Friday, August 30, 2024 Air New Zealand has reported its financial results for the fiscal year ending June 30, 2024 (FY24), revealing a complex landscape of challenges and setbacks. While the airline managed a 7% increase in operating revenue compared to the previous year, this positive growth was eclipsed by sharp declines in profitability. The airline’s underlying profit plummeted by 61%, net profit dropped by 65%, and operating cash flow fell by 43%.
Specifically, the underlying profit dropped from NZ$574 million to NZ$222 million (approximately $207 million to $140 million), and net profit fell from NZ$412 million to NZ$146 million (around $260 million to $92 million). The airline continues to grapple with persistent issues related to the Rolls-Royce engines that power its 14 Boeing 787-9 Dreamliners. Additionally, Air New Zealand is facing significant challenges with the Pratt & Whitney GTF engines on its Airbus A320neo aircraft.
These engine problems have led to frequent groundings, with up to three Dreamliners and six A320neos out of service at various times, severely impacting the airline’s capacity and disrupting travel plans for many passengers. In response to these ongoing challenges, Air New Zealand is looking ahead with a plan to rejuvenate its fleet. The airline has placed orders for eight new 787 aircraft, with the first of these GE-powered planes expected to arrive in late 2025.
Additional deliveries are scheduled through 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.
Despite these efforts to modernize its fleet and improve operations, the airline’s performance metrics have also seen a decline. In FY24, Air New Zealand carried 16.5 million passengers, a 4% increase from the 15.
8 million passengers it transported in the previous year. However, while the airline increased its 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%. As Air New Zealand navigates these turbulent times, the airline is bracing for further challenges in the year ahead, reflecting broader uncertainties within the global aviation industry.
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