Air New Zealand's business review has landed to a muted welcome from analysts.

Andrew Steele at FCNZ says the incremental upside versus existing expectations from the initiatives was modest.

At Craigs, Wade Gardiner rated yesterday's announcement a ''little underwhelming,'' and the airline was pulling the only real lever it had - delaying aircraft deliveries.

The airline released a review that could be split into three parts; updated guidance on medium term capacity growth ( 3 per cent to 5 per cent from 5 to 7 per cent), deferring $750 million in aircraft orders and $60m of extra cost savings over two years.

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FCNZ's Steele says the normalisation of inefficiencies related to Rolls-Royce engine issues made up $20m of those savings and these were already factored in to his firm's forecasts.

''In addition, the changes to group capacity growth were in line with our adjusted forecasts following AIR's January earnings guidance downgrade.''

The airline has cited slowing inbound tourism and sagging domestic leisure demand as reasons for its gloomier outlook and Steele says greater comfort on the consumer cycle is required for the more more positive view needed to shift his firm from its Neutral stance.

''Despite this, we remain comfortable with the company's current dividend profile and expect this will underpin the share price in the near term.''

FCNZ bumped up its 12-month target price from $2.42 to $2.55, reflecting changes to forecasts following the release of the review with the rider that applies to all airlines; changes in competition, material changes to fuel costs, better/worse-than-expected underlying demand.

Craigs maintains a Hold for Air New Zealand and has not changed its target price of $2.61. Today shares were trading up 1 per cent at $2.50.

Airlines have been enjoying an unprecedented 10 straight years of profitability across the industry but there still are casualties.

Overnight, troubled Wow Air folded. The budget airline from Iceland isn't unknown to the Kiwi carrier - last year one of its planes bumped into an Air NZ aircraft on the ground in Los Angeles.

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