The award recognizes an airline that has achieved "a commercial rebirth through a life-changing transformation".

Air Transport World is one of the leading aviation publications in the world and has been running its annual awards for more than 30 years.

Judges commented that "Air New Zealand survived a near-death experience in 2001 to remake itself into a profitable and innovative competitor across different markets. In just three years, Air New Zealand has become an industry leader in both product and culture".

Air New Zealand Managing Director and Chief Executive Ralph Norris said the award was a reflection of the hard work and dedication of staff across the business.

"The transformation that Air New Zealand has experienced over the past three years would not have been possible without the considerable effort of employees in every part of the business. Everyone within the airline should take a great sense of pride in this award because it is a reflection of their commitment to deliver a uniquely Kiwi experience in one of the world's most competitive industries," Mr Norris said.

Air New Zealand has posted combined annual profits of NZ$331 million over its last two financial years, including a 10% rise in profit before unusual items and tax for the year to June 30, 2004.

The airline's gearing (including operating leases) fell from 93% in 2001 to 53% in 2004. It also has around $NZ 1-billion in cash reserves and expects to pay its first dividend since 2001 this year.

A business transformation programme, which includes more than 40 initiatives, has also been launched to deliver NZ$245 million in savings over four years.

Air New Zealand will update the market with an earning guidance for 2005 at its interim result on February 24.

Air Transport World says Air New Zealand's improved financial performance has placed it in a position to tackle its biggest challenge yet – the turnaround of the long haul business.

Mr Norris said programmes for the NZ$160-million upgrade of the airline's Boeing 747 fleet and introduction of the eight new Boeing 777-200s were progressing well.

"There's a growing sense of anticipation and excitement within the business as we move closer to the introduction of the first upgraded 747 in June and the arrival of the first Boeing 777-200 in September.

"The new long haul product specifications have been approved and the new look is becoming a reality as production of key elements, such as the new lie flat seats and seat back In-flight Entertainment (IFE) system, begins."

Mr Norris said Air New Zealand's intentions around refreshing its long haul product were simple and clear.

"We intend to offer the most complete, innovative and uniquely Kiwi experience possible, in an effort to exceed customer expectations on every long distance flight. We've measured our offering against other leading carriers and are confident that we will surpass them with our total product offering."

The first dedicated routes for the new long haul product will be announced in February.

NOTE: The content of all Air New Zealand media releases are accurate at the time of issue, as stated at the top of each release. For updates on any changes, please contact Air New Zealand.

Air New Zealand is proud to be a member of Star Alliance. The Star Alliance network was established in 1997 as the first truly global airline alliance to offer worldwide reach, recognition and seamless service to the international traveller. Its acceptance by the market has been recognised by numerous awards, including the Air Transport World Market Leadership Award, Best Airline Alliance by both Business Traveller Magazine and Skytrax. The member airlines are: Adria Airways, Air Canada, Air China, Air New Zealand, ANA, Asiana Airlines, Austrian, Blue1, bmi, Continental Airlines, Croatia Airlines, EGYPTAIR, LOT Polish Airlines, Lufthansa, Scandinavian Airlines, Shanghai Airlines, Singapore Airlines, South African Airways, Spanair, SWISS, TAP Portugal, Turkish Airlines, THAI, United and US Airways. Aegean Airlines, Air India, Brussels Airlines and TAM have been announced as future members. Overall, the Star Alliance network offers 19,500 daily flights to 1,071 airports in 171 countries.

For more information about Air New Zealand visit www.airnewzealand.com and for more information about Star Alliance visit www.staralliance.com.