Air New Zealand has announced earnings before taxation of $457 million for the first six months of the 2016 financial year, an increase of 132 per cent on the prior period.

Net profit after taxation was $338 million, an increase of 154 per cent.

The interim result was driven by exceptionally strong passenger revenue growth, underpinned by over 16 per cent capacity growth across the network. 

On the cost side, the company continued to benefit from substantially lower jet fuel prices, as well as leveraging strong economies of scale and efficiencies from its fleet simplification program. 

Operating cash flow of $541 million was up 43 per cent on the prior period.

As a result of the strong financial performance, the board of directors has declared a fully imputed interim dividend of ten cents per share, an increase of 54 per cent on the prior period.

“We are delighted to start off 2016 with such a stellar performance,” said chairman Tony Carter.

In addition to the strength of the company’s passenger services, momentum in the cargo business continued in the first six months of the year, with revenue increasing 21 per cent.

Solid execution in this area has led to increased market share on the long-haul network from New Zealand, driven primarily by strong demand from North America, Australia and Asia.

Air New Zealand’s 25.9 per cent investment in Virgin Australia, together with its share of Christchurch Engine Centre’s earnings, contributed $15 million and $10 million respectively, for the first half of the 2016 financial year.