Air New Zealand Limited · NZX:AIR
Air New Zealand — Shareholder Meeting (October 2003)
42 slides from Air New Zealand's shareholder meeting presentation, Oct 22, 2003
Slide 1: Annual Shareholders' Meeting - Presentations (ASX cover sheet)
Le. = AIR NEW ZEALAND TO Market Information Services VIA EMAIL NZSX Market ce Company Announcements Office VIA ASX ONLINE Australian Stock Exchange FROM JH Blair bate 22 October 2003 NUMBER OF PAGES INCLUDING COVER SHEET 9 (and 32 slides) susvect Annual Shareholders’ Meeting - Presentations A STAR A
Slide 2: Chairman's Address to Shareholders
CHAIRMAN’S ADDRESS TO SHAREHOLDERS [Slide 2: Chairman’s Header Slide] At last year’s Annual Shareholders meeting we were reporting on a year that was one of the worst that the airline industry had ever faced. While still surrounded by a very unsettled environment, we were looking forward with some o
Slide 3: Chairman's address: domestic Express and strategic priorities
need to do, how we are going to do it and understood the risks of implementing. We are now getting on with it. lt what may have seemed to many to be a counter-intuitive move, we started the change by reinventing the New Zealand domestic business. This will always be the core of our business and we w
Slide 4: Logic of the Qantas alliance
In the view of the Board and management, the logic of the alliance is compelling. We have explained the logic of our alliance proposal in many public forums over the past 15 months. However, for renewed clarity, | would like to reiterate what | believe to be the three key reasons why the Board and m
Slide 5: Financial position and corporate governance
we are comfortable with our financial position. Earnings remain volatile as we have seen, and gearing remains above our target range, even though we have made good progress. We continue to face substantial capital demands with fleet and product upgrades currently being considered. With much of our d
Slide 6: CEO's Address to Shareholders
CEO’S ADDRESS TO SHAREHOLDERS [ Slide 14: Ralph Norris introduction Slide] Thank you John. itis difficult to read or hear from an airline industry commentator lately without hearing about the degree of change that the airline industry is going through. As shareholders in Air New Zealand you will be
Slide 7: Domestic Express Class and Tasman strategy
Air New Zealand is a special company. We are the national carrier of one of the world’s great tourist destinations. But as recent events have shown, this position offers us very little shelter if our costs are too high, or we are not prepared for competition. Over the past year we have done much to
Slide 8: Long-haul strategy and customer journey
Underpinning this work are two basic notions: ¢ That growth in these markets will be driven by inbound leisure travellers ¢ That the comfort needs of the long-haul traveller are greater than that of the short-haul These may seem fairly obvious statements but their implications on our business are pr
Slide 9: Qantas alliance and people
Forcing Qantas and ourselves to “fight it out’ will waste resources and diminish the benefits that will flow to the country and the airlines from allowing the alliance. The benefits of the alliance to the New Zealand economy have been subject to detailed examination by some of the world’s leading ec
Slide 10: Performance outlook and conclusion
[Slide 20 - Performance outlook] Locking forward to the end of the financial year we expect that, all other things being equal, we will deliver a profit slightly above that of the 2003 financial year. That was a profit before Unusuals and Tax of around $220 million. Continued strength in the New Zea
Slide 11: Annual Shareholders' Meeting October 2003
Annual Shareholders’ Meeting € 22 October 2003 AIR NEW ZEALAND
Slide 12: John Palmer, Chairman, Board of Directors
John Palmer Le. oe" Chairman, Board of Directors AIR NEW ZEALAND
Slide 13: 2003 Financial Result
2003 Financial Result € AIR NEW ZEALAND Profit before Unusuals & Tax Operating Cashflow 240 600 200 500 5 160 2 400 . s E = ca ye E 120 = 300 _ _ 2 2 | | = 80 200 1 & 5 _ i 40 100 i. } | fa] i a / 0 - ‘99 0001.02 03 0 CO a 08 Financial Year
Slide 14: International Traffic
International Traffic € AIR NEW ZEALAND % Change comme Aig «m= North America =» Europe 25 15 rr | 5 BOO Asek - Bug roar Source: IATA (4 month moving average)
Slide 15: Strategic Priorities - Phases
Strategic Priorities - 3 Phases € AIR NEW ZEALAND Domestic Short Haul Long Haul Value Value Comfort Inbound Leisure Comfort
