Air New Zealand Limited · NZX:AIR
Air New Zealand — 1H 2025 Earnings Presentation
35 slides from Air New Zealand's earnings presentation, Feb 20, 2025
Slide 1: Investor presentation 20 February 2025
Investor presentation 20 February 2025 NZX: AIR | ASX:AIZ | US OTC: ANZLY AIR NEW ZEALAND 2024 INTERIM RESULTS 1
Slide 2: Forward-looking statements and disclaimer
F O R WA R D - L O O K I N G S TAT E M E N T S A N D D I S C L A I M E R This presentation is given on behalf of Air New Zealand Limited (NZX: AIR materially from those expressed or implied in its forward-looking and AIR030; ASX: AIZ). The information in this presentation: statements and undue relia
Slide 3: Business Update
BUSINESS UPDATE GREG FORAN CHIEF EXECUTIVE OFFICER AIR NEW ZEALAND 2025 INTERIM RESULTS 3
Slide 4: 1H 2025 – delivering a solid result
1H 2025 – delivering a solid result $155m ASK’s down 4% 8.1m earnings before taxation With up to 8 jet fleet grounded due to additional engine maintenance requirements globally on Pratt & Passengers flown Includes $10m of unused credit breakage Whitney and Rolls-Royce engines Down 3% on 1H 2024 ~$40
Slide 5: Proactively managing elevated levels of grounded aircraft from global engine maintenance delays
Proactively managing elevated levels of grounded aircraft from global engine maintenance delays Up to 11 aircraft expected to be grounded at times in 2H 2025 Actions we have taken to date: 2H 2024 Swiftly negotiated leased aircraft and engines. Expect two additional leased 5-6 Narrowbody engines in
Slide 6: Stable performance across most markets
Stable performance across most markets ASIA • Market capacity normalising after significant NORTH AMERICA growth in the past 1-2 years • Market capacity stabilising following significant growth of around • Singapore, Japan and Bali continue to perform 50% in the prior year well • Premium cabins cont
Slide 7: Transformation initiatives on track to deliver ~$100 million in EBITDA benefits in 2025
Transformation initiatives on track to deliver ~$100 million in EBITDA benefits in 2025 What we said at 1H 2025 progress: Initiatives implemented this half include: 2024 Investor Day: Next gen revenue management tool now rolled out to all route groups ~$40m Ancillary initiatives such as Seats to Sui
Slide 8: Financial Update
FINANCIAL UPDATE RICHARD THOMSON CHIEF FINANCIAL OFFICER A II R A R N N EE W W Z Z EE A A LL A ANND 20 D 2 02 253 IANNTNE UR A IML RESULTS 8
Slide 9: 1H 2025 financial summary
1H 2025 financial summary Earnings/(Loss) before taxation • Operating revenue of $3.4 billion, down 2% ($ millions) • Passenger revenue of $2.9 billion, down 5% • Cargo revenue of $257 million, up 6% Covid-19 impacted 299 • Earnings before taxation of $155 million, down 16% period 185 155 • Net prof
Slide 10: A solid result after adjusting for the impact of engine delays, net of compensation
A solid result after adjusting for the impact of engine delays, net of compensation Earnings before taxation adjusted for impact of engine issues ($ millions) ~$40 million (94) residual adverse impact to ~120 to earnings, despite ~150 compensation of $94 million in 1H 2025 195 185 155 DEC 2024 ESTIM
Slide 11: Profitability waterfall
Profitability waterfall Additional commentary • The waterfall chart includes: ‒ Compensation of $94 million within other revenue, of which ~$30 million relates to other periods ‒ Gain on sale and leaseback of $3 million within other expenses, less than guided to in November due to timing, per the fi
Slide 12: Fleet constraints have led to a temporary deterioration in CASK
