Ravishankar pointed to four headwinds affecting the airline's performance.
The war in the Middle East had pushed fuel prices up and left a $135 million dent in the result, even after the company moved quickly to cut costs. Jet fuel is currently sitting at US$146, against a normal price of about US$85.
Global engine problems cost the airline another $190 million through FY26, while a year of life-cycle aircraft maintenance and avionics spending added to the bill.
The fourth factor was the one Ravishankar said the airline has least control over: the fees, levies and landing charges that make up the cost of running aviation in New Zealand which rose $142 million between FY25 and FY26.
"To put that in context, that's greater than the net impact of the fuel crisis that we're dealing with, but solving it is worth our while. It's good for New Zealand, particularly regional and domestic aviation."
The airline has consolidated its flying until the end of October, and Ravishankar said more could follow into November, December and January if fuel prices stay where they are, though any further cuts would likely be smaller because that is peak season.
Air New Zealand has flagged FY2027 as a transition and recovery year. Ravishankar said the airline would have expected to return to profitability were it not for the fuel crisis.
"It's never a pleasant thing to go through, not least when you come in as a new CEO."
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