Air New Zealand is facing significant operational challenges as engine issues continue to ground a portion of its fleet. The airline’s Chief Executive Officer, Greg Foran, stated that up to 11 aircraft could be grounded throughout 2025 due to ongoing problems with Pratt & Whitney and Rolls-Royce engines. This situation has already led to the suspension of direct flights from Auckland to Seoul and a reduction in other services.
Foran explained during an earnings call reported by Reuters: “Our fleet situation will not improve in the near term. In fact, it’s likely to become more challenging over the remainder of this financial year and into the first half of FY2026. Having 10 or 11 aircraft grounded may not sound dramatic, but it represents roughly 20% of our fleet, and the ripple effects are substantial – I cannot overplay this enough.”
The grounding has impacted Air New Zealand’s operations significantly, with a reported net profit after tax of NZ$106 million for the six months ending December. However, capacity was reduced by 4%, leading to an 18% fall in expected profit according to Radio New Zealand.
In addition to these issues, delays in Boeing deliveries have further complicated matters for Air New Zealand. Several new Boeing 787s were expected by February 2026 but have been postponed. To address this gap, Boeing 777-300ERs have been leased temporarily.
Despite these challenges, compensation discussions with Rolls Royce and Pratt & Whitney are underway. The airline received NZ$94 million in compensation last year but continues to face financial burdens due to grounded capital worth NZ$1 billion at any time.
Passenger numbers have also declined by 3%, contributing to a decrease in revenue by 5% to NZ$2.9 billion. Weak domestic demand is cited as another factor affecting revenue.
Looking ahead, Air New Zealand plans upgrades for its Boeing 787-9s with new cabin interiors by the end of 2025 as part of a $2.06 billion brand refresh investment announced previously.
