News: AIR UPDATE 2-Air New Zealand shares rise to 16-year high on improving passenger numbers

(Recasts on passenger traffic)

WELLINGTON, June 20 (Reuters) - Air New Zealand (AIR) said on Tuesday that its passenger numbers had grown in May and that a decline in a key revenue measure had moderated, helping its shares climb 3 percent to a 16-year high.

"If you start looking at the trend in recent months it’s turned a lot more positive than it was at the start of the year or late last year," said Andy Bowley, Wellington-based analyst at Forsyth Barr.

Passenger numbers rose 8.7 percent to 1.16 million in May compared with the same month a year earlier on the back of a tourism boom in New Zealand.

Revenue per available seat kilometre fell 6.8 percent after the impact of the currency exchange rate was removed, an improvement on a 7.5 percent fall the previous month and reflecting an ebbing in intense competition.

Earlier this month, the airline forecast full-year earnings before taxation will likely top NZ$525 million ($380 million), up from its prior forecast of NZ$475 million to NZ$525 million.

($1 = 1.3835 New Zealand dollars)