New Zealand's flag carrier is expecting higher earnings for the year ending June as its first quarter 2014 profits lifted 40 per cent to NZ$140 million from a year ago.

Relentless focus on global sales and marketing coupled with continuing improvements in costs gave off the much favorable results, according to chief executive Christopher Luxon.

The scenario prompted the company to forecast full-year pre-tax underlying profit to reach an excess of $300 million. This, as long as fuel prices remain stable, Mr Luxon said.

"We have worked hard on improving our cost base in an environment where we have not grown," he said in a statement to the market.

"In fact, we have reduced our capacity flown overall as we realigned our long-haul network," noting the benefits of cost-cutting the airline undertook in recent years."

Mr Luzon expects the company to incur an 8 per cent capacity growth in the 2015 financial year following the delivery of its Boeing 787-9s and 777-300s in the middle of 2014. New Airbus A320 and ATR72-600 aircrafts are likewise expected to be added into the domestic network over the next year.

"The journey ahead is shaping up as incredibly exciting, particularly given the positive economic outlook in many of our key revenue markets," Mr Luxon said. "We are well placed to take advantage of this, with significant fleet additions soon to arrive."

Shareholders will receive a 4.5 New Zealand cent per share interim dividend, up by 50 per cent from a year ago.