Air New Zealand is on course to unveil a record half year result this week, helped by the plunge in oil price as Kiwis enjoy what's been described as a golden age for travel.

But for the national carrier both relatively low fuel prices and the travel boom could be something of a mixed blessing. Air New Zealand has honed itself into a lean machine, able to remain competitive at oil prices around US$120 a barrel.

But jet fuel prices are around half of that level hit in the middle of last year and now nearly all airlines are reporting improved results because of it. Even American carriers, often hovering close to bankruptcy, are mostly back in the black.

Lower oil prices mean the less efficient carriers with older aircraft than Air New Zealand are back in the game. So while Air New Zealand is liking lower fuel costs, other airlines with older planes need them more. Those airlines are now more capable of dropping prices and that's where Air New Zealand may feel the pain if it's forced to sacrifice yield or risk losing passengers.

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And potentially worse for Air New Zealand (but better for passengers), it also opens up the prospect of competitors previously deterred by the high fuel cost of ultra long haul flying here having another look. Rumours swirl occasionally in the travel industry about American carriers resuming direct flights across the Pacific but so far they haven't come to anything.

Although Hawaiian Airlines flies through Honolulu to the US mainland, Air New Zealand has had the non-stop market to itself for several years now. Every day that remains so is a good day for Air New Zealand.

And the benefits of the falling fuel price is also more of a future story. Analysts say the airline will enjoy growing benefits of falling fuel prices this financial year but because of hedging it won't be until 2016 that the serious savings really kick in, assuming oil prices remain around current levels.

While the surging number of Kiwis taking holidays abroad and the bumper inbound tourist summer is great news for Air New Zealand, it also catches the attention of other carriers.

Flight Centre says this golden era of travel resulted in record numbers taking overseas trips last year, with the United States showing 20 per cent growth and the recovering US economy is also fuelling double digit inbound growth.

That's why Air New Zealand is looking to fly to another US destination, further east from Los Angeles and San Francisco.

Air New Zealand chief executive Christopher Luxon. Photo / NZ Herald
Air New Zealand chief executive Christopher Luxon. Photo / NZ Herald

Air New Zealand chief executive Christopher Luxon may or may not reveal more about this on Wednesday but the financial results he will unveil will be good news.

Forsyth Barr is forecasting net profit of $143 million, up 2.1 per cent on last year's record, but it's the forecast 25 per cent increase in underlying profit before tax (excluding the accounting impact of a hit on its Virgin Australia stake) to $226 million that paints an even more impressive picture.

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The airline remains 51 per cent state-owned, wraps itself in the koru and so has to sell profit messages adroitly. Last year' announcement of its best full year profit in a decade coincided with clamour over high regional fares and an election campaign. Hence a prime ministerial "please explain" (although there was no sign of the Government forsaking part of its dividend from the airline).

Unions are also going to be watching the result carefully - last year's bumper full-year led to a company-wide cash bonus for staff. This year they'll be hoping for bigger annual pay increases arguing they've played their part; they say new cabin crew are being signed up for less money and workers have bought into a "high performance workplace culture" programme.