Air New Zealand Limited · NZX:AIR
Air New Zealand — Investor Presentation (July 2004)
7 slides from Air New Zealand's investor presentation, Jul 29, 2004
Slide 1: Airpoints Relaunch Investor Briefing
Airpoints Relaunch Investor Briefing
Slide 2: Why change the scheme?
Why change the scheme? __- > Current scheme not sustainable over the long run — Over 30 billion points accrued — Points accrual outstripping redemption by approx. 1/3 Customers value points but are frustrated by inability to use them when they want to Points awarded relate primarily to distance flow
Slide 3: Changes required
Changes required > To meet the needs and expectations of our Airpoints members, we needed to: — Realign award of Airpoints from distance towards fare paid — Ensure that all programme partner relationships were generating commercial yields ~ Make it simple for customers to use their Airpoints > New s
Slide 4: Increase in margins from third party sales
Increase in margins from third party sales > Significant review of commercial viability of Airpoints partner relationships undertaken > BNZ GlobalPlus retained > American Express membership rewards will cease to convert from 31 Dec 2004 — But BNZ still has American Express so will convert customers
Slide 5: Accounting Treatment
Accounting Treatment > We have one of the most conservative approaches to accounting for FFP — All points sold to third parties are deferred until redemption — Routes with a FFP redemption greater than 7% (6 routes) are done on a deferred basis at an average yield — Other routes are on an incrementa
Slide 6: Key takeouts
Key takeouts > New scheme is about simplicity — Simple for customers to use and delivers benefits by removing restrictions — Simple to administer - in particular driving redemption online and thus cost out of programme ~ Rewards our most valuable higher yielding customers > Sales to third parties is
Slide 7: Key takeouts cont.
Key takeouts cont. > This is a ground breaking new approach and there is implementation risk > But doing nothing was not an option, knowing that the current FFP model is not sustainable > At our investor day we indicated that by the end of July we will have achieved $50m in savings - and we have