It is still a poor performer in a struggling industry, Mr Palmer said.

"We go into the new financial year with a general recognition that the company, in its current form, is not a long-term option."

We still have a very long way to go before we are on a stable flight path

John Palmer Air NZ chairman

The bleak outlook came as the troubled airline unveiled a loss of $318.5m ($150m; £97.9m) for the year ending in June.

The firm is desperately hoping that Australia's Qantas will come to its rescue by buying a substantial equity stake.

Mr Palmer said that such an alliance was under discussion at the moment, and warned shareholders that ignoring a tie-up with Qantas would be "foolhardy".

Imminent peril

Air New Zealand has been in dire financial straits since it was forced to write off its stake in the collapsed Australian airline Ansett.

The New Zealand government was forced to bail out Air NZ by taking an 82% stake in it.

This financial structure is no longer seen as a long-term option, forcing the airline to seek help elsewhere.

Despite the gloom, the airline's results were better than expected, due to favourable exchange rates and cheaper fuel.

But its bosses were still stressing imminent financial peril.

"[Air NZ] still has a weak balance sheet and poor profitability and it operates in an industry that is volatile and under pressure," Mr Palmer warned.

"We have pulled out of a nose-dive but we still have a very long way to go before we are on a stable flight path."