Air New Zealand has announced plans to buy back its own shares over the next year on the NZX as well as at the ASX.

The airline said that the buyback would start on October 4 and will go on till September 27 during the coming next year. The airline will purchase as many as 33 million shares during the time. The government has a 73.09 per cent stake in the company and it has said that it will not sell any part of its stake.

"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," the company sad.

The company is holding its annual meeting in Christchurch and it made the buyback announcement to the NZX today. The company has said that it will purchase shares at a price which is more than five percent above the volume weighted average market price for the previous five days.

Air New Zealand has said that it will purchase shares only through the NZX and ASX order matching systems. The shares of the company rose to $1.14.