The Air New Zealand Ltd (ASX: AIZ) share price is in focus after the airline flagged a first-half pre-tax loss of $30 million to $55 million, reversing its prior expectations for a result similar to last half. The company cited weaker-than-expected revenue from key markets and higher costs, including engine lease expenses and carbon obligations.
What did Air New Zealand report?
- Expected first-half 2026 loss before taxation of $30 million to $55 million
- Earlier guidance anticipated a result similar to or below 2H FY25's $34 million profit
- 2%–3% targeted revenue uplift in Domestic and US-bound bookings not achieved; impact is approximately $50 million
- Engine lease costs are expected to increase by around $20 million in 1H 2026
- Mandatory CORSIA carbon scheme to add roughly $10 million to costs this half
- Between 9 and 11 aircraft have remained grounded since the start of FY26
What else do investors need to know?
Air New Zealand's management is actively working on further cost-saving and efficiency measures to offset headwinds such as system-wide cost inflation and subdued demand in business, government, and leisure travel segments. The airline is also advocating for more affordable airport landing charges and third-party costs to help support the wider economy and its own recovery.
The company is carrying the cost of additional fleet and a full workforce to prepare for future recovery, despite current demand weakness. Its Kia Mau transformation programme is on track to deliver cost and revenue benefits in the current financial year.
What's next for Air New Zealand?
Looking ahead, Air New Zealand plans additional capacity growth in the second half of FY26, so first-half results may not reflect the full year's outcomes. The company remains in discussions with engine manufacturers over compensation for grounded aircraft, but the timing and amount remain uncertain.
With ongoing volatility in demand and rising costs, management will provide further market updates as visibility improves. Investors are reminded not to extrapolate the first-half result across the entire year given these factors.
Air New Zealand share price snapshot
Over the past 12 months, Air New Zealand shares have increased 7%, slightly trailing the S&P/ASX 200 Index (ASX: XJO) which has rise around 8% over the same period.
