Air New Zealand first-half profit drops 38% hurt by costs, engine troubles

FILE PHOTO: An Air New Zealand Boeing 777-300ER plane taxis after landing at Kingsford Smith International Airport in Sydney, Australia, February 22, 2018. REUTERS/Daniel Munoz/File Photo

(Reuters) – Air New Zealand reported a 38% drop in its half-yearly profit on Thursday, hurt by inflationary pressures and ongoing supply-chain issues, primarily the Pratt & Whitney engine maintenance requirements for the company’s A321neo fleet.

The airline reported earnings before taxes of NZ$185 million ($114.18 million) for the six months ended Dec. 31, lower than the NZ$299 million reported a year earlier.

It declared an unimputed ordinary interim dividend of 2.0 New Zealand cents per share.

The carrier reiterated its fiscal year 2024 earnings before taxation to be in the range of NZ$200 million to NZ$240 million, lower than the NZ$574 million it clocked in fiscal year 2023.

Air New Zealand, which is majority government-owned, is facing “tougher forward trading conditions” as the rapid recovery in travel demand seen last year softens, with performance further hurt by worsening economic and operational conditions.

($1 = 1.6202 New Zealand dollars)

(Reporting by Adwitiya Srivastava and Rajasik Mukherjee in Bengaluru; Editing by Pooja Desai)