The Air New Zealand Ltd (ASX: AIZ) share price is in focus today as the company posted a half-year loss of $40 million after tax and announced no interim dividend, impacted by engine maintenance delays and rising costs.
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What did Air New Zealand report?
- Operating revenue up 1.2% to $3.44 billion for 1H FY26
- EBITDA of $347 million
- Loss before taxation of $59 million (compared to prior period profit of $144 million)
- Net loss after taxation: $40 million
- Liquidity at $1.3 billion; net debt to EBITDA of 2.6x
- No interim dividend declared
What else do investors need to know?
The half-year loss was mainly driven by global engine maintenance issues, slower-than-hoped domestic demand recovery, higher aviation system costs, and a weaker New Zealand dollar. Up to eight aircraft were grounded at times, reducing capacity and contributing to $90 million in lost earnings despite partial compensation from engine makers.
A strategic review is underway, with the airline focusing on returning to sustained profitability amid ongoing cost pressures. Air New Zealand is also progressing operational improvements, such as upgrading its Boeing 777 interiors and refreshing its loyalty program.
What did Air New Zealand management say?
Chief Executive Officer Nikhil Ravishankar said:
With the support of the Board we are undertaking a comprehensive review of all aspects of the business, with the objective of returning the airline to sustained profitability through enhanced operational performance, growth and further cost transformation initiatives… While we are disappointed that the engine availability issues have taken longer than anticipated to resolve, we are pleased with recent progress and now expect a total of four grounded Airbus neo and Boeing 787 aircraft to return to service throughout the 2026 calendar year. We will also take delivery of two of ten new 787 aircraft later in the financial year, providing widebody capacity growth of around 20 percent to 25 percent over the next two years.
What's next for Air New Zealand?
The airline expects second half capacity to rise as grounded aircraft return and new planes arrive, but cautions that earnings may not immediately benefit. Air New Zealand forecasts 2H26 earnings broadly in line with or modestly below the first half, assuming jet fuel averages US$85 per barrel.
Key risks remain, including the timing of aircraft returns, the outcome of further compensation talks, and ongoing volatility in costs and demand. The strategic review will target operational improvements and a renewed focus on sustainable growth and connectivity.
Air New Zealand share price snapshot
Over the past 12 months, Air New Zealand shares have declined 10%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 11% over the same period.
