Air New Zealand Fuel Hedge Disclosure as at 18 May 2018

UnitsFY18 Q4FY19 Q1FY19 Q2FY19 Q3FY18H2FY19H1FY19H2
Apr-JunJul-SepOct-DecJan-MarJan - Jun 2018Jul - Dec 2018Jan - Jun 2019
Brent Collars
VolumeBarrels1,157,5001,797,5001,707,500572,5002,517,5003,505,000585,000
Ceiling PriceUSD54.0966.1070.2572.5053.6168.1272.56
Floor PriceUSD44.5951.3454.8257.0644.6253.0357.08
Brent Call Spreads*
VolumeBarrels75,000
Bought CallUSD53.13
Sold CallUSD58.00
Brent Swaps
VolumeBarrels375,000637,500
PriceUSD49.4849.34
Bought Brent Puts**
VolumeBarrels125,000
Strike PriceUSD40.00
Barrels1,532,5001,797,5001,707,500572,5003,155,0003,505,000585,000
Barrels2,145,3212,366,4112,341,2212,465,7874,460,0514,707,6324,731,735
71%76%73%23%71%74%12%
USD31,821,71622,785,79715,661,3724,221,20654,922,34538,447,1694,287,210
USD(2,610,925)(4,514,325)(4,349,800)(1,484,575)(6,185,325)(8,864,125)(1,518,450)
USD29,210,79118,271,47211,311,5722,736,63148,737,02029,583,0442,768,760
Notes:
Brent spot was US$79 and 12 month Brent was US$74. As at 18 May 2018, Air New Zealand had no WTI or Singapore jet hedges.
Periods relate to the month of consumption. Air New Zealand does not use three way call structures or leveraged collar structures.
* Brent Call Spreads lower the ceiling price of existing collar structures.
** Bought Brent Puts allow Air New Zealand to benefit if oil prices fall under the strike price.
(1) Compensation from fuel hedges is the sum of the mark-to-market value of all fuel options and swaps as at 18 May 2018.
· The effective portion of changes in the intrinsic value and time value of fuel derivatives is recognised through Other Comprehensive Income; and
· Any accounting ineffectiveness is recognised through earnings.
Volume: Fuel volume is reported in barrels for passenger aircraft (42 US gallons in a barrel).
Price: Price is quoted in USD cost per barrel of Brent.
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Air New Zealand Limited
(2) Net compensation from fuel hedges represents the unrealised gains and losses on fuel hedges. These gains and losses will be accounted for in line with Air New Zealand Limited’s fuel instrument accounting policy:
Fuel Hedge Position as at 18 May 2018
Hedged volume as proportion of total
Total hedged volume
Net compensation from hedges (2)
Purchase cost of options
Compensation from fuel hedges (1)
Estimated fuel consumption

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0%
10%
20%
30%
40%
50%
60%
70%
80%
$30
$35
$40
$45
$50
$55
$60
$65
$70
$75
FY18 Q4
Apr-Jun
FY19 Q1
Jul-Sep
FY19 Q2
Oct-Dec
FY19 Q3
Jan-Mar
Hedged % of estimated jetfuel consumption
US$ per barrel
Fuel hedge position
(as at 18 May 2018)
Hedge percentageBrent Collar CeilingBrent Collar Floor