Air New Zealand has released its full-year results for the year ending 30 June 2025, reporting a drop in profits and passenger revenue but maintaining resilience for a solid performance and improved 2026 outlook amid operational and economic pressures.
The annual FY25 results reported earnings of NZD$189 million (around AUD$170 million), compared with NZD$222 million (around AUD$200 million) for the previous year, which was at the upper end of guidance released in April.
Air New Zealand said the result reflects resilience despite ongoing global engine maintenance challenges, significant cost inflation and a soft domestic market.
Net profit after taxation was NZD$126 million (around AUD$113 million) for the 2025 financial year as passenger revenue reached NZD$5.9 billion (around AUD$5.3 billion), down two per cent, driven by a four per cent reduction in overall network capacity from engine availability constraints.
Fuel costs improved 12 per cent, or NZD$208 million, reflecting a decline in average jet fuel prices and lower fuel consumption in line with constrained capacity.
Non-fuel operating cost inflation of approximately NZD$235 million, a YOY increase of six per cent, was driven primarily by higher landing charges, labour costs and engineering materials.
The airline’s Kia Mau transformation strategy initiatives delivered around NZD$100 million in benefits, driven by stronger ancillary revenue from improved product offerings, ongoing premium demand and digital self-service initiatives such as live chat and automated passenger rebooking.
Operational improvements also contributed, reducing disruption costs and lifting on-time performance by six per cent in the second half. Together, these benefits helped partially offset inflation while laying the foundations for stronger long-term financial performance.
Resilience amid operational and economic pressures
Air New Zealand Chair Dame Therese Walsh said the result reflected the underlying strength of the business as she paid tribute to outgoing CEO Greg Foran, who steps down on 20 October 2025.
“This is a solid result in a year where the airline faced real operational and economic pressure. It speaks to the capability of the team, the robustness of the business and the financial discipline that Greg has instilled during his time as CEO. While near-term challenges remain, our balance sheet is strong and our strategy is clear,” she said.
“Greg has led the business through an extraordinary period. He’s been clear, considered and focused and leaves Air New Zealand in a position of real strength.”
Foran said Air New Zealand carefully managed engine-related disruptions throughout the year, with up to six narrowbody and five widebody aircraft out of service at times.
“We acted early and decisively, securing additional engines and aircraft and optimising our schedule to keep customers moving. While this came at a significant cost, it was the right decision to deliver for our customers and maintain network stability,” he said.
No quick fixes, stay the course in FY26
Despite the challenges, Air New Zealand saw some positive gains in 2025 with four fully retrofitted Boeing 787-9 Dreamliners returning to service, a new crew uniform and plans revealed for a new international Koru Lounge at Auckland Airport by 2027.
“We are confident in the medium-term recovery path but note the next year will likely be every bit as constrained as the last. Unfortunately, there are no quick fixes and navigating the next two years will require the same focus and discipline we’ve shown to date,” Foran said.
While aircraft groundings related to engine availability constraints will continue into 2026, the airline noted that signs of gradual improvement are beginning to emerge.
“Good progress is already underway and it will become increasingly evident as the network scales back up and our transformation work continues,” Foran said.
“While we aren’t yet seeing signs of recovery in the local economy, we remain confident that demand will return and that we’re well placed to respond when it does.”
In the near term, engine challenges, increased aviation costs and subdued domestic demand are expected to adversely impact the airline’s financial performance in the first half of 2026.
Air New Zealand forecasts $34 million in earnings before taxation for the first half of the 2026 financial year – similar to or less than the second half of FY25.
