Air New Zealand has roared back into profit, reporting pre-tax earnings of $299 million for the six months to December 31.

The figure for earnings before tax compared to a loss of $376 million for the equivalent interim period last year.

The latest result was at the lower end of guidance of $295m to $325m pre-tax profit and below some analyst expectations.

Following three years of Covid-related losses, the airline says the result reflects sustained demand strength, particularly across the summer peak period, a return in business travel and overseas tourists, as well as cargo revenues above pre-Covid levels.

Operating revenue was $3.1 billion and the airline flew eight million passengers compared to three million for the same period last year.

Its after-tax net profit was $213m for the six months, compared to a loss of $272m in the previous period.

Domestic capacity is at 94 per cent of pre-Covid levels, and international at 60 per cent.

Air New Zealand chair Dame Therese Walsh said the result reflects an important milestone in the airline’s recovery and placed it in a strong position to deliver on its strategy.

The airline will consider resuming paying dividends when it announces its full-year results in August, due to the recovery being faster and stronger.

In its outlook, the airline said it was optimistic about levels of demand but acknowledged significant uncertainty regarding the overall economic outlook both domestically and internationally, with increasing inflationary pressures, tighter monetary policy and other macroeconomic factors.

The second half of the financial year is typically weaker than the first half.

‘‘Against this backdrop and based on the assumption of an average jet fuel price of US$105 per barrel for the second half of the financial year, 2023 earnings before other significant items and taxation are expected to be in the range of $450 million to $530 million.”

This compares to a $725m loss last year.

Chief executive Greg Foran said more capacity could help put a lid on soaring airfares.

‘‘Airfares are higher than they were pre-Covid. Like many businesses, we’re facing a high inflation environment with increased fuel, labour and other supplier costs at a time when more customers are wanting to travel, and that flows through to ticket prices.“

A key focus had been bringing back much-needed capacity to minimise the impact of higher prices on customers.

‘‘With six Boeing 777-300ER widebody aircraft now returned into service, three new domestically configured A321neo aircraft delivered and a fully crewed leased aircraft to serve the Auckland-Perth route, we are adding capacity back at pace,” he said.

He also acknowledged bumpy travel for many passengers.

“We know we have more work to do to tackle customer concerns like long wait times at our call centres, getting planes to depart and arrive on time, lost baggage and getting refunds back in a timely manner.’'

He thanked customers for bearing with the airline through these and other challenges since it restarted flying.

‘’We’re very aware that flying is not currently the pain-free experience it should be and getting back into shape is a key priority.”