Stock Analyst Note
Air New Zealand Earnings: Maintenance Woes to Crimp Capacity Growth
Profitability at Air New Zealand has moderated significantly. Fiscal 2024 underlying profit before tax of NZD 222 million was within guidance and about 2% below our forecast, but down 61% from near-record profits in fiscal 2023. Conditions have normalized. Pent-up demand has exhausted, previously constrained industry capacity has eased, and price competition has returned. The second half deteriorated further from first-half pretax profit of NZD 185 million amid cost inflation, engine maintenance issues, a soft economic backdrop in New Zealand, and increased competition on North American routes.