Analysts have adjusted Air New Zealand’s fair value estimate downward from $0.67 to $0.66. This change is attributed to slightly lower projected revenue growth and profit margins, as well as a modest reduction in discount rate assumptions.

Analyst Commentary

Recent analyst commentary on Air New Zealand highlights both opportunities and risks for the airline’s outlook, reflecting adjustments in valuation estimates and underlying assumptions about future performance.

• Bullish analysts continue to recognize resilience in Air New Zealand’s operating model, despite a modest reduction in revenue growth projections.
• The company’s efforts to control costs and optimize route networks are seen as supportive for maintaining profitability in a competitive environment.
• Improved sector demand, particularly for both government and commercial travel, is anticipated to help stabilize key business segments.
• Some valuation adjustments have been relatively minor. This suggests underlying analyst confidence in Air New Zealand's longer-term recovery potential.

• Bearish analysts are cautious about ongoing pressure on profit margins, citing sector-wide headwinds and the persistence of high operating costs.
• Reduced discount rate assumptions signal concerns over macroeconomic factors that could dampen growth prospects and airline demand.
• Air New Zealand’s revenue projections have been trimmed modestly. This reflects uncertainty around the pace of post-pandemic travel recovery.
• There is a focus on the airline’s ability to deliver consistent profitability as the industry faces fluctuating demand and structural changes in global travel patterns.

What's in the News

• Air New Zealand issued first-half 2026 guidance, expecting a loss before taxation between $30 million and $55 million, assuming average jet fuel at USD 85 per barrel. The company cautions that first-half results may not reflect full-year trends because of planned capacity growth in the second half (Corporate Guidance).
• Operating results for September 2025 show monthly passengers carried increased to 1,575,000 from 1,507,000 a year ago, with revenue passenger kilometres also up year over year. Year to date figures reflect similar growth in passengers and load factors compared to the previous year (Operating Results).
• BETA Technologies’ ALIA electric aircraft completed its first take-off in New Zealand as part of Air New Zealand’s Next Generation Aircraft programme. This marks a milestone in the airline’s efforts to explore battery-electric aviation technology (Client Announcements).
• The Board of Directors declared a final unimputed ordinary dividend of 1.25 cents per share for the 2025 financial year, payable on 25 September 2025, with a total dividend payout of $41 million (Dividend Decreases).
• Air New Zealand completed a share buyback of 61,470,872 shares, representing 1.8% of the company, for NZD 38 million between February and June 2025 (Buyback Tranche Update).

Valuation Changes

• Fair Value Estimate has decreased slightly from NZ$0.67 to NZ$0.66, reflecting minor adjustments in model assumptions.
• Discount Rate has fallen from 11.31% to 10.94%. This suggests a reduced perceived risk or cost of capital for Air New Zealand.
• Revenue Growth projections have edged down from 4.57% to 4.53% per year. This indicates a small reduction in expected top-line expansion.
• Net Profit Margin forecast has marginally decreased from 2.84% to 2.79%. This highlights slightly lower anticipated profitability.
• Future Price-to-Earnings (P/E) ratio has declined from 12.55x to 12.38x, reflecting a modest adjustment in valuation multiples based on earnings expectations.