Air New Zealand Ltd (ANZFF) (Half Year 2026) Earnings Call Highlights: Navigating Challenges …

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Thu, February 26, 2026 at 12:00 PM GMT+9 4 min read

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**Passenger Numbers:** 8.1 million passengers carried in the half.

**Loss Before Tax:** $59 million.

**Net Loss After Tax:** $40 million.

**Compensation Received:** $55 million related to engine issues.

**Passenger Revenue Growth:** 3.6% increase.

**Premium Cabin Revenue Growth:** 10% increase.

**Ancillary Revenue Growth:** 10% increase.

**Nonfuel Cost Inflation:** $75 million or 3.5% increase.

**Transformation Program Benefits:** $45 million in the half.

**Liquidity:** $1.3 billion at the end of the half.

**Net Debt-to-EBITDA:** 2.6x.

**Fuel Hedging:** 83% hedged for the second half of the financial year.

**Aircraft CapEx:** Approximately NZD 3.4 billion through to 2031.

**Expected Capacity Growth:** 3% to 4% in the second half, conditional on engine reliability.

Warning! GuruFocus has detected 6 Warning Signs with ANZFF.

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Release Date: February 25, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Air New Zealand Ltd (ANZFF) has improved regional on-time performance significantly, increasing from 73.3% to 83.9%.

The company has a strong safety culture, a loyal customer base, and a diverse global network with a modern fleet.

Customer satisfaction remains high at 84%, reflecting investments in the 787 retrofit program and in-flight services.

The loyalty program, with over 5.2 million members, is a strategic platform for future growth and value.

Air New Zealand Ltd (ANZFF) is expecting the return of 4 grounded Airbus Neo and Boeing 787 aircraft in 2026, along with the delivery of 2 new 787 aircraft, which will increase wide-body capacity by 20% to 25% over the next two years.

Negative Points

Air New Zealand Ltd (ANZFF) reported a loss before tax of $59 million and a net loss after tax of $40 million, reflecting a challenging operating environment.

The company is operating at around 90% of pre-COVID capacity, with up to 8 aircraft grounded at times, leading to economic inefficiencies.

There is significant cost inflation, particularly in mandated domestic passenger levies, landing charges, and engineering materials, exacerbated by a weaker New Zealand dollar.

Domestic demand recovery has been slower than expected, especially in business travel, impacting mix and yield.

The Board decided not to declare an interim dividend due to the financial challenges faced.

Q & A Highlights

Q: Could you provide more details on the scope and timing of the strategy review? A: The strategy review is comprehensive, covering network shape, fleet deployment, new revenue opportunities, and cost transformation. We are engaging with about 4,000 to 5,000 staff and expect to finalize the review after Board cycles. The focus is on building a future-fit Air New Zealand and addressing inefficiencies. The recovery path will not be quick, but we are committed to executing the plan. - Nikhil Ravishankar, Chief Digital Officer

Story Continues  

Q: What assumptions have been made regarding engine compensation for the second half of the year? A: We are assuming roughly the same level of compensation as in the first half, but some of this remains subject to ongoing negotiations with the OEMs. The risk to guidance includes less compensation, no credit breakage, and other demand impacts. - Richard Thomson, Chief Financial Officer

Q: With gearing above the target range and significant CapEx ahead, what are the Board’s comfort levels and potential actions if gearing becomes uncomfortable? A: Aircraft CapEx is highest this financial year, but we have flexibility in the fleet plan and significant unencumbered aircraft for borrowing capacity. We are managing CapEx prudently and expect slight delays in some aircraft deliveries, which may help manage the profile. - Richard Thomson, Chief Financial Officer

Q: Are the previous estimates for seat capacity growth in FY27 and FY28 still accurate? A: Yes, those estimates remain fairly accurate. We expect a slight improvement in engine availability, which will help capacity growth over the next two years, supported by the phased delivery of new GE 787s. - Richard Thomson, Chief Financial Officer and Leila Peters, General Manager, Corporate Finance

Q: How challenging will it be to achieve cost reductions as part of the restructuring program? A: Cost reduction programs are inherently difficult, but our Kia Mau program is delivering to plan with $145 million in improvements. The strategy review will identify further areas for focus, including engineering and maintenance, while advocating for a fairer aviation system. - Nikhil Ravishankar, Chief Digital Officer

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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