Rewrites throughout, adds CEO comments in parapgraph 3
Feb 20 (Reuters) - Air New Zealand AIR.NZ warned on Thursday that up to 11 aircraft may remain grounded at times in the second half of fiscal 2025, which will affect its full-year earnings, after it reported an 18% drop in its first-half profit.
New Zealand's flagship carrier said its jets are estimated to remain out of service at times during the second half of 2025 due to global engine maintenance issues affecting its Airbus neo and Boeing 787 Dreamliner fleets, which are powered by Pratt & Whitney and Rolls-Royce engines.
Chief Executive Officer Greg Foran acknowledged that "2025 is set to be particularly challenging financially, as the airline navigates its first full 12-month period with up to 11 jets out of service at any time", the company said.
The carrier's net profit after tax came in at NZ$106 million ($60.43 million) for the six months ended December 31, a 17.8% drop from last year.
That, nonetheless, beat a Visible Alpha consensus of NZ$101.6 million.
"This is a strong result when you consider the headwinds we have been navigating for almost a year now", Chair Therese Walsh said in a statement.
Reflecting confidence in its balance sheet, the carrier announced a share buyback of NZ$100 million and declared an interim ordinary dividend of 1.25 New Zealand cents per share.
This is not the first time that engine issues have substantially affected the carrier's operations, with maintenance issues having impacted the company's bottom line in fiscal 2024.
Late last year, an Air New Zealand flight had to divert from its path to land in Auckland after facing engine problems.
Earlier this month, the carrier had to trim its offerings, announcing that its flights to South Korea's capital, Seoul, will be stopped by the end of March, flagging an engine shortage.
($1 = 1.7541 New Zealand dollars)
(Reporting by Roshan Thomas and Nichiket Sunil in Bengaluru; Editing by Alan Barona)
((Nichiket.Sunil@thomsonreuters.com; Roshan.Thomas@thomsonreuters.com;))