Air New Zealand has reported net profit of $71 million, a 12 per cent fall on a year ago but ahead of expectations.

The company said a few minutes ago that the year to June 30 had shown a ''significantly'' stronger second half of the year.

Chairman John Palmer said the airline, majority owned by the government, was well positioned to continue the growth trajectory that it was pursuing until 2008 when the world was gripped by financial crisis.

"We have come through some tough times and the worst impacts of natural disasters like the Christchurch earthquake and tsunami in Japan are behind us, which means growth opportunities are no longer suppressed.

"We view the future with optimism and are pursuing a clear strategy to strengthen our Australasian operations, while being ahead of target in restructuring our International long haul network to improve financial performance," Palmer said in a statement to the NZX.

For the six months to December 31, Air New Zealand generated net profits of $38m, a 60 per cent drop on the same period a year earlier, struck by rising fuel costs and falling demand on its long haul services.

Outgoing chief executive Rob Fyfe said the airline had "implemented a broad suite of performance improvement initiatives that have touched every aspect of our business and we are currently ahead of the targets we set''.

In February Air NZ said it was targeting $195m in ''annual performance improvements'' by 2015. The airline said today the target had been raised to $250m.

Palmer gave a bullish outlook statement for the airline, predicting earnings could double over the next 12 months.
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The company has declared a final dividend of 3.5 cents per share, giving a total dividend for the financial year of 5.5c.
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