Releasing the latest Forsyth Barr research on the airline, Mr Rooney said while Air NZ was no exception, it had a better track record than most of its international peers.
The airline's latest operating statistics highlighted domestic yield strength and long-haul capacity increases.
Passenger revenue lifted 3.2% in the first half of the 2015 financial year to nearly $2 billion, reflecting group-wide yield growth of 1.9%.
Revenue passenger kilometres (RPK) grew by 1.7%.
''Notwithstanding fuel price declines, we expect revenue growth to accelerate in the second half, given capacity increases.''
Available seat kilometres (ASK) increased 2.2% in the half but were up 5% for the group in December.
The December increase was driven mainly by increased seasonal services to Tokyo.
Asian capacity was up 20%, he said.
That level of capacity increase was expected to increase further in the second half, given the start in early January of services to Singapore.
Short-haul yields remained strong, Mr Rooney said.
December short-haul yields were up about 5% against December the year before.
However, long-haul yields fell, reflecting a combination of the capacity increase and more competition, particularly from Chinese airlines.
It was worth reiterating the key implications for the aviation market from reduced fuel prices, he said.
They included. -
• Near-term boosts to earnings and return on capital for airlines.
• Lower yields over time as competitive and political forces took hold.
• Greater passenger demand for air travel as prices fell.
• Lower barriers to entry on long-haul routes, particularly low-cost carriers.
• Reduced orders for new more fuel-efficient aircraft as older aircraft could compete more effectively.
Lower fuel prices would have a positive influence on Air NZ's near-term earnings.
Over the medium to long-term, the benefits would be offset by the industry's competitive intensity.
Passenger prices would probably fall, particularly on routes with greater competition, or where new competition entered the market.
What has changed
Earnings: Profit before tax increased 14% to $478 million for 2015 financial year.
Target price: Share price increased to $2.85 from $2.70.
Rating: Outperform.
