Air New Zealand has announced its financial results for the fiscal year ending June 30, 2024 (FY24), revealing a mixed bag of successes and setbacks. While the airline achieved a 7% increase in operating revenue compared to the previous year, this growth was overshadowed by a significant decline in profitability.
The airline’s underlying profit plummeted by 61%, dropping from NZ$574 million to NZ$222 million (approximately $207 million to $140 million), while net profit fell by 65%, decreasing from NZ$412 million to NZ$146 million (around $260 million to $92 million). Operating cash flow also experienced a significant decline, dropping by 43%.
These disappointing results stem from persistent challenges related to the Rolls-Royce engines powering the airline’s 14 Boeing 787-9 Dreamliners. Additionally, Air New Zealand is grappling with issues concerning the Pratt & Whitney GTF engines on its Airbus A320neo aircraft. These engine problems have led to frequent grounding of aircraft, with up to three Dreamliners and six A320neos out of service at various times, severely impacting capacity and disrupting travel plans for numerous passengers.
In response to these ongoing challenges, Air New Zealand is implementing a plan to rejuvenate its fleet. The airline has placed orders for eight new 787 aircraft, powered by GE engines, with the first expected to arrive in late 2025. Further deliveries are scheduled throughout FY29, with two planes arriving in FY26, three in FY27, one in FY28, and two in FY29.
The airline is also set to receive two ATR 72-600 turboprops in FY25 and two A320neo Family jets in FY27. Additionally, one 777-300ER and two leased A320neo Family aircraft are expected to join the fleet in FY25.
While these fleet modernization efforts aim to improve operations and enhance performance, the airline’s performance metrics have also shown a decline in FY24. Air New Zealand carried 16.5 million passengers, a 4% increase from the previous year’s 15.8 million. However, despite increasing available seat kilometers (ASKs) by 23%, demand, measured by revenue passenger kilometers (RPKs), only grew by 18%. This imbalance led to a 3.2 percentage point drop in the passenger load factor, which now stands at 81.5%.
Air New Zealand faces a challenging landscape in the year ahead, navigating turbulent times and reflecting broader uncertainties within the global aviation industry.
