The air travel industry appears to be on the mend, with two of the sector's biggest players saying demand is picking up following a turbulent year.
National carrier Air New Zealand and the country's main tourism gateway Auckland Airport reported their annual earnings result on Thursday.
Air New Zealand's underlying profit was $92 million in the year to June, a decrease of 22% on the previous year. Sales fell 12% to $4 billion.
The slump in air travel has forced the company to cut flights and use smaller planes, but the airline says it expects to add flights over the coming year as demand gradually recovers.
Air New Zealand says its profit margin has fallen because fewer passengers are travelling to overseas destinations.
Chief executive Rob Fyfe says the airline had a similar number of passengers to the previous year but carried more domestic travellers which generates less revenue.
However, he says the Air New Zealand remains more profitable than most of its peers.
Mr Fyfe says the airline is looking to the future - including the 2011 Rugby World Cup - and it will have to make sure it has the capacity for extra visitors.
That may mean working with another airline in another market to borrow aircraft, he says.
Performance bonus slashed
Rob Fyfe's annual performance bonus has been slashed by nearly 70% following the Air New Zealand result.
Mr Fyfe earns a base salary of $1.2 million and last year he received an additional $1.24 million in bonuses. This year that bonus was cut to $430,000.
Mr Fyfe says Air New Zealand recently changed its incentive targets for executives and in order for him to receive his full bonus entitlement, the airline would have needed to make at least $215 million.
Auckland Airport profit
Auckland Airport has kept its underlying profit steady. It made $105.1 million in the year to June.
Revenue fell 1.4% to $363 million as airfield charges and retail revenue slipped.
New Zealand's biggest airport says it expects revenue to improve as the economy picks up and airlines start rebuilding their capacity.