Air New Zealand expects demand for air travel to worsen but it is not changing its plane orders or profit guidance for this year, its CEO said Sunday.

"I think it's probably going to get worse," Rob Fyfe said. "The question is how long this phase of low demand continues," he said in an interview on the sidelines of the annual International Air Transport Association's general meeting.

Fyfe said the airline, which has cut capacity by around 15 percent in this quarter, is still expecting to make a profit for its full year ending June.

In the first half ending December, it posted a 79 percent fall to NZD$24 million (USD$15 million) and Fyfe maintained that the full year number would be "a multiple" of this.

Air New Zealand has five Boeing B777-300ERs due to arrive at the end of next year and eight 787-9s not due until 2013. Fyfe said it could buy more 777s to replace the rest of its existing 747 fleet if demand picks up.

"Now is a good time to buy aircraft if you've got the resources to do so," Fyfe said, adding the firm had USD$1 billion in free cash flow.

Airlines have been hurt by weaker travel demand and Fyfe said rising unemployment and surplus capacity would continue to hurt industry profitability, with the full impact of the downturn unlikely to be seen until the traditionally weak northern hemisphere winter.