Air New Zealand Fuel Hedge Disclosure as at 15 Feb 2019

UnitsFY19 Q3FY19 Q4FY20 Q1FY20 Q2FY20 Q3FY19 H2FY20 H1
Jan-MarApr-JunJul-SeptOct-DecJan-MarJan-Jun 2019Jul-Dec 2019
Brent Collars
VolumeBarrels1,550,0001,662,5001,587,500887,500112,5003,212,5002,475,000
Ceiling PriceUSD74.5376.2673.1565.4163.9475.4370.37
Floor PriceUSD60.0761.9460.0554.4953.9461.0358.06
Brent Swaps
VolumeBarrels360,000360,000
PriceUSD68.1068.10
Singapore Jet Collars
VolumeBarrels22,500112,500135,000
Ceiling PriceUSD99.0099.0099.00
Floor PriceUSD82.0082.0082.00
Barrels1,932,5001,775,0001,587,500887,500112,5003,707,5002,475,000
Barrels2,447,2712,182,4532,430,0002,440,0002,500,0004,629,7244,870,000
79%81%65%36%5%80%51%
USD(5,066,791)(1,743,260)(83,364)3,651,469546,389(6,810,051)3,568,105
USD(6,965,700)(5,582,500)(3,807,000)(1,968,000)(232,250)(12,548,200)(5,775,000)
USD(12,032,491)(7,325,760)(3,890,364)1,683,469314,139(19,358,251)(2,206,895)
Brent Call Spreads (3)
VolumeBarrels930,000562,5001,492,500
Bought CallUSD66.4971.5068.38
Sold CallUSD72.0676.5073.73
Bought Brent Puts (4)
VolumeBarrels900,000112,5001,012,500
Strike PriceUSD52.5052.5052.50
Jet-Brent Crack Spreads (5)
VolumeBarrels500,000600,000850,000962,500312,5001,100,0001,812,500
PriceUSD15.6115.0216.0917.2817.5215.2816.73
Notes:
Brent spot was US$66 and 12 month Brent was US$65. As at 15 February 2019, Air New Zealand had no WTI hedges.
Singapore Jet Spot was US$80 and 12 month Singapore Jet was US$82.
(1) Compensation from fuel hedges is the sum of the mark-to-market value of all fuel hedges as at 15 February 2019.
(3) Brent Call Spreads lower the ceiling price of existing collar structures.
(4) Bought Brent Puts allow Air New Zealand to benefit if oil prices fall under the strike price.
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 and Singapore Jet.
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Purchase cost of options
Net compensation from hedges (2)
(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. The effective portion of
changes in the intrinsic value and time value of fuel derivatives is recognised through Other Comprehensive Income. Any accounting ineffectiveness is recognised through earnings.
(5) Jet-Brent Crack Spreads lock in the margin between the Singapore Jet and Brent Crude prices; Air New Zealand has entered into Jet-Brent Crack Spreads to actively manage the volatility of the spread between Singapore Jet and Brent Crude
prices.
Air New Zealand Limited
Fuel Hedge Position as at 15 February 2019
Total hedged volume
Estimated fuel consumption
Hedged volume as proportion of total
Compensation from fuel hedges (1)