Air New Zealand anticipates a pre-tax loss of $30-$55 million for the first half, due to a weak economy and multiple grounded aircraft.
Air NZ had previously expected a 2% to 3% increase in revenue from bookings within the domestic market and those heading to the US.
“This has not materialised to date and is not yet evident in the current forward booking profile, the impact of which is approximately $50m for the half,” it said.
“The local economy remains subdued, with ongoing softness across business, government and leisure segments.”
9 to 11 aircraft have also periodically stayed grounded since the start of the 2026 financial year.
In August, Air NZ indicated that its earnings before tax for the first half of the 2026 financial year were projected to be comparable to or lower than the $34 million reported in the second half of the 2025 financial year.
Engine lease costs for the first half are now anticipated to be about $20 million higher, reflecting the inclusion of end-of-lease obligations on two short-term aircraft leases that were not previously accounted for in the forecast.
The company said these costs were non-cash during the period and are not included in existing compensation agreements.
Air NZ also stated that its financial commitments under the mandatory Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) have risen by approximately $10 million since the August forecast.
This has led to higher fuel expenses.
The company said it “continues to prioritise medium- to long-term growth and is carrying the cost of additional fleet, a full workforce, and the infrastructure necessary to support recovery as aircraft availability improves.”
The airline is implementing additional cost-saving and efficiency measures to ease these pressures and preserve the strength of its balance sheet. It also continues to actively negotiate with engine manufacturers to determine suitable compensation levels for unserviceable engines and establish precise timelines for engine returns.