Air New Zealand is expected to be spared profit downgrades, analysts say, unlike Qantas, which was forced this week to forecast a dramatic downgrade of up to 80 per cent on its initial projection because of intense competition.

Qantas is facing new rivals in Australia and especially on the route to the United States, but passenger capacity on Air New Zealand routes is similar to last year's, so its profits from each passenger the yield are holding up.

Goldman SachsJBWere analyst Marcus Curley said the Qantas profit downgrade, redundancy plans for 1750 staff on the heels of 1590 job cuts in the past year, parking or selling planes and deferring plane orders, was a stark reminder that underlying demand for international air travel remained weak.

"At this stage we do not anticipate a similar type of profit warning from Air NZ, given more intense competition dynamics in Australia."...