Air New Zealand has projected lower earnings for the first half of the financial year 2025 due to persistent engine maintenance delays affecting its fleet. This announcement, made on November 21, 2024, reflects the airline's ongoing challenges with its Airbus A320neo and Boeing 787 aircraft, primarily due to issues with Pratt & Whitney engines. The airline expects its earnings before taxation for the first half of 2025 to range between $120 million and $160 million, a decrease from the $185 million reported in the previous year's first half.
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This forecast includes approximately $10 million of unused travel credit breakage, $30 million of compensation from engine manufacturers for prior periods, and a gain of about $20 million from the sale and leaseback of four A320 aircraft. However, these financial adjustments might not fully offset the operational disruptions caused by the engine issues. Up to six A320neo aircraft and four Boeing 787s, representing over 16% of Air New Zealand's entire jet fleet, have been out of service at various times across the first half of 2025.
These disruptions stem from a global recall of Pratt & Whitney's geared turbofan engines, necessitating accelerated inspections and shop visits. The airline does not anticipate these availability issues to ease until early 2026, which poses significant operational and financial planning challenges. Despite these hurdles, Air New Zealand is exploring options to mitigate capacity constraints, including potential further aircraft leases. CEO Greg Foran noted that while the airline has observed early signs of recovery in corporate travel, government travel demand remains subdued. He also mentioned that competitive capacity adjustments in the North American market during the winter season might influence future demand dynamics.
This situation has led to targeted changes in Air New Zealand's network and schedule, with the airline adapting to maintain service reliability across its routes. The financial impact of these adjustments, coupled with the need to manage operational continuity, has prompted a cautious outlook for the first half of 2025. Air New Zealand's strategy involves balancing the need to service its routes effectively while managing costs during a period where maintenance issues significantly affect its operational capabilities.