(Reuters) -Air New Zealand ( ANZFF ) on Wednesday forecast a loss before tax for the first half of fiscal 2026, as absence of an expected pickup in revenue from domestic and U.S.-bound bookings added to woes around higher engine lease costs.

The flag carrier is anticipating to report a loss before taxation for the six months in the range of NZ$30 million ($17.20 million) to NZ$55 million.

The company had earlier said earnings during the half would be similar or less than the NZ$34 million reported in the last six months of fiscal 2025.

The airline said engine lease costs will be about NZ$20 million higher in the first half, reflecting end-of-lease expenses on two short-term aircraft.

Air New Zealand ( ANZFF ) said it no longer expects the 2%-3% revenue lift it had anticipated from domestic and U.S.-bound bookings, with current forward sales showing no such momentum.

The shortfall is expected to weigh on first-half fiscal 2026 earnings by about NZ$50 million.

Additionally, the airline flagged increased fuel cost, citing higher payments required under the International Carbon Offsetting Scheme For Aviation (CORSIA) of NZ$10 million.

($1 = 1.7443 New Zealand dollars)