Fleet constraints have led to a temporary deterioration in CASK • Reported CASK increased 2.9%, largely due to reduced capacity, ongoing inflationary pressures and inefficiencies associated with fleet constraints • Excluding the impact of fuel price movement, foreign exchange, and third-party 1H 202
Slide 13: Fuel hedging and FX update
Fuel hedging and FX update 2025 Fuel cost outlook Fuel hedging • Hedge portfolio structured to protect against upside movements and allow participation to downward price movements through collars • Currently hedging Brent Crude only; exposed to pricing movements in the crack spread Fuel hedge positi
Slide 14: Fleet investment update
Fleet investment update • Forecast investment of $3.5 billion in aircraft Actual and forecast aircraft capital expenditure1 and associated assets through to FY20292 ‒ Timing of new 787 deliveries remains 1,400 subject to Boeing production rates 1,200 ‒ Approximately $180 million relates to weaker Ne
Slide 15: Further progressing towards our capital management framework targets
Further progressing towards our capital management framework targets PROGRESS MADE IN 1H 2025 Maintain financial resilience and flexibility • ~$285m debt and leases paid down • Target liquidity range of $1.2 billion to $1.5 billion • ~$290m of cash collateral released from restricted • Net Debt to E
Slide 16: Outlook
OUTLOOK GREG FORAN CHIEF EXECUTIVE OFFICER 5 INTERIM RESULTS AIR NEW ZEALAND 2024 16
Slide 17: FY2025 capacity outlook, 2H 2025 uncertain due to engine constraints
FY2025 capacity outlook, 2H 2025 uncertain due to engine constraints 2024 ASKs 1H 2025 2H 2025 FY2025 Estimated Sector Actuals Estimate (millions) (on 1H 2024) (on 2H 2024) Capacity1 Domestic 6,620 (3%) 1% to (1%) (1%) to (2%) Tasman and Pacific Islands 11,655 (1%) 0% to 2% up 0% to 1% International
Slide 18: 2025 Outlook
2025 Outlook • The airline notes that the 2025 financial year will be the first full 12-month period impacted by global additional engine maintenance requirements on the Pratt & Whitney and Rolls-Royce engines that power its Airbus neo and Boeing 787 Dreamliner fleet. • For the second half of the fi
Slide 19: Thank you
2 AIR NEW ZEALAND ‘o_ Thank you A STAR ALLIANCE MEMBER Z-
Slide 20: Supplementary Information
SUPPLEMENTARY INFORMATION AIR NEW ZEALAND 2025 INTERIM RESULTS 20
Slide 21: Cargo performance
Cargo performance • Cargo revenue of $257 million, up 6% on prior comparative period. Key drivers include: ‒ Volumes up driven by increased load factors and a higher proportion of trans-shipments, particularly out of Asia ‒ Partly offset by capacity and yield declines, reflecting competitive market
Slide 22: Fuel cost movement
Fuel cost movement Into plane costs • 1H 2025 $112 $108 million US$/barrel (12%) effective decrease in fuel price • 1H 2024 $128 US$/barrel (121) 13 (5) 879 (20) 746 $ millions Dec 2024 Decrease in hedge loss jet fuel price of $18m US$109 to vs US$91 Dec 2023 per barrel hedge loss of $5m DEC 2023 VO
Slide 23: Key capital management metrics
Key capital management metrics Capital management targets Dec 2024 Jun 2024 (effective from FY2024) Gross debt1 (2,964) (2,816) Cash, restricted deposits and net open 2,083 2,044 derivatives1 Net debt1 (881) (772) Gross debt/EBITDA 3.1x 2.9x Net Debt to EBITDA ratio of Net debt/EBITDA 0.9x 0.8x 1.5x
Slide 24: Debt structure and maturity profile
Debt structure and maturity profile Capital structure as at 31 Dec 2024 Debt maturity profile as at 31 Dec 2024 • Gross Debt of $3.0 billion comprising: ($ millions) – ~$1.4 billion secured aircraft debt and finance leases1 – ~$0.9 billion operating leases1 – ~$0.7 billion unsecured bonds and notes
