Air New Zealand's annual profit is down by 90% due to the global economy but the airline says it is doing better than most of its rivals.
The company's net after-tax profit has fallen from $218 million to $21 million, reflecting a decline in passenger numbers and volatile fuel prices.
Normalised earnings, which measure underlying performance, shows a 19% fall after tax from $146 million to $118 million.
Air New Zealand chairman John Palmer says the airline has done better than most, having moved quickly to cut capacity as passenger numbers began to fall.
The airline carried 6% fewer passengers compared with a year earlier, but still managed to earn 6% more profit from them.
Freight, contract and other revenue were reduced at the same time as labour costs rose $48 million. Maintenance costs were also up, as were airport charges.
Mr Palmer says there are signs that the global slump in travel may be bottoming out and believes Air New Zealand is well placed to pick up more business in the markets it serves.
Mr Palmer says few other airlines are making profits and the current operating environment is likely to remain turbulent.
Predictions from the International Air Transport Association suggest global airline losses totaling $9 billion in the current calendar year, he says.
Air New Zealand is paying a final dividend of 3.5 cents per share.
Key not surprised at result
Prime Minister John Key says Air New Zealand's result is to be expected in an industry that is facing global challenges during a recession.
The Government owns just over three-quarters of Air New Zealand shares, after the airline was bailed out in 2001 on the verge of financial collapse.
Mr Key says swine flu and the recession are making things tough for airlines, but the Government is committed for the long haul.