Air New Zealand Limited · NZX:AIR
Air New Zealand — UBS Warburg - Transport and Leisure Conference 2003
20 slides from Air New Zealand's conference presentation, Apr 9, 2003
Slide 1: Air New Zealand: A Strategic Update
Air New Zealand A Strategic Update UBS Warburg - Transport and Leisure Conference Sydney 9 April 2003
Slide 2: Presentation Overview
pas Presentation Overview Oo + Air New Zealand Strategic Development + Airline Development + Engineering Development + Future Direction
Slide 3: Portfolio of inter-related businesses
= Portfolio of inter-related businesses anna ff ye ail Ng yy Z Page 3
Slide 4: The Strategic Dilemma
Profitability oO a The Strategic Dilemma Oe Value Creating Defend and Grow yy Estimated WACC NZ Regional ~. Engineering Estimated WACC nsity Long Haul Value Destroying improve Performance or Reduce Exposure © Size of bubble approximates revenue of business Page 4
Slide 5: Return to profitability
Return to profitability fo . Profit Gearing 150 100 50 6} ah 80} w% (100) a ‘% (150) % 1 1 1998 1999 2000 2001 2002 ‘98 +69 -ono eet oon * profit before unusuals and tax (continuing operations only) ing d t . t Cash flow of $326 for 6 month period Gearing drops to 69.6 percen up by $514 on prior per
Slide 6: A fundamentally different way: Flying Planes vs Flying People
pas A fundamentally different way oe Flying Planes VS. Flying People
Slide 7: An integrated product offering
An integrated product offering S AIR NEW ZEALAND. Full Service Value Based Plus Value Based Le. 2 wo SC AIR NEW ZEALAND EXPRESSCLASS Sek freedom air Page 7
Slide 8: Express Class Strategy
Express Class Strategy “ More People to More Places, More Often” + Reduce costs + Get closer to customers + Remove complexity
Slide 9: Express Class a Success
a Express Class a Success 2 20% savings in fares for customers PAX numbers up 30% on trunk routes Internet bookings averaging 35% (pre-launch 4%) 7% of customers using Kiosks - target is 50% Auckland Koru lounge upgrade completed £2, & EXPRESSCLASS
Slide 10: Economy....War....SARS
pas Economy....War....SARS a AIR NEW ZEALAND.
Slide 11: Economy....War....SARS
Economy....War....SARS € = Impact on Air NZ AIR NEW ZEALAND + Combine to reduce demand s+ Upto 10 percent on key routes s+ US slight rebound as preferred route to Europe s+ Domestic remains strong + Capacity reductions to minimise costs s+ 3.3 percent across international network +> Fuel price falli
Slide 12: Strategic Alliance with Qantas
pas Strategic Alliance with Qantas ae + Current structure not sustainable + Air NZ and Qantas teaming to create strength Prize is affordable travel, sustainable business Good for the company Good for the country
Slide 13: Economic Benefit from the alliance
a Economic Benefit from the alli€NCe ese 2 sce + $1 billion + in economic benefits + More tourists (53,000) + Jobs in tourism and engineering + Economic efficiency - schedules and prices Page 13
Slide 14: Approval process
a Approval process nee + Initial submissions made s+ NZ Commerce Commission 2+ ACCC + Draft determination »» Expected early April + Further consultation sy Address concerns raised + Final determination s+ Expected late June Page 14
Slide 15: Commitments
a Commitments le + Support New Entrants s+ Ground servicing s+ Terminal access s+ Engineering support + Capacity and prices + Delivery of benefits Page 15
Slide 16: Air New Zealand and ANZES
2 Air New Zealand and ANZES So Businesses in transition with separate but complementary strategies Past Present Future / va : ° _ ‘ Brand Manager Suite of airlines — Ful Service VBA Plus VBA \ é MRO \ AIR NEW ZEALA NE NGINEERUING $1 \ y \ vA mo, _ Strategies always linked by Brand Value, Safety and
Slide 17: Air NZ Engineering Services
* * * 2: poe Air NZ Engineering Services nee + 2500 people + Revenues $530m “> ANZES AKL Base + EBIT$47m , » Assets $525m . | Link Engineering (iii . e e Safe Air : ® ANZES CHC Base & aD. Air Prop Services Page 17
Slide 18: Strategic Goals
a Strategic Goals nee + Maximise overall returns + Diversity and Balance to earnings + Apply competencies to markets Page 13
Slide 19: Conclusion
Conclusion AIR NEW ZEALAND Successful, sustainable and special New Zealand business
Slide 20: Air New Zealand: A Strategic Update
Air New Zealand A Strategic Update UBS Warburg - Transport and Leisure Conference Sydney 9 April 2003
Air New Zealand — UBS Warburg - Transport and Leisure Conference 2003 on 6ix