Air New Zealand Aircraft Remain Grounded

Air New Zealand has provided an update on its full-year earnings guidance, and as such, discussed aircraft groundings.

Since the last commentary, the airline has been able to secure additional leased engines and one further owned spare engine to try and stabilise the ongoing problems.

However, Air New Zealand states that it expects the number of aircraft on the ground to remain high, with 11 jets currently grounded. The airline is negotiating with engine makers to find ways to mitigate concerns and challenges.

The negotiations also focus on the importance of securing compensation for the unservicable engines and the inaccurate timeframes that are being provided for solutions to be found.

While engine woes and engine complexities remain challenging at the best of times, a great deal of frustration for airlines centres around the inability to understand when these problems will cease.

Time and time again, airlines such as Air New Zealand have believed a corner had been turned and improvement was being made on the global supply chains, only for the work to be undone seemingly and two steps taken back.

Air New Zealand has also made it clear that the compensation received may not directly reflect the total number of aircraft on the ground, partly due to the definition of “off-wing engines.”

The flag-carrier says that in the past, the framework of compensation has centred around the flexibility of certain engine states that were not usable or in commercial service, being treated as unservicable and thus resulting in compensation.

However, this component was introduced despite Air New Zealand retaining the engines to facilitate the repositioning of stored aircraft; however, this flexibility has now ended, according to the airline.

It makes decisions more difficult and results in lower compensation output for the second half, something that the airline needs to keep in mind.

What’s Happening At Air New Zealand?

Air New Zealand has had a tough decade, with several instances where its aircraft were grounded. Now, in 2025, that continues to be an ongoing problem.

Those ongoing problems stem from an engine supply chain crisis, which has resulted in a lack of available spare parts and maintenance windows being substantially extended.

As a result, Air New Zealand has been forced to keep aircraft across its single-aisle and widebody portfolio of jets grounded, thus affecting its ability to continue operating a stable network.

Whether it ranges from short-haul domestic flying to long-haul international services, the airline network has been fractured, with capacity cuts occurring as a result.

A couple of international routes have gone as far as being suspended as a result of the challenges in Air New Zealand to maintain the service.

Ultimately, stability is required across the business; however, that is hard to achieve when the fate of the company’s stability is in the hands of the engine manufacturers, who are encountering persistent issues.