Air New Zealand sees lower earnings for 2025, cites engine woes

(Reuters) - Air New Zealand said on Wednesday it expects lower earnings in the 2025 financial year, citing uncertainty regarding its global engine maintenance delays and related compensation levels.

The carrier expects earnings before taxation in the range of NZ$150 million ($88.50 million) to NZ$190 million in 2025, compared with NZ$222 million it had reported in 2024.

The country's flagship carrier is still reeling from engine-related maintenance issues, started in 2023 when Pratt & Whitney removed more than 1,000 engines from Airbus planes, which led to the grounding of Air New Zealand planes intermittently.

Earlier this year, the airline had flagged that up to 11 of its aircraft could remain grounded at times in the second half of fiscal 2025, which would further bite into the firm's full-year earnings.

This is not the first time that engine issues have substantially affected the carrier's operations. They had impacted the company's bottom line in fiscal 2024.

However, Air New Zealand failed to provide a proper timeframe as to when this persistent issue will be resolved, saying "these discussions continue to be complicated."

"The airline is engaged in ongoing negotiations with engine manufacturers regarding appropriate levels of compensation for unserviceable engines, and accurate timeframes for engine returns," the carrier said.

The company said it expects compensation recognised in the second half of the year to be around NZ$35 million to NZ$40 million.

($1 = 1.6949 New Zealand dollars)

(Reporting by Rajasik Mukherjee; Editing by Maju Samuel)