Air New Zealand Ltd said on Wednesday its core annual profit slipped 21 percent from the previous year as fierce competition lowered fares, although the figure was still its second-highest ever because of a boom in tourism in the country. Pretax profit for the country's biggest airline fell to NZ$527 million ($383 million) in the year ended June 30 from last year's record NZ$663 million.

It said in June it expected full-year profit before tax would exceed NZ$525 million, up from a prior estimate of NZ$475 million to NZ$525 million. Air New Zealand forecast that pretax earnings for this business year would improve on those of fiscal 2017, adding it expected investment of about NZ$1.5 billion in aircraft and associated assets over the next four years.

"This year Air New Zealand faced an unprecedented increase in the level of competition from some of the world's largest airlines," Air New Zealand Chief Executive Christopher Luxon said. The company's shares have recorded strong gains this year, reaching a nearly 16-year high last month underpinned by growth in passenger numbers.

Copyright Reuters, 2017