Investing.com-- Air New Zealand Ltd (NZ:AIR) said on Tuesday it expects lower earnings for the fiscal year 2025 due to prolonged engine maintenance issues and reduced compensation from manufacturers.
The airline forecasts full-year earnings before taxation to fall between NZ$150 million ($89 million) and NZ$190 million, down from NZ$222 million it reported last year.
The downgrade follows a sharp reduction in expected compensation from engine suppliers Pratt & Whitney and Rolls-Royce (OTC:RYCEY), with second-half payments projected at NZ$35 million to NZ$40 million—less than half the NZ$94 million booked in the first half, the company said.
Shares of the company were largely unchanged.
A total of 11 aircraft remain grounded due to global maintenance backlogs, despite efforts to secure leased and spare engines to stabilize operations, New Zealand’s flagship carrier said.
The airline further noted that only engines formally removed for maintenance qualify for compensation, further limiting recovery in the second half.
While lower fuel prices have provided some relief, Air New Zealand continues to face operational complexity from reduced fleet availability.
The company also flagged potential impacts from recent U.S. tariff announcements, though it said no significant changes in demand have been observed yet.