Air New Zealand has announced its earnings for the 2025 financial year, posting a net profit after tax of $126 million.
That’s down from $146 million in the 2024 financial year.
This afternoon, Air New Zealand chief executive Greg Foran told RNZ that passengers should expect a 5% increase for airfares soon to offset the rising operating costs.
The airline said earnings before taxation were $189 million for the 2025 financial year, compared with $222 million year prior. This result was at the upper end of the guidance range provided to the market in April.
Chairwoman Dame Therese Walsh said today’s announcement was “a solid result”, despite ongoing global engine maintenance challenges, significant cost inflation and a soft domestic market.
“While near-term challenges remain, our balance sheet is strong, and our strategy is clear,” she said.
Passenger revenue dipped by 2% to $5.9 billion, driven by a 4% reduction in overall network capacity from engine availability constraints.
Fuel costs fell 12% ($208 million) reflecting a decline in average jet fuel prices and lower volumes of fuel consumption in line with constrained capacity. However, non-fuel operating costs rose approximately $235 million driven by higher landing charges, labour costs and engineering materials.
This represented a year-on-year increase of around 6%, as system-wide aviation costs continue to rise faster than the New Zealand Consumer Price Index.
The national carrier said this pricing pressure was expected to persist.
The airline maintained a disciplined focus on cost control. Targeted actions included renegotiating supplier contracts, reprioritising investment spend and further embedding procurement discipline across the business to deliver greater value.
Walsh said based on the result announced today, and reflecting that confidence, the Board declared a final unimputed ordinary dividend of 1.25 cents per share.
“During the year, Air New Zealand was also pleased to return $38 million to shareholders through the share buyback programme announced in February,” she said.
In February Foran, who will step down later this year, had warned 2025 would be “particularly challenging financially”, as the airline navigated having up to 11 jets 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,” he said.
Signs of improvement into 2026
While groundings related to engine availability constraints would continue into 2026, the airline noted signs of gradual improvement are beginning to emerge.
“While we’re not through it yet, we are seeing early signs that the most acute phase of disruption will be behind us within the year. The path to recovery won’t be linear, but we’re approaching it with focus and discipline,” Foran said.
In the year ahead more than half of the airline’s existing Boeing 787 fleet was expected to be flying with fully modernised, premium-focused interiors.
“Air New Zealand will also take delivery of its first two new Boeing 787s fitted with GE-powered engines, a major milestone in the long-term fleet renewal strategy. These aircraft, alongside an additional A321neo and ATR, will support increased capacity within New Zealand, across the Tasman and to North America, particularly during the peak summer period.
“We know what needs to happen to lift our financial performance,” Foran said.
“Good progress is already underway, and it will become increasingly evident as the network scales back up and our transformation work continues.”
