Air New Zealand Investor Update (Op Stats) – August 2018

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Contents
• August 2018 traffic highlights
• Operating statistics table
• Recent market announcements and media releases





August 2018 highlights










* % change is based on numbers prior to rounding
+ The year to date percentage movements have been adjusted on a daily weighted average basis. The adjustment takes into account the difference in
days for the accounting month of July 2018 (29 days) compared with July 2017 (30 days).
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Reported RASK (unit passenger revenue per available seat kilometre) is inclusive of foreign currency impact, and underlying RASK excludes foreign
currency impact.
.
18 September 2018

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Operating statistics table


GroupFINANCIAL YTD
20182017% *20192018% *+
Passengers carried (000)1,2931,2285.3%2,7122,6314.9%
Revenue Passenger Kilometres(m)2,8292,6606.4%6,0125,7316.8%
Available Seat Kilometres (m)3,4143,3172.9%7,2247,0294.6%
Passenger Load Factor (%)82.9%80.2%2.7 pts83.2%81.5%1.7 pts
Short Haul TotalFINANCIAL YTD
20182017% *20192018% *+
Passengers carried (000)1,1361,0785.4%2,3842,3144.8%
Revenue Passenger Kilometres(m)1,3001,1919.1%2,7872,6208.3%
Available Seat Kilometres (m)1,5941,4847.5%3,4343,2457.7%
Passenger Load Factor (%)81.5%80.3%1.2 pts81.2%80.8%0.4 pts
DomesticFINANCIAL YTD
20182017% *20192018% *+
Passengers carried (000)8307964.3%1,7221,6883.8%
Revenue Passenger Kilometres(m)4264055.2%8878644.5%
Available Seat Kilometres (m)5305192.2%1,0991,0803.6%
Passenger Load Factor (%)80.4%78.1%2.3 pts80.7%80.0%0.7 pts
Tasman / PacificFINANCIAL YTD
20182017% *20192018% *+
Passengers carried (000)3062828.5%6616267.6%
Revenue Passenger Kilometres(m)87378611.1%1,9001,75610.1%
Available Seat Kilometres (m)1,06496510.3%2,3352,1659.8%
Passenger Load Factor (%)82.1%81.5%0.6 pts81.4%81.2%0.2 pts
Long Haul TotalFINANCIAL YTD
20182017% *20192018% *+
Passengers carried (000)1571504.3%3293175.4%
Revenue Passenger Kilometres(m)1,5291,4694.1%3,2253,1115.5%
Available Seat Kilometres (m)1,8191,833(0.8%)3,7903,7841.9%
Passenger Load Factor (%)84.1%80.1%4.0 pts85.1%82.2%2.9 pts
Asia / Japan / SingaporeFINANCIAL YTD
20182017% *20192018% *+
Passengers carried (000)65616.1%1301274.4%
Revenue Passenger Kilometres(m)5765446.0%1,1601,1324.3%
Available Seat Kilometres (m)710711(0.2%)1,4141,439(0.0%)
Passenger Load Factor (%)81.1%76.4%4.7 pts82.0%78.6%3.4 pts
Americas / UKFINANCIAL YTD
20182017% *20192018% *+
Passengers carried (000)92893.0%1991906.1%
Revenue Passenger Kilometres(m)9539253.1%2,0651,9796.2%
Available Seat Kilometres (m)1,1091,122(1.1%)2,3762,3453.1%
Passenger Load Factor (%)86.0%82.5%3.5 pts86.9%84.4%2.5 pts
AUGUST
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+ The year to date percentage movements have been adj usted on a dai l y wei ghted average basi s. The adj ustment takes i nto account
the di fference i n days for the accounti ng month of Jul y 2018 (29 days) compared wi th Jul y 2017 (30 days).
* % change is based on numbers prior to rounding
Air New Zealand operates primarily in one segment, its primary business being the transportation of passengers and cargo on an integrated netw ork
of scheduled airline services to, f rom and w ithin New Zealand. The f ollow ing operational data and statistics is additional supplementary inf ormation
only.

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Market announcements
Chief Digital Officer Avi Golan to Return to the United States 17 September 2018
Air New Zealand’s Chief Digital Officer Avi Golan is leaving the airline and will return to the United States at
the end of October to be closer to family.
Chief Executive Officer Christopher Luxon, in commenting on Mr Golan’s three years at the airline said “Avi
will leave a significant legacy when he heads back to the United States. He has implemented a Digital strategy
that is the envy of many airlines globally and most New Zealand companies. Avi has been a fierce advocate
for the role Digital can play in ensuring that Air New Zealand can compete and innovate within the broader
travel sector. His team has delivered numerous wins that have enhanced the customer experience, delivered
incremental revenue, strengthened operational performance and made our systems more secure from cyber
threats.”
Air New Zealand is conducting a global search to identify a new Chief Digital Officer.