Slide 16: Passenger & Traffic Growth
Passenger & Traffic Growth € AIR NEW ZEALAND Domesiic traffic up 22% 20 15 5 0 C= , OG JAS ON DJ FM AM SJ YoY percent increase _ to ‘02 ‘03
Slide 17: Strategic Priorities - Phases
Strategic Priorities - 3 Phases € AIR NEW ZEALAND Domestic Short Haul Long Haul Value Value Comfort Inbound Leisure Comfort
Slide 18: Air New Zealand/Qantas Strategic Alliance
Air New Zealand/Qantas Strategic € Alliance AIR NEW ZEALAND Air New Zealand secures: > successful, > independent, > NZ owned, > international airline 100% committed to New Zealand
Slide 19: Dividends
Dividends € AIR NEW ZEALAND > Financial Position Considerably Improved « Further Progress Still Required * Continuing Capital Demands > No Interim Dividend Expected > Update at Half Year Results
Slide 20: AIR NEW ZEALAND
AIR NEW ZEALAND
Slide 21: CEO and Managing Director Ralph Norris
Le. ee CEO and Managing Director AIR NEW ZEALAND Ralph Norris
Slide 22: Industry consolidation & Air New Zealand
Industry consolidation & Air New Zealand € AIR NEW ZEALAND
Slide 23: Domestic - Express Class
Domestic - Express Class Se AIR NEW ZEALAND > Fares: simple & low > Costs down > Traffic up: 22% ae > Capacity up: 12%
Slide 24: Tasman Express
2, Tasman Express oOo AIR NEW ZEALAND > Fares: simple & low > Cost down > Capacity up: 11% Pacific Islands next
Slide 25: Delivering the long-haul strategy
Delivering the long-haul strategy € AIR NEW ZEALAND > 4 Year Plan fundamentally repositions business Leverage the new business mode to grow demand direct and maintain margin advantage Develop new capabilities and position for growth Optimise margin and extend simplified Simplify the core processes b
Slide 26: Key features of the customer journey
Key features of the customer journey € AIR NEW ZEALAND
Slide 27: Qantas Alliance
Qantas Alliance poe oe" AIR NEW ZEALAND Ge AIR NEW ZEALAND TXN
Slide 28: It's about People
I's about People
Slide 29: Performance Q1 Update
Performance Q1 Update € AIR NEW ZEALAND > Pax up 10% vs Q1 2003 > Capacity (ASKs) up 4.5% to 7.4bn > Traffic (RPKs) up 2 percent to 5.5 bn
Slide 30: Performance Outlook
Performance Outlook £2. Oo AIR NEW ZEALAND > 2004 PBUT Estimate - $220m > Subject to volatility > Update as conditions change
Slide 31: Conclusion
Conclusion L Oo A new Air New Zealand AIR NEW ZEALAND
Slide 32: Annual Shareholders' Meeting October 2003
Annual Shareholders’ Meeting € 22 October 2003 AIR NEW ZEALAND
Slide 33: Item 1: Re-elect directors - Mr John Palmer
ITEM 1:To re-elect directors 2. ‘ Mr John Palmer AIR NEW ZEALAND
Slide 34: Item 1: Re-elect directors - Mr Roger France
ITEM 1:To re-elect directors 2. ‘ Mr Roger France AIR NEW ZEALAND
Slide 35: Item 1: Re-elect directors - Sir Ron Carter
ITEM 1:To re-elect directors 2. ‘ Sir Ron Carter AIR NEW ZEALAND
Slide 36: Item 2: Special Resolution
ITEM 2:Special Resolution £2. : Ss AIR NEW ZEALAND That the constitution of the Company be altered by amending clause 23.2 by inserting the words ‘or a related series of transactions’ after the words ‘means a transaction’.
Slide 37: Item 3: Ordinary Resolution
Le. ee AIR NEW ZEALAND ITEM 3.Ordinary Resolution Issue of share options & discounted shares to the company CEO.
Slide 38: Dow Jones world airline total index
Dow Jones world airline total index Le. includes: LC) AIR NEW ZEALAND SINGAPORE AIRLINES »% BRITISH AIRWAYS MoaANTAS AmericanAirlines’ i CATHAY PACIFIC shh? F-beee hee AES LE FA easyJet.com RYANAIR jetBlue ~ the web's favourite airline THE LOW FARES AIALINE AIRWAYS"
Slide 39: CEO's Remuneration Package (Pre-tax)
CEO’s Remuneration Package (Pre-tax) € AIR NEW ZEALAND CURRENT PROPOSED Below ~ Target Met Outstanding Target : ae Performance $2.2m $1.6m * Half of the after-tax bonus must be used fo pu shareholding level is reached
Slide 40: Ordinary Resolution
Ordinary Resolution € AIR NEW ZEALAND That approval be granted to the issue of share options and discounted shares in the Company to Mr Ralph Norris, the Company Chief Executive Officer and Managing Director, under the Air New Zealand Long Term Incentive Plan summarised in the Explanatory Notes acco
Slide 41: Ordinary Resolution (cont)
Ordinary Resolution (cont) € AIR NEW ZEALAND (b) No issue of share options of discounted shares be made to the extent that it would cause the total number of share options and discounted shares issued under the authority of this resolution to exceed the number representing 0.3% of the fully diluted
Slide 42: Annual Shareholders' Meeting October 2003
Annual Shareholders’ Meeting € 22 October 2003 AIR NEW ZEALAND