Air NZ profit more than doubles to a record $338m in six months

Air New Zealand's profit and cashflow have both jumped.

Air New Zealand has seen profit more than double thanks to a rise in the number of passengers, lower jet fuel prices and changes to its fleet.

The airline posted a record net profit of $338 million for the first six months of the year, up 154 per cent. Operating cash flow was up 43 per cent at $541m.

"We are delighted to start off 2016 with such a stellar performance," chairman Tony Carter said.

"Air New Zealand's profitability, healthy free cash flow and solid balance sheet reflect the successful execution of the strategic plan by CEO Christopher Luxon and the executive team, which is focused on sustainable and profitable growth."

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The airline expected to post a full year profit before tax of at least $800m.

Last year, Air NZ's pre-tax earnings were $474m.

Air NZ's result comes days after a bullish Qantas reported a record six-month profit and plans to expand.

Luxon said the airline aimed to provide more routes and competitive prices in New Zealand and the wider region, "combined with modern aircraft offering better operating economics",

Domestic demand was up 10 per cent, and the Tasman and Pacific Island markets continued to perform strongly for the airline, Luxon said.

"New Zealand continues to be not only a destination that is in big demand for Australians but it is also a gateway to North America, South America and the Pacific Islands for travellers from Australia.

"This traffic is adding to the strength of Air New Zealand's services to these markets.

"In recognition of the opportunity, we will continue to build our presence in Australia," he said.

Air NZ's 25.9 per cent stake in Virgin Australia and its share of Christchurch Engine Centre's earnings contributed $15m and $10m respectively for the six months.

The airline will pay shareholders an interim dividend of 10c per share on March 18.

 - Stuff