Air New Zealand says although engine availability constraints will continue next year, it is seeing signs of improvement.
The airline announced 2025 earnings before tax of $189 million, down from $222 million the previous year, said to reflect significant cost inflation, a soft domestic market and its on-going engine issues. NZ ceo Greg Foran says up to six narrowbody and five widebody aircraft were out of service at times throughout the year. “We acted early and decisively, securing additional engines and aircraft and optimising our schedule to keep customers moving. While this came at a significant cost, it was the right decision to deliver for our customers and maintain network stability.” The results show that passenger revenue declined 2% to $5.9 billion, driven by a 4% reduction in overall network capacity due to its engine availability constraints. On the upside, its fuel costs improved 12%, or $208 million, reflecting a decline in average jet fuel prices and lower volumes of fuel consumption in line with constrained capacity. Available seat capacity was down 4%, with up to six narrowbody and five widebody jets grounded due to additional global engine maintenance requirements, adds the carrier.
. . . The Trade
Although ongoing engine availability constraints impacted capacity, NZ’s chief commercial officer Jeremy O’Brien says the carrier ‘worked hard to protect schedule reliability, invest in our customer experience, and ensure our network continued to support our trade partners’. “With four fully-retrofitted Dream-liners now flying, two new 787 aircraft entering the fleet in 2026, and more than half of our 787s soon operating with premium-focused cabins, we are excited about the growing strength of our offering and the feedback from the trade has been very positive.” he adds. “Travel agents and partners are at the heart of helping customers experience these enhancements, and we’re committed to working with our partners to create new opportunities for growth across our network”.
. . . Plans
On the operational front other improvements included reducing disruption costs and lifting its on-time performance by six% in the second half of FY25. “Together these benefits helped partially offset inflation while laying foundations for stronger long-term financial performance,” says the carrier. During the period under review the carrier has also released plans for a new Auckland Airport international lounge and 3000 staff were trained in AI tools to improve services and efficiency.
. . . Outlook
Foran says more than half of its existing 787 fleet is expected to be flying in 2026 with modernised, premium-focussed interiors. NZ will take delivery of its first two 787s fitted with GE-powered engines in 2026. These two aircraft, the A321neo and ATR, will increase capacity for travellers over the summer period within New Zealand, across the Tasman and to North America. “The year ahead will still have its challenges. System-wide aviation costs will be around $85 million higher, driven by increased air navigation fees, passenger levies and landing charges. Engine constraints will also remain a factor.” He says although the local economy is yet to show signs of recovery, NZ remains confident there will be a return of demand