Air New Zealand's annual net profit slumped 90 percent as stiff competition over a shrinking travel market dragged down fares.
The carrier, 75 percent owned by the New Zealand government, said Thursday that net profit for the year ended June 30 sank to 21 million New Zealand dollars ($14 million) from NZ$218 million the previous year.
Chairman John Palmer said Air New Zealand was one of the few international airlines to remain profitable during the global recession but the result still "falls short of delivering shareholders an appropriate commercial return."
The International Air Transport Association expects the global airline industry to post losses of $9 billion this year.
Operating revenue for the year was NZ$4.6 billion, down 1.2 percent
The airline's long haul flights carried 1.8 million passengers, down 9.8 percent from 2 million the prior year.
Air New Zealand CEO Rob Fyfe said the operating environment was likely to remain turbulent.
"Although there are some early indicators that the slump in travel demand may be showing signs of having bottomed out, it would be naive to think that there won't be bumps on the road to economic recovery," he said.
A final dividend of 3.5 New Zealand cents per share is to be paid to shareholders.