Air New Zealand expects its first-half pre-tax profit to be in a range of $120 million to $160m, down from $185m in the previous comparable half year, driven in part by aircraft availability.

These and other factors have impacted performance for the 2025 financial year to date, although the airline had taken steps to mitigate these challenges, it said in an earnings update today.

“In parallel, the airline continues to drive innovations and customer initiatives including updating its Seats-to-Suit offering and deploying live chat capability to reduce customer wait times and cost to serve.”

It said aircraft availability issues resulting from global engine maintenance delays have meant up to six Airbus neo aircraft and up to four Boeing 787 aircraft - 16% of the entire jet fleet - had been out of service across the first half of this financial year.

Based on current assumptions and recent discussions with engine manufacturers, the airline did not expect these availability issues to ease until early 2026.

Air New Zealand said it continued to explore all options to improve capacity, including further aircraft leases.

It said early signs of recovery in corporate travel were recently observed but government travel demand was still subdued.

Targeted reductions in competitive capacity on the North American market over the peak northern winter season have also been detected.

“In the context of the above factors, and noting several one-off items in the first half, the airline currently expects earnings before taxation for the first half of the 2025 financial year to be in the range of $120m to $160m,” it said.

This included about $10m of unused travel credit breakage, $30m of compensation from engine manufacturers relating to earlier periods (as part of a broader compensation package) and a gain of about $20m on the sale and leaseback of four A320 aircraft.

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The guidance range also assumed an average jet fuel price of US$91 per barrel ($155/barrel) for the first half.

“Given the ongoing uncertainties in both the trading and operating environment, the airline cautions against extrapolating first half guidance for the 2025 financial year to the full year,” Air New Zealand said.

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.