Air New Zealand remained in a healthy financial position and was expecting an improved profit for the 2012 financial year, chairman John Palmer said yesterday.
"The board has confidence in the company's ability to adapt through the current volatile conditions and return stronger profitability in the medium term, while also recognising the need for preserving financial flexibility through this extended period of uncertainty in global markets," he told the annual meeting in Auckland.
The board was constantly aware of the importance of the business to the nation, the shareholders, customers and staff.
There were some good performances in the short-haul environment, but the company was yet to see full-year benefits from the "seats to suit" product on the Tasman and Pacific Island network and from its alliance with Virgin Australia, Mr Palmer said.
Air NZ expected a better performance in the international long-haul network as results of the review of the network started to be implemented and the company gained greater efficiency from the new Boeing 777-300ER fleet.However, the turbulence and turmoil in the international financial markets was concerning.
"The challenge for us as always, is to continue to adapt at speed while utilising our innovation and balance sheet strength to outperform peers and increase shareholder returns.
"All of these things will be measured against the backdrop of highly volatile market conditions."
Air NZ was unable to control the volatility but it could control how it adapted its business, Mr Palmer said.
"We have a strong foundation and competitive position to build on and expect an improved result for the 2012 financial year, contingent on fuel price levels and global economic conditions," he said.
In the past year, Air NZ had implemented several programmes that would set solid foundations for the coming decade, he said.
Three Boeing 777-300ER aircraft were received at the start of the calendar year and Air NZ was expecting the remaining two in the next six months.
In addition, it introduced two new A320s into the domestic fleet and a further two would arrive before the end of this year.
On the day the company released its annual results in August, it announced an unsecured, unsubordinated, fixed rate $150 million bond offer to New Zealand residents.
The funds would further strengthen Air New Zealand's liquidity position and would be used for general business purposes.
The offer was successfully completed last Friday with demand substantially exceeding the bonds available. Trading started tomorrow on the NZDX, Mr Palmer said.