Air New Zealand advises AUD FX rate for 2018 Final Dividend 13 September 2018

Air New Zealand advised that the foreign exchange rate used for the payment of the final ordinary dividend
on 19 September 2018 to Australian investors in AUD has been set at 0.9172 (1 NZD is equivalent to 0.9172
AUD).

Air NZ 2018 Notice of Annual Meeting and Voting Form 31 August 2018

Air New Zealand has provided a copy of its Notice of Annual Shareholders’ Meeting 2018 which will be held
at The Piano, 156 Armagh Street, Christchurch, New Zealand on Wednesday 26 September 2018
commencing at 2.00pm (NZST).

The attached Notice of Meeting and Voting Form have been mailed to shareholders. An electronic copy of
these documents has also been made available on the company’s website at:
https://www.airnewzealand.co.nz/annual-meeting

Access Air New Zealand 2018 Notice of Meeting
Access Air New Zealand 2018 Voting Form

Air New Zealand Announces 2018 Annual Results 23 August 2018
Second highest profit in Air New Zealand’s history enables reinvestment in customer experience and staff
bonuses
Air New Zealand announced earnings before taxation for the 2018 financial year of $540 million, an increase
from the prior year result of $527 million, representing the second highest profit in the airline’s history. Net
profit after taxation grew 2.1 percent to $390 million.

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Shareholders of Air New Zealand will receive a final dividend of 11.0 cents per share, taking the total ordinary
declared dividend for the year to 22.0 cents per share, an increase of 4.8 percent from the prior year. The
dividend will be paid on 19 September, to shareholders on record as at 7 September.
Chairman Tony Carter praised the strength of the result, which demonstrates the airline’s resiliency.
In recognition of the robustness of the 2018 result, the Board has awarded staff bonuses of up to $1,800 to
be paid next week to approximately 8,500 Air New Zealanders who do not have other incentive programmes
as part of their employment agreement.
Mr Luxon acknowledged the impact of external disruptions on the airline’s operational performance and
thanked both customers and staff for their loyalty and support.
To deliver greater schedule reliability for customers going forward, Air New Zealand will be leasing three
widebody aircraft, two Boeing 777-200s and one Boeing 777-300, as well as making adjustments to its
schedule as the airline continues to work through the maintenance requirements associated with the global
Rolls-Royce Trent 1000 engine issues.
2019 promises to be an exciting year for the airline and its customers, as Air New Zealand will offer more
cheap fares than ever over the next year as domestic jet capacity grows by three to five percent and regional
turboprop capacity grows by five to seven percent.
This year will also see the launch of new direct services to Chicago and Taipei commencing in November,
new services to Brisbane from both Wellington and Queenstown beginning in December, as well as a new
third daily service added to the Auckland-Singapore route in partnership with Singapore Airlines.
The airline is expecting to receive delivery of 10 Airbus A320/321 NEO aircraft, which will provide continued
growth and cost benefits to the Tasman and Pacific Islands network. Air New Zealand will be the first airline
to fly the Airbus NEO in Australasia. Two Boeing 787-9 aircraft with increased premium cabin space and next
generation Rolls-Royce TEN engines will also join the fleet.
Anticipating continued future domestic network growth, Air New Zealand has announced capital expenditure
for seven Airbus A321 NEO aircraft, with phased delivery expected from 2020 to 2024. The additional aircraft
will be deployed on high demand routes to support further domestic growth. Equipped with new generation
engines and approximately 25 percent more seats, the A321 NEOs are expected to deliver fuel savings and
efficiencies of up to 15 percent compared to the airline’s existing A320 domestic aircraft, helping to reduce
carbon emissions.
Air New Zealand’s Pacific Rim growth strategy has allowed for consistently profitable network expansion over
the past five years, with 17 million passengers a year travelling on the airline compared with 13 million back
in 2013. The airline is focusing on continued investment in regional lounges, customer contact centres and
inflight products and services to enhance the customer experience.
Outlook
Based upon current market conditions and assuming an average jet fuel price of US$85 per barrel, 2019
underlying earnings before taxation is expected to be in the range of $425 million to $525 million.

This excludes an estimated $30 million to $40 million impact from schedule changes prompted by the global
Rolls-Royce engine issues.

Financial Highlights
• Record operating revenue of $5.5 billion, up 7.4%
• Earnings before taxation of $540 million, up 2.5%
• Net profit after taxation of $390 million, up 2.1%
• Operating cash flow of $1 billion, up 14%

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• Fully imputed final dividend of 11.0 cents per share, bringing the 2018 full year fully imputed
ordinary dividends to 22.0 cents per share, an increase of 4.8% from the prior year



Media releases
Air New Zealand Auckland Regional Lounge to triple in capacity 13 September 2018
Air New Zealand will begin construction in October on a new, much larger regional lounge at Auckland Airport,
as part of a $60 million investment in lounges throughout New Zealand over the next two years.

