“We’ve certainly seen demand holding steady for international travel, which is a good thing, but just overall, growth is more subdued than expected, and there’s a challenging kind of local environment which I suspect is playing through at many of the results this week,” Hurihanganui told the Herald.
“And then in the international space, it’s a very competitive environment.
“Everybody coming out of Covid is competing for that recovery and for the tourists.
“And we’ve got more work to do in that space.”
Hurihanganui said the sector had some different variables, but other destinations and countries were recovering.
She said it was important AIA and other operators, and the Government, come together to actively close the capacity gap to stimulate tourism.
“And it’s been great to see the Government talking about economic growth, investing and the campaign in Australia.
“We need to take steps because we’ve lost ground in the last 12 months compared to other destinations,” she said.
Hurihanganui said capacity in the international market remained flat during the half-year period at 89% compared to 2019 levels, impacted by competition in the market and other factors such as Air New Zealand’s fleet issues.
“We know the long-term fundamentals of New Zealand as a top tourist destination are strong, but competition is tough for available international airline capacity.”
In late trading, shares in AIA were down 31.5c or 3.7% at $8.12.
Craigs Investment Partners said the result was below expectations.
“While the reported number was about $350m, this includes interest benefits,” Craigs said.
“The full-year 2025 guidance has not really changed, with net profit of $290-320m expected, but the quality of it looks weak.”
Full-year passenger forecasts were unchanged for international, but domestic was lowered 2% to 8.4m (still 10% below pre-Covid levels), Craigs said.
On the regulatory front, the Commerce Commission’s report on airport pricing is due in the first quarter of this year.
Salt Funds managing director Matt Goodson said there were doubts about the full-year outlook.
“If you back out the interest income benefit from the equity raising, it shows that earnings will only grow slightly on the previous year, which raises significant risk to 2026-year forecasts when aeronautical prices could adjust lower for several years [following] the Commerce Commission review,” he said.
“This is somewhat below current analyst forecasts, which are circa 10% higher than outcomes that now look likely,” he said.
In its outlook for the 2025 financial year, Hurihanganui said aeronautical and commercial activity is expected to be resilient, but uncertainty remained around seat capacity and New Zealand’s subdued local economy.
AIA reconfirmed its guidance on capital expenditure of $1 billion and $1.3b for the year.
The company set its dividend at 6.25cps.
Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.
