The takeover of Qantas highlights the strong position Air New Zealand is now in, says Forsyth Barr aviation analyst Rob Mercer.

Mercer yesterday published a research report upgrading his recommendation on the stock to "buy" and lifting his valuation of Air New Zealand to $2.20 a share from $1.52.

The shares closed at $1.76 last night, having risen nearly 20 per cent in the past three weeks....