Air New Zealand, the country's largest airline, has reported a 40 per cent boost in full-year pre-tax profit of $663 million on the back of higher passenger numbers due to the tourism boom and lower fuel prices to produce the best result in its 76-year history.

Net profit for the financial year to June 30 was $463m, up 42 per cent on the previous year while record earnings before other significant items and tax of $806m were up 70 per cent, the Auckland-based company said.

The board declared a fully imputed ordinary dividend of 10 cents per share, bringing the full-year dividends to 20 cents per share, up 25 per cent on the previous year. And it has also announced a fully imputed special dividend of 25 cents per share.

Employees will benefit from a company performance bonus of up to $2,500 to be paid to 8,200 staff not covered by other incentive programmes.

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Air New Zealand said the outlook for operating earnings in the 2017 financial year was in the range of $400m to $600m, due to the uncertain impact of a growing number of competitive carriers and current market conditions.

The airline's shares closed yesterday at $2.23 apiece.

This week Air NZ's Australian rival Qantas delivered a record A$1.5 billion full-year profit and resumed paying dividends after a seven-year drought, paying out A$500m to shareholders through a 7 Australian cents per share dividend and a share buy-back.

See Air NZ's latest investor presentation here:

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