(Reuters) -Air New Zealand reported a 61% slump in 2024 profit on Thursday and warned of a potential impact from sticky inflation, intense competition and engine-related maintenance issues in the first half of fiscal 2025.
The country’s flagship carrier is grappling with a hit to demand from pricing competition from its U.S. counterparts and high inflation, while global engine maintenance requirements from Pratt & Whitney has affected aircraft availability.
“Air New Zealand is expecting a challenging year ahead,” CEO Greg Foran said.
The unfavourable trading conditions are expected to “remain similar through the first half of the 2025 financial year”, the carrier said.
Pratt & Whitney last year removed more than 1,000 engines from Airbus planes, which has led to the grounding of Air New Zealand’s planes intermittently.
These issues have had a significant impact on the airline’s operational and financial performance for the 2024 financial year, the carrier said.
Its earnings before tax fell to NZ$222 million ($138.55 million) from NZ$574 million a year ago. It, however, beat Visible Alpha consensus estimate of NZ$176.7 million.
The carrier declared a final dividend of 1.5 New Zealand cents per share for fiscal 2024.
($1 = 1.6023 New Zealand dollars)
(Reporting by Shivangi Lahiri in Bengaluru; Editing by Mohammed Safi Shamsi)
