Air New Zealand to buy back 3% of its shares

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Air New Zealand (ANZ) has announced plans to buy back its shares on the New Zealand and Australian stock exchanges as it believes its current share price is undervalued.

The carrier will acquire up to 3%, or over 33 million, of its ordinary shares between 4 October 2012 and 27 September 2013. However, the government, which owns 73.09% of the carrier's ordinary shares, will not participate as a seller in the buyback.

"The Air New Zealand board has decided to undertake the share buyback as it believes that the current share price does not fairly reflect the underlying value of Air New Zealand's shares," says the carrier.

As at 14:43 local time, ANZ's share price was up by 4.09% to NZ$1.145 ($0.966).

Last month, the carrier said it hopes to more than double its earnings in 2013 as it foresees more benefits from its fleet modernisation programme. ANZ posted a 12.3% year-on-year fall in its group net profit to NZ$71 million for its fiscal year ended 30 June.