Air New Zealand (NZ, Auckland International) is facing fleet challenges on several fronts across its narrowbody and widebody operations, it said in an update during a half-yearly interim results announcement in Auckland on February 22, 2024.
"We have had to adjust our expectations for the delivery of the first two new B787s yet again," said Chief Financial Officer Richard Thomson. Air New Zealand has two B787-9s and six B787-10s on order. "Initially, we expected these planes to deliver in late calendar 2023, then calendar 2024, but with the well-known production issues at Boeing, our latest best estimate is that we won't receive these aircraft until halfway through calendar 2025. Our current capex assumed delivery of four B787s in the 2026 financial year. However, that may change. This delay is disappointing."
Thomson added that Air New Zealand intended to have the first of its existing fourteen B787-9s start going in for their cabin refurbishments midway through this year.
"We have re-entered into a short-term wet lease with Wamos Air (EB, Madrid Barajas), as well as procuring two additional dry-leased B777-300ERs," CEO Greg Foran said. "One is already flying for us, and the other will start in June. The two B777s have a lease period of three to four years with some optionality to extend if required. We are also finalising the lease for a third B777-300ER aircraft, which will arrive later in the year and have a lease term of four years."
Foran also spoke about the impact of Pratt & Whitney engine issues on the narrowbody fleet. Air New Zealand has six A320-200Ns and eleven A321-200NX in its fleet, with another five of the latter on order. Four are currently "mothballed" at Christchurch. "The additional Pratt & Whitney maintenance requirements will see up to five of our newest and most efficient A321-200NX out of service at any time across the next 18 months," said Foran. "The operational impact should not be understated, and this remains the single most impactful challenge this year. The ripple-on effects would have been immense if we had not acted quickly to secure various short-term aircraft leases."
"In April, we'll have an additional A321-200NX in our fleet, although we are likely to initially use the engines on that aircraft to keep our other narrowbodies flying. We'll be funding this aircraft with cash as we did with an earlier aircraft acquired in October 2023. Despite the additional maintenance requirement, these NEOs are important given their fuel efficiency and bigger gauge."
Separately, Air New Zealand confirmed earnings before tax of NZD185 million (USD114.12 million) for the six months to December 31, 2023, and after-tax profits of NZD129 million (USD79.6 million) - in line with previously provided guidance and reflecting an expected reduction in earnings compared to the prior period where pent up demand and capacity constraints drove a very solid performance.
Foran added that the airline's expected financial performance in the six months to June 30, 2024, will be "markedly lower" than in the six months to December 31, 2023.
