• 1H 2026 Loss before taxation of $59 million
• Strategic review underway to reset the business amid continuing cost escalation
• Expect 2H earnings to be broadly in line with, or modestly below, the 1H

Air New Zealand today announced a loss before taxation of $59 million for the first half of the 2026 financial year, compared with earnings before taxation of $144 million in the prior corresponding period. The net loss after taxation was $40 million. This result reflects the combined impact of ongoing fleet constraints, a slower recovery in domestic demand and rising costs, including persistently high aviation system inflation. Cost pressures have been further exacerbated by a weaker New Zealand dollar. The airline received $55 million in compensation from engine manufacturers for the first half, but estimates an additional $90 million of earnings could have been included within the result had the fleet operated as intended. The airline is in ongoing negotiations with engine manufacturers to improve certainty around engine return schedules and appropriate compensation. The Board has asked the new CEO to undertake a full strategy review to return the airline to sustained profitability through enhanced operational performance, growth and further cost transformation initiatives. While capacity is expected to increase modestly in the second half, the airline cautions that improvements in aircraft availability are unlikely to translate immediately into earnings uplift due to uncertainty in the timing of aircraft and engine returns. Based on current trading conditions and assuming an average jet fuel price of US$85 per barrel for the second half, Air New Zealand expects second-half earnings to be broadly in line with, or modestly below, the first half.

Based on current trading conditions and assuming an average jet fuel price of US$85 per barrel for the second half, Air New Zealand expects second-half earnings to be broadly in line with, or modestly below, the first half.

The airline will take delivery of the first two of ten new GE-powered 787s at the end of the financial year supporting widebody capacity growth of approximately 20% to 25% over the next two years. The airline continues to advocate for fit-for-purpose aviation sector settings that underpin connectivity and affordability.