Air New Zealand is to pay some staff a bonus of $1800 each and invest in new digital technology and better lounges after announcing a near-record profit.
Among its announcements today, Air New Zealand said it would set aside around $150 million over the next few years to improve aircraft cabins, digital products and lounges.
The airline has reported a net profit for the June year of $390 million compared with the previous year's $382m.
"This is an impressive financial result, driven by strong revenue growth across the airline's key markets, as well as continued focus on sustainable cost improvement, despite significantly higher fuel prices," chairman Tony Carter said.
The airline carried nearly 17 million passengers, up 6 percent on the previous year, with the strongest growth on domestic and trans-Tasman routes, which offset softer conditions on long-haul flights.
Group revenue was up 7 percent at $5.6 billion. The rise in world oil prices lifted the fuel bill by $135m, which would have been higher but for hedging contracts, which offset some of the rises.
Chief executive Christopher Luxon said the airline had been disrupted by having to ground some of its long-distance Boeing 787 Dreamliner fleet to repair their engines. It is expected the engines problems will cost the airline $30-40m.
It is going to lease three planes and rejig its schedules to improve reliability on several routes.
"Looking out over the next two years, the airline is expecting to grow by one million customers a year, reaching 19 million customers by the end of 2020," he said.
The airline forecast underlying earnings of between $425m to $525m for the coming year, compared with the past year's $540m.
The airline increased the dividend by a cent to 22 cents a share, and also gave staff not already on incentive schemes a bonus of $1800.