Air New Zealand lowers FY25 earnings forecast

<a href='https://grafa.com/company/air-new-zealand-ltd-363'>Air <a href='https://grafa.com/economy/new-zealand-nz'>New Zealand</a></a> <a href='https://grafa.com/asset/air-new-zealand-ltd-363-aiz.asx'>(ASX:AIZ)</a> has provided its earnings guidance for FY25, anticipating a substantial drop in compensation from engine manufacturers, despite an increase in grounded aircraft. The airline, which had previously withheld full-year guidance due to uncertainty surrounding the number of grounded aircraft and related compensation, now projects earnings before taxation to range between NZ$150 million ($139.5 million) and NZ$190 million ($176.7 million). The airline's groundings are linked to global maintenance requirements for Pratt & Whitney and Rolls-Royce engines powering its Airbus neo and Boeing 787 Dreamliner fleets. While <a href='https://grafa.com/company/air-new-zealand-ltd-363'>Air <a href='https://grafa.com/economy/new-zealand-nz'>New Zealand</a></a> has secured additional leased engines to stabilise the number of grounded narrow-body jets, unpredictable engine maintenance timeframes remain a challenge. In the first half of the year, compensation was based on the flexibility to classify certain engines as unserviceable, even when retained "on-wing" for tasks like repositioning stored aircraft. This flexibility has now ended, meaning only engines "off-wing" for maintenance will trigger compensation. As a result, compensation for the second half of FY25 is expected to be between NZ$35 million ($32.6 million) and NZ$40 million ($37.2 million). Despite benefiting from lower fuel prices, <a href='https://grafa.com/company/air-new-zealand-ltd-363'>Air <a href='https://grafa.com/economy/new-zealand-nz'>New Zealand</a></a> faces complexities as it adjusts operations to accommodate fewer aircraft in the short term. Ongoing uncertainty, including recent US tariff announcements, further complicates the demand environment.