[Source: Reuters]

Air New Zealand (AIR.NZ), opens new tab reported a 61% slump in 2024 profit and warned of a potential impact from sticky inflation, intense competition and engine-related maintenance issues in the first half of fiscal 2025.

The country’s flagship carrier is grappling with a hit to demand from pricing competition from its U.S. counterparts and high inflation, while global engine maintenance requirements from Pratt & Whitney has affected aircraft availability.

“Air New Zealand is expecting a challenging year ahead,” CEO Greg Foran said.

The unfavourable trading conditions are expected to “remain similar through the first half of the 2025 financial year”, the carrier said.

Pratt & Whitney last year removed more than 1,000 engines from Airbus planes, which has led to the grounding of Air New Zealand’s planes intermittently.

These issues have had a significant impact on the airline’s operational and financial performance for the 2024 financial year, the carrier said.

Its earnings before tax fell to NZ$222 million ($138.55 million) from NZ$574 million a year ago. It, however, beat Visible Alpha consensus estimate of NZ$176.7 million.

The carrier declared a final dividend of 1.5 New Zealand cents per share for fiscal 2024.