Air New Zealand Limited · NZX:AIR
Air New Zealand — FY2007 Earnings Presentation
22 slides from Air New Zealand's earnings presentation, Aug 28, 2007
Slide 1: Air New Zealand Annual Results 2007
AIR NEW ZEALAND ANNUAL RESULTS 2007 Soe Bex be = TM ML For personal use only AIR NEW ZEALAND
Slide 2: Financial overview
Financial overview For personal use only Dollar Percentage June 2007 June 2006 movement movement Operating revenue $4,297m $3,805m $492m 13% PBUT $268m $150m $118m 79% NPAT $214m $96m $118m 123% Adjusted operating cash flow* $584m $342m $242m 71% Net cash $1,057m $1,150m $(93)m (8)% Gearing** 47.3%
Slide 3: Key influences on profitability
Key influences on profitability For personal use only 3
Slide 4: Strategic imperatives
Strategic imperatives For personal use only • No.1 in chosen markets • Optimised portfolio of capacity and routes • Strong relationships and alliances to maximise reach • Business simplification • Sustainable margins consistently in the top quartile of the airline industry 4
Slide 5: Focus for the coming year
Focus for the coming year For personal use only • Reinvesting at home • Growing the customer relationship • Protecting our environment • Progressing the long-haul 5
Slide 6: Reinvesting at home
Reinvesting at home For personal use only • Domestic New Zealand remains a key focus and an area where growth is still achievable • Significant investment has been made in the Regional network - in particular via the introduction of the Q300 fleet • Focus will move to improving our products for high
Slide 7: Growing the customer relationship
Growing the customer relationship For personal use only • Our frequent flyer programme will undergo some changes, with further segmentation of status • We will look to grow the value of our loyalty programme by broadening its reach • Further developments online as we put the customer back in full co
Slide 8: Protecting our environment
Protecting our environment For personal use only • Air New Zealand actively seeks to assist in developing aviation biofuels and we continue to assess possibilities in this area • Customers will be given more environmental choices, and will have the opportunity to purchase carbon credits • Significan
Slide 9: Progressing the long-haul
Progressing the long-haul For personal use only • The long-haul network experienced strong growth in 2007, with 7.4% growth in passengers carried • Results of the Business Premier and Pacific Premium Economy products have been pleasing • The long-haul fleet direction has now settled, with wide-body
Slide 10: Retaining flexibility
Retaining flexibility For personal use only • Flexibility is the key to allowing an airline to balance capacity with demand • Air New Zealand now has a favourable profile of aircraft purchase options and lease maturities • We will have the flexibility to either increase or decrease capacity to meet
Slide 11: IFRS opening position
IFRS opening position For personal use only 11
Slide 12: Outlook
Outlook For personal use only • Fuel prices have increased 16% during 2007 and will continue to apply pressure in 2008 • Fuel hedges currently lock-in 62% of our fuel requirement for 2008 at US$70.50 (crude) • Forward bookings through to the high season are strong • Expect to better 2007 PBUT in 200
Slide 13: Attachments
Attachments For personal use only • Financial overview • Cash and gearing overview • Group operating performance • Key operating statistics • Long-haul operating statistics • Short-haul operating statistics • Capital expenditure • New aircraft at a glance • Fleet plan 13
Slide 14: Financial overview
Financial overview For personal use only Dollar Percentage June 2007 June 2006 movement movement Operating revenue $4,297m $3,805m $492m 13% PBUT $268m $150m $118m 79% NPAT $214m $96m $118m 123% Adjusted operating cash flow* $584m $342m $242m 71% Net cash $1,057m $1,150m $(93)m (8)% Gearing** 47.3%
Slide 15: Cash and gearing overview
Cash and gearing overview For personal use only June 2007 June 2006 Movement Adjusted operating cash flow* $584m $342m $242m Net operating cash flow $331m $473m ($142m) Investing cash flow ($510m) ($772m) $262m Financing cash flow $86m $379m ($293m) Net increase in cash ($93m) $80m ($173m) Net cash
Slide 16: Group operating performance
Group operating performance For personal use only Year-on-Year Load Factor & Year-to-Date Yield Movements 16
Slide 17: Key operating statistics
Key operating statistics For personal use only June 2007 June 2006 Movement* Passengers carried 12.5m 11.9m 4.9% Available seat kilometres (ASKs) 35,113m 34,055m 3.1% Load factor 76.5% 75.0% 1.5 pts Yield (cents per RPK) 13.0 12.1 7.7% * Calculations based on numbers before rounding 17
Slide 18: Long-haul operating statistics
Long-haul operating statistics For personal use only June 2007 June 2006 Movement* Passengers 1.7m 1.6m 7.4% ASKs 20,525m 19,415m 5.7% RPKs 15,894m 14,987m 6.1% Load factor 77.4% 77.2% 0.2 pts * Calculations based on numbers before rounding 18
Slide 19: Short-haul operating statistics
Short-haul operating statistics For personal use only June 2007 June 2006 Movement* Passengers 10.7m 10.3m 4.5% ASKs 14,588m 14,640m (0.4)% RPKs 10,980m 10,564m 3.9% Load factor 75.3% 72.2% 3.1 pts * Calculations based on numbers before rounding 19
Slide 20: Capital expenditure
Capital expenditure For personal use only 20
Slide 21: New aircraft at a glance
New aircraft at a glance For personal use only Boeing Boeing Boeing Boeing 787-9 767-300ER 777-300ER 747-400 Passengers 270 234 365 379 Range (km) 13,000 9,640 12,050 11,850 Maximum cruise speed (km/h) 915 870 905 920 CO2 emissions (kgs per 1000 ASKs) 73 90 82 101 21
Slide 22: Fleet plan
Fleet plan For personal use only Operating aircraft June 2007 June 2008 June 2006 movement 2007 movement 2008 747-400 8 - 8 - 8 777-200ER 5 3 8 - 8 767-300ER 7 (1) 6 (1) 5 A320-200 12 - 12 - 12 737-300 14 - 14 2 16 ATR72 11 - 11 - 11 Saab 340A 13 (10) 3 (3) - Q300 8 8 16 4 20 Beech 1900D 16 1 17 - 1