Today, 28th August, Air New Zealand reported earnings before taxation of $189 million for the 2025 financial year, compared with $222 million in the prior year.
This result is at the upper end of the guidance range provided to the market in April, and net profit after taxation was $126 million.
The reported results likewise reflect resilience despite ongoing global engine maintenance challenges, significant cost inflation and a soft domestic market.
Airline chair Therese Walsh said the result reflected the underlying strength of the business and the discipline with which it has been run.
Walsh said: “This is a solid result in a year where the airline faced real operational and economic pressure. It speaks to the capability of the team, the robustness of the business, and the financial discipline that Greg Foran has instilled during his time as CEO. While near-term challenges remain, our balance sheet is strong, and our strategy is clear. Based on the result announced today, and reflecting that confidence, the Board has declared a final unimputed ordinary dividend of 1.25 cents per share, payable on 25 September 2025 to shareholders on record as at 12 September 2025. During the year, Air New Zealand was also pleased to return $38 million to shareholders through the share buyback programme announced in February.”
Walsh also took the announcement as an opportunity to thank outgoing airline chief executive Greg Foran who steps down later this year.
She said: “Greg has led the business through an extraordinary period. He’s been clear, considered, and focussed, and leaves Air New Zealand in a position of real strength. On behalf of the Board, I want to thank him for his leadership.”
Results for FY 2025
Passenger revenue declined by two percent to $5.9 billion, driven by a four percent reduction in overall network capacity from engine availability constraints
Fuel costs improved 12 percent, or $208 million, reflecting a decline in average jet fuel prices and lower volumes of fuel consumption in line with constrained capacity.
Non-fuel operating cost inflation of approximately $235 million, was driven primarily by higher landing charges, labour costs and engineering materials.
This represents a year-on-year increase of around six percent, as system-wide aviation costs continue to rise faster than the New Zealand Consumer Price Index; it should be noted that this pricing pressure is expected to persist.
The airline maintained a disciplined focus on cost control, and targeted actions included renegotiating supplier contracts, reprioritising investment spend and further embedding procurement discipline across the business to deliver greater value.
The airline’s Kia Mau transformation initiatives delivered approximately $100 million in benefits, driven by stronger ancillary revenue from improved product offerings, ongoing premium demand and digital self-service initiatives such as live chat and automated passenger rebooking.
Operational improvements also contributed, reducing disruption costs and lifting on-time performance by six percentage points in the second half. Together these benefits helped partially offset inflation while laying foundations for stronger long-term financial performance.
With regard to financial results, CEO Foran said Air New Zealand carefully managed engine-related disruptions throughout the year, with up to six narrowbody and five widebody aircraft out of service at times.
While the airline received $129 million in compensation from engine manufacturers, it estimates earnings before taxation of $189 million could have been approximately $165 million higher had the fleet operated as intended.
Managing things within control
Foran likewise noted that the airline remained focussed on what it could control, making purposeful decisions to support customers and maintain schedule reliability.
He said: “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. We are confident in the medium-term recovery path but note the next year will likely be every bit as constrained as the last. Unfortunately, there are no quick fixes, and navigating the next two years will require the same focus and discipline we’ve shown to date.”
At the same time, the airline continues to work closely with both Rolls-Royce and Pratt & Whitney on compensation arrangements, and to secure a more reliable picture of when engines will return to service.
Foran declared: Despite the challenges, we have delivered meaningful progress this year, with four fully retrofitted Boeing 787-9 Dreamliners returning to service, the unveiling of a new uniform, and the announcement of plans for a new international lounge at Auckland Airport. Investments in infrastructure and digital capability were also made, with a new engineering hangar on track to open later in 2025, the Christchurch Engine Centre expansion progressing well, and around 3,000 staff equipped with AI tools to improve service, speed, and efficiency.These achievements show the airline’s ability to execute against our plan, while seizing opportunities to deliver growth as scale returns.”
