Air New Zealand Limited (ASX:AIZ) Reports 1H 2025 Interim Results
Financial Performance
Air New Zealand Limited reported earnings before taxation of $155 million for the first half of the 2025 financial year, within the upper guidance range. Net profit after taxation reached $106 million, reflecting an 18% decrease from the previous year. Operating revenue was $3.4 billion, a 2% decline, driven by a 5% drop in passenger revenue to $2.9 billion, though cargo revenue increased by 6% to $257 million.
Operational Update
The airline faced operational challenges with network capacity down by 4%, resulting in the grounding of up to five narrowbody and three widebody jets due to global engine maintenance requirements. In the second half of the financial year, up to 11 jet aircraft are expected to be grounded. Cost control remained a key focus, with fuel costs decreasing by approximately $133 million, while non-fuel operating costs rose by about $100 million due to inflationary pressures.
Dividend and Share Buyback
Reflecting on the company’s strong balance sheet, Air New Zealand declared an unimputed interim ordinary dividend of 1.25 cents per share, payable on 19 March 2025 to shareholders recorded as at 7 March 2025. Additionally, the Board announced a share buyback programme of up to $100 million, signalling confidence in the airline’s long-term outlook.
Future Outlook
Looking ahead, Air New Zealand anticipates continued challenges in 2025 due to ongoing engine maintenance issues. The company is investing in modernising its Boeing 787 Dreamliner fleet and plans to introduce innovations such as digital bag tags and onboard Wi-Fi. Despite current disruptions, the company remains optimistic about future prospects, leveraging its strong financial position to navigate ongoing challenges.
Executive Comments
Chair Dame Therese Walsh stated, “This is a strong result when you consider the headwinds we have been navigating for almost a year now. It reflects the hard mahi and dedication of our 11,600-strong Air New Zealand whānau and the effectiveness of the actions we have taken, and continue to take, to mitigate these challenges and position the airline for future success.”
Chief Executive Officer Greg Foran commented, “While compensation has played an important role in offsetting some of the financial impact of the delays, it falls well short of making the airline whole for the operational and economic losses sustained. We strive to deliver a reliable experience for our customers, however with four percent less capacity available largely due to the engine maintenance delays, this has been a real challenge for the airline.”
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