The lounge will cater for up to 265 customers, offering more than three times the seating of the current regional
lounge. It is scheduled to open mid next year, upstairs on Level 1 of the Auckland Airport domestic terminal,
where it will offer expansive views of the runway. The current lounge and valet service will continue to be
available throughout the development.

There are also plans for the airline's Wellington Airport Domestic Lounge to undergo a refurbishment in the
coming months with seating numbers to increase by 10 percent to 374. There will be six different zones in
the new lounge to meet the needs of customers - including a café and bar, barista station, business, lounge
and quiet areas as well as a self-service food and drinks station.

A new regional lounge is currently under construction at Tauranga Airport and will offer three times more
seating than the current lounge. It is expected to open later this year. Plans are also underway for brand new
regional lounges in Christchurch and Nelson.

Air New Zealand General Manager Customer Experience Anita Hawthorne says the airline is focused on
continued investment in its network of lounges to enhance the customer experience.

"We know there is huge demand for Air New Zealand's network of lounges, so we're delighted to be able to
go through the process of redeveloping our regional lounges in Auckland, Christchurch, Nelson and Tauranga
along with our domestic lounge in Wellington to enhance the experience our customers have on the ground
before they fly."

"Air New Zealand's customers are at the core of our business and we expect to see annual passenger
numbers grow from 17 million to 19 million over the next two years, so it's important to invest in our lounges
in order to meet this growth."


Kia Ora magazine wins Best Owned Media award 12 September 2018

Air New Zealand’s inflight magazine Kia Ora has taken out the trophy for Best Owned Media at the 2018
Webstar Magazine Media Awards, for a second consecutive year.

Kia Ora, which underwent a significant refresh last year continues to grow in popularity, with record monthly
readership numbers of 388,000 – up more than eight percent on last year.

Air New Zealand General Manager Global Brand and Content Marketing Jodi Williams says Kia Ora brings
together the very best of New Zealand – making it an inspirational and aspirational read for Kiwis and visitors
alike.

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“In working with Bauer Media to reshape Kia Ora we wanted to continue to showcase stunning travel
destinations while also really highlighting the many great things our country has to offer – people, places, food
and drinks, innovation, design and the arts. It’s fantastic to see this is resonating so well with our readers.”

Brendon Hill, Managing Director of Bauer Media, which publishes Kia Ora on behalf of Air New Zealand says
the magazine is a fantastic example of effective content marketing that meets both Air New Zealand’s
objectives and the reader’s desire for information and inspiration.

“Kia Ora is a premium publication that knows what its audience wants and these latest readership numbers
are testament to that and the hard work the team put into crafting a great magazine. Kia Ora is proof that
people will always engage with quality content.”

Bauer Media has published Kia Ora for the past 14 years

Air New Zealand celebrates a decade as Australasia’s #1 airline 4 September 2018

Air New Zealand has been named Australasia’s Leading Airline for the 10th consecutive year at the World
Travel Awards.

The airline has also been named Australasia’s Leading Airline Brand for the second year in a row, an award
that was first introduced last year. The awards are voted for by travel and tourism professionals, as well as
business and leisure travellers worldwide.

Air New Zealand Chief Marketing and Customer Officer Mike Tod says it’s fantastic to have been recognised
as Australasia’s top airline by both consumers and the travel industry for the past decade.

“This is a huge achievement and I’d like to thank all of our customers as well as those in the industry who
voted for Air New Zealand. This award is a reflection of the commitment our 12,000 staff around the world
put into ensuring we deliver products and services that our nation can be proud of,” Mr Tod says.


Air New Zealand partners with Chinese video platform iQIYI 3 September 2018

Air New Zealand has partnered with one of China’s largest online video platforms iQIYI to provide Chinese
language content for its global inflight entertainment system.

From September, the airline will launch iQIYI as a channel on its inflight entertainment system on all flights,
providing an enhanced onboard experience for its Chinese-speaking customers.

Beijing-based iQIYI has more than 500 million monthly active users. Renowned for producing original content,
the platform has continued to expand, including signing partnerships with Warner Brothers and Netflix. Launch
content on Air New Zealand services will include episodes of the popular XFUN Foodie and Travel Club
(including episodes shot in New Zealand), i Beauty which covers the latest fashion trends and episodes from
this year’s top Chinese reality show Hot Blood Dance Crew.

Air New Zealand’s General Manager Customer Experience Anita Hawthorne says the addition of this new
content targeted specifically at Chinese-speaking travellers is another example of the airline’s efforts to
continue to enhance the travel experience for its customers.

“We continue to invest considerably in our customer experience programme, so it’s great to be able to offer
this content alongside our broad range of movies and TV programmes. iQIYI is one of the big three media
companies in China, so we’re thrilled to have them on board as a partner supplying exciting new content
that’s sure to delight customers,” says Ms Hawthorne.