Slide 25: $94 million in compensation and $3 million gain on sale recognised in the 1H 2025 result
$94 million in compensation and $3 million gain on sale recognised in the 1H 2025 result Compensation recognised in Statement of Financial Performance Dec 2024 Dec 2023 $M $M Other revenue 83 - ~$30 million of which pertains to Fuel 2 - other periods Maintenance 1 - Depreciation and amortisation 8 -
Slide 26: Financial overview
Financial overview Dec 2024 Dec 2023 Movement $M $M % Operating revenue 3,403 3,474 (2%) Earnings before taxation 155 185 (16%) Net profit after taxation 106 129 (18%) Operating cash flow 424 411 3% Cash position1 1,542 1,279 21% Ordinary dividends declared 1.25 cps 2.0 cps (37%) 1 Comparatives at 3
Slide 27: Group performance metrics
Group performance metrics Dec 2024 Dec 2023 Movement1 % Passengers carried (‘000s) 8,086 8,352 (3%) Available seat kilometres (ASKs, millions) 20,453 21,405 (4%) Revenue passenger kilometres (RPKs, millions) 17,032 17,467 (2%) Load factor 83.3% 81.6% 1.7 pts Passenger revenue per ASKs as reported (R
Slide 28: Domestic
Domestic Dec 2024 Dec 2023 Movement1 % Passengers carried (‘000s) 5,174 5,460 (5%) Available seat kilometres (ASKs, millions) 3,235 3,353 (3%) Revenue passenger kilometres 2,695 2,826 (5%) (RPKs, millions) Load factor 83.3% 84.3% (1.0) pts Passenger revenue per ASKs as reported (RASK, 29.9 30.1 (1%)
Slide 29: Tasman and Pacific Islands
Tasman and Pacific Islands Dec 2024 Dec 2023 Movement1 % Passengers carried (‘000s) 1,941 1,902 2% Available seat kilometres (ASKs, millions) 5,864 5,898 (1%) Revenue passenger kilometres 5,070 4,904 3% (RPKs, millions) Load factor 86.5% 83.2% 3.3 pts Passenger revenue per ASKs as reported (RASK, 13
Slide 30: International long-haul
International long-haul Dec 2024 Dec 2023 Movement1 % Passengers carried (‘000s) 971 990 (2%) Available seat kilometres (ASKs, millions) 11,354 12,154 (7%) Revenue passenger kilometres 9,267 9,737 (5%) (RPKs, millions) Load factor 81.6% 80.1% 1.5 pts Passenger revenue per ASKs as reported (RASK, 10.
Slide 31: Aircraft delivery schedule
Aircraft delivery schedule Aircraft delivery schedule (as at 31 December 2024)1 Number Expected delivery dates Number in (financial year) on existing order 2025 2026 2027 2028 2029 fleet Boeing 787 12 8 - 2 3 1 2 Owned Fleet on Order Airbus A320neo / A321neo 13 2 - - 2 - - ATR 72-600 30 1 1 - - - -
Slide 32: Fleet age update
Fleet age update Aircraft fleet age in years (seat weighted)1 10.1 10.2 9.4 Fleet type 2025 2026 2027 8.7 7.9 7.3 Boeing 777-300ER2 10 10 9 6.7 Boeing 787 14 16 19 Airbus A320 17 17 13 Airbus A320/A321neo 20 20 22 ATR72-600 31 31 31 Bombardier Q300 23 23 23 Total Fleet 115 117 117 2021 2022 2023 202
Slide 33: Glossary of key terms
Glossary of key terms Available Seat Kilometres (ASKs) Number of seats operated multiplied by the distance flown (capacity) Cost/ASK (CASK) Operating expenses divided by the total ASK for the period Earnings before interest, tax, depreciation Operating earnings before depreciation and amortisation,
Slide 34: Find information on Air New Zealand
Find information on Air New Zealand Resources Investor website: www.airnewzealand.co.nz/investor-centre Monthly traffic updates: www.airnewzealand.co.nz/monthly-investor-updates Corporate governance: www.airnewzealand.co.nz/corporate-governance Sustainability: https://www.airnewzealand.co.nz/sustain
Slide 35: Air New Zealand 2025 Interim Results
AIR NEW ZEALAND 2025 INTERIM RESULTS 35