- 1H 2026 Loss before taxation of $59 million
- 1H 2026 Net loss after taxation of $40 million
- 1H 2026 EBITDA of $347 million
- Result largely driven by global engine maintenance delays, slower than expected recovery in domestic demand, increasing aviation system costs and a weaker NZD
- Strategic review underway to reset the business amid continuing cost escalation across the aviation system and supply chain
- No interim dividend declared, in line with the airline's Capital Management Framework
- Based on current trading conditions and assuming an average jet fuel price of US$85 per barrel for the second half, Air New Zealand expects second-half earnings to be broadly in line with, or modestly below, the first half
- The airline will take delivery of the first two of ten new GE-powered 787s at the end of the financial year supporting widebody capacity growth of approximately 20% to 25% over the next two years
- Continued advocacy for fit-for-purpose aviation sector settings that underpin connectivity and affordability
Air New Zealand today announced a loss before taxation of $59 million for the first half of the 2026 financial year, compared with earnings before taxation of $144 million in the prior corresponding period. The net loss after taxation was $40 million.
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. 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.
While the airline received $55 million in compensation from engine manufacturers for the first half, it estimates an additional $90 million* of earnings could have been included within the result had the fleet operated as intended. The airline is in ongoing negotiations with engine manufacturers to improve certainty around engine return schedules and appropriate compensation.
Chair Dame Therese Walsh said "given the ongoing volatility, including continued global engine maintenance impacts and a slower recovery in domestic demand, the Board and I asked Nikhil 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."
Chief Executive Officer Nikhil Ravishankar went on to say that "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.
"While we are disappointed that the engine availability issues have taken longer than anticipated to resolve, 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 ten new 787 aircraft later in the financial year, providing widebody capacity growth of around 20 percent to 25 percent 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."
1H 2026 Financial performance
Passenger revenue improved four percent 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. Network capacity overall was broadly flat, with up to eight aircraft grounded at times due to global engine maintenance delays.
The airline experienced a slower than expected recovery in domestic demand however international performance was supported by continued strong offshore bookings, particularly in the premium cabins. Demand for outbound long-haul travel remained subdued.
Fuel costs were $774 million, an increase of 4 percent. Singapore jet fuel averaged around US$88 per barrel compared to US$91 per barrel in the prior period. The lower fuel price was more than offset by a weaker New Zealand dollar, an increase in the cost of the airline's CORSIA obligations and the operation of less fuel-efficient aircraft due to global engine constraints.
