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Air New Zealand earned more revenue from its passengers in December and analysts are forecasting a strong rise in first-half profit.
It said said yesterday that yields - the revenue it earns from each individual passenger - were up 10.7 per cent across the airline from the same time last year. In the year to date yields are up 12.7 per cent.
The group carried 1.2 million passengers for the month, up 6.4 per cent from December 2005.
The announcement pushed shares up 3c to a three-year high of $2.19.
The airline will post its interim result for the six months to December on February 27.
First New Zealand Capital predicted this would rise 24 per cent to $68 million, driven by an increase in passenger yields despite a significantly higher fuel bill.
Forsyth Barr analyst Rob Mercer also expected a profit boost driven by strong earnings, yields and load factor for the six months to December.
But passenger yields over the next six months would drop because of Air New Zealand's cut in domestic fares, said Mercer.
Air New Zealand has slashed the price of its lead-in domestic fares by up to 26 per cent from February 24 to encourage more travellers.
Mercer said airlines were in a "sweet spot" globally because there had been a cut in capacity of wide-bodied aircraft and improved yields.
Air New Zealand had just completed the introduction of its new fleet so its "timing has been perfect".
Air New Zealand's short-haul load factor was up 2.9 per cent to 75 per cent, and the domestic passenger load factor was up 1.9 per cent to 76.2 per cent from December 2005. Group capacity increased 5.5 per cent to 3.5 billion available seat kilometres.
