Air New Zealand Struggles Continue

Daniel Fowkes
23 Apr 2024
· Airlines 
An Air New Zealand Boeing 777-300ER arrives into London Heathrow from Los Angeles

Air New Zealand has had a trying past year, and this is expected to continue. This forecast follows the flag carrier’s latest guidance, which paints a bleak picture.

At the beginning of the week, Air New Zealand said it was forecasting weaker profitability for the year. This marks the second time Air New Zealand has been forced to adjust expectations.

The flag carrier says that because of persistent economic and operational conditions that aren’t in its favour, it will see profitability reduced between NZ 40 and 50 million for the year.

Not for the first time, Air New Zealand also cites the continued pressures it faces with competition on its North American routes. Companies such as United Airlines have aggressively expanded into the Oceania region and given flag carriers such as Air New Zealand and Qantas a run for their money. However, other companies enhancing their network within New Zealand has meant more pressure has been felt.

Air New Zealand also says that continued local inflation and subsequent weakened demand have contributed to the problem. Specifically, the airline focuses on travel in the government and business sectors, which have seen drops.

As pressures continue to mount, Air New Zealand has been forced to increase the price of its airfares. This has been received negatively, as high levels of inflation mean people’s spending money has significantly gone down over time.

Problems With The Active Fleet

Air New Zealand has also long been battling fleet problems, with multiple engine issues causing its aircraft to be grounded. In response, the airline has been forced to cut flights and adjust its schedule.

Most notably, the airline suspended its Chicago flights through the second half of 2025. This suspension highlights the difficulties that the airline is experiencing internally. Additional pressures are felt with its A321neo jets as Pratt & Whitney GTF problems hurt the airline’s narrowbody operation.

Air New Zealand has been forced to ground some of its Airbus A321neos following the ongoing Pratt & Whitney GTF crisis that has hurt its network – Photo credit: Mitchell R Hope

Looking ahead, Air New Zealand says it’ll need to make the necessary changes to its pricing to navigate these more uncertain times. It must also find ways to manage competition, groundings, and other factors to emerge stronger in the long term.

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