Air New Zealand ’s 23 per cent stake in Virgin Australia should provide “healthy" earnings contribution over time, Macquarie analyst Russell Shaw wrote in a research note to clients on Tuesday.

“Although the Virgin Australia program has come with a hefty price tag and no major earnings to speak of to date, we believe the transformation at the airline is now largely complete," Shaw said. “If Virgin were to be equity accounted, the upgrades to Air New Zealand’s earnings would be up to 10 per cent through 2016 financial year."