Air New Zealand (AIR) H2 2026 earnings summary

Executive summary

• FY 2026 saw a loss before tax of $336 million and a net loss after tax of $242 million, compared to a profit in FY 2025, mainly due to high fuel prices, engine availability issues, and increased maintenance and aviation system costs.

• Operational reliability and punctuality improved, with on-time performance reaching 84% in the second half and customer satisfaction rising to 84.5%.

• Strategic reset focused on customer first, targeted growth, and building a resilient, future-fit business, with transformation initiatives delivering $94 million in benefits and $135 million in annualized savings identified for 2027.

• Fleet reliability improved as grounded aircraft returned to service, reducing operational constraints and costs.

Financial highlights

• Operating revenue rose 3.9% to $7.0 billion; passenger revenue increased 4.8% to $6.1 billion; cargo revenue was flat or down 0.6% to $484 million.

• RASK increased 3.4% year-over-year, but CASK rose 10.4%, mainly due to a 31%–58% increase in fuel costs in the second half.

• EBITDA dropped to $511 million from $939 million in FY 2025; net debt to EBITDA increased to 3.8x.

• Operating cash flow was $819 million, down from $940 million in 2025; liquidity at year-end was $1.6 billion.

• No final dividend declared for FY 2026.

Outlook and guidance

• FY 2027 is expected to be a transition and recovery year, with capacity projected to grow 2%-4% as fleet returns to service and strong inbound demand.

• No earnings guidance for FY 2027 due to ongoing fuel price volatility and geopolitical uncertainty.

• Maintenance costs expected to decrease by $50–$100 million in FY 2027; engine disruption costs to reduce but still estimated at $70–$90 million.

• Aviation system costs and airport charges will continue to rise above inflation, with some ports up 10%+.

• Fuel remains the largest area of uncertainty; 60% of FY 2027 fuel volume is hedged.