The profit included tax credits of $10 million and was well down on the $115 million interim profit reported a year earlier, but favourable foreign exchange hedging, steps taken to reduce capacity to match demand and low capital expenditure commitments impressed Forsyth Barr analyst Rob Mercer.
Favourable exchange rate hedging could provide gains, provided the New Zealand dollar stayed at current levels, of $250 million in the first half of this year and a further $250 million for the full year.
More than half the airline's costs were in United States dollars, and hedging and currency movements for the past six months had already benefited the airline by $135 million.
Mr Mercer also praised steps to reduce capacity and said low capital expenditure commitments had helped the company make those cuts.
Operating revenue of $2.4 billion was an increase of 4%, despite a 5.5% decline in long-haul and 4.1% decline in short-haul passenger numbers.
Air NZ chief executive Rob Fyfe said the fewer passengers caused a revenue hit of $78 million, but a 7.5% improvement in yield, allowed the airline to recover $74 million of that.
Long-haul capacity was reduced by 5.7%, including the withdrawal of one Boeing 747, which improved the passenger load factor by 1.3%.
Greater competition for fewer passengers on the short-haul market put pressure on the airline, but Mr Fyfe said yield grew 4.1% due to the high frequency the airline offers on key routes.
"Frequency is a critical factor for domestic travellers, especially in the business market, and this continues to be a competitive advantage."
Air NZ chairman John Palmer confirmed the airline had "disestablished" 100 long-haul cabin crew positions and it was considering asking pilots to take leave without pay, the opportunity for staff to work fewer hours, part-time hours for cabin crew, not replacing non-safety sensitive positions, not renewing temporary contracts and freezing senior executive salaries.
Revenue from freight, contract services and other sources rose $16 million and Mr Fyfe said the company had successfully grown non-airline revenue through the acquisition of engineering services and online travel businesses.
"We will continue to grow non-airline areas to complement our existing strengths as the airline of choice flying to, from and within New Zealand."
During the six months under review, labour costs grew $27 million due to wage increases and redundancy payments, fuel costs rose $199 million on the back of a spot price which was 36% higher than the previous year, and maintenance by $48 million.
Net finance costs rose $24 million, reflecting the cost of hedging and higher interest rate differentials between New Zealand and the United States.
Looking ahead, Mr Fyfe said hedging would reduce the airline's jet-fuel price from $US123 ($NZ241.3) a barrel in the first half of the year to $US88 a barrel in the second half.
He also said the company would play to its strengths, but if current economic conditions continued, Air NZ was expected to have a significantly improved second half of the financial year.
Mr Palmer said the airline had $1.4 billion in cash, little debt and its management was nimble, which placed it in a strong position.
An interim dividend of three cents a share was declared, lower than the previous corresponding period dividend of five cents a share, but Mr Mercer said the final dividend should also be three cents a share given the positive profit outlook.
