Air New Zealand’s profit drops 39% as operational challenges persist

A pair of Air New Zealand jets being serviced on the tarmac at Queenstown Airport (ZQN).
Edited by Travel Weekly

    Air New Zealand has announced its net profit after tax was $129m for the first half of the 2024 financial year, a 39 per cent drop compared to 1H23.

    This is an expected reduction on the comparable period last year when the airline recorded one of its highest-ever results following the rapid return of air travel as New Zealand’s borders reopened.

    Based on the airline’s balance sheet strength and the result announced today, Air New Zealand shareholders will receive an unimputed interim dividend of 2.0 cents per share. The dividend will be paid on 21 March, to shareholders on record as at 8 March.

    Passenger revenue of $3.1b was up 21 per cent, driven by a significant ramp-up in capacity across the international network. Demand was stable in most markets, but signs of softness in domestic corporate and Government demand was experienced from September. Overall capacity was up 29 percent on the comparative six-month period. Operating costs, including fuel, increased 21 percent due to a substantial increase in long-haul flying this year.

    Inflationary pressures also continue to be felt. Non-fuel operating costs have increased around 5 per cent or $100 million due to price inflation, which is on top of an increase totalling 15 to 20 percent across the last four years. The cumulative effect of these increases is having a significant impact on the cost of providing air services, including on the domestic network, and the airline is currently reviewing fares and capacity to better reflect ongoing cost pressure.

    Chair Dame Therese Walsh says the half year result represents the hard mahi of the Air New Zealand whānau, who rallied together in the face of unavoidable challenges.

    “We knew this year would be tougher than the last, when pent up levels of demand and industry-wide capacity constraints drove one of the strongest financial results in our history,” Walsh said.

    “And while we have reported a solid first half result, it is against the backdrop of significant ongoing supply chain issues, particularly the additional Pratt & Whitney engine maintenance requirements on our A321neo fleet, which will see up to five of our newest and most efficient aircraft out of service at any one time across the next 18 months at least.

    “On top of these operational challenges, we are now leaning into the reality of a worsening revenue and cost environment, which is expected to have a significant adverse impact on performance in the second half.”

    Air NZ CEO Greg Foran said doing the basics brilliantly without ever compromising on safety has positioned the airline well to compete.

    Greg Foran, Air NZ’s CEO

    “Our on-time performance and contact centre wait times have improved. Food and beverage offerings have been enhanced. Inflight entertainment options and Wi-Fi have also been improved,” Foran said. “An additional 400,000 people have joined our loyalty programme over the past year, lifting membership to 4.4 million. All these things, along with the manaaki shown by staff – taking care further than any other airline – have seen our customer satisfaction score return to pre-pandemic levels.

    “The engine maintenance requirements for both Pratt & Whitney and Rolls Royce have seen our aircraft spend more time on the ground. While this is beyond our control, we are managing these issues with changes to our schedule and additional leased aircraft.”

    2H 2024 Trading update

    As noted in the airline’s market update on 19 February 2024, a number of continuing economic and operational conditions have deteriorated and are now expected to have a significant adverse impact on performance in the second half.  These include the impact of additional competition on forward revenue performance, ongoing weakness in domestic corporate and government demand, temporary cost headwinds of $35 million in the second half to alleviate customer impacts and operational pressures, as well as ongoing cost inflation.


    In light of these conditions, the airline considers that performance for the second half of the 2024 financial year will be markedly lower than the first half.

    In this context, and assuming an average jet fuel price of USD$105/bbl for the second half, the airline currently expects earnings before taxation for the 2024 financial year to be in the range of $200 million to $240 million. This range includes $20 million of currently assumed additional COVID-related credit breakage over the second half. Future redemptions of COVID-related credits remain uncertain and subject to further actions.

    Email the Travel Weekly team at

    air new zealand

    Latest News