Air New Zealand 2019 Investor Day Materials & FY19 Outlook

Stock exchange listings: New Zealand (NZX: AIR) / Australia (ASX: AIZ) / ADR (OTC: ANZLY)


MARKET ANNOUNCEMENT

Air New Zealand postal address: Private Bag 92007, Auckland, 1142, New Zealand
Investor Relations email: investor@airnz.co.nz
Investor website: www.airnewzealand.co.nz/investor


27 May 2019
Air New Zealand 2019 Investor Day Materials and FY2019 Outlook
Air New Zealand is today holding its 2019 investor day for institutional shareholders in
Auckland, beginning at 1:30pm NZST. The investor day event will be accessible live via
webcast. For a link to the webcast, please click here.

Attached is the slide presentation that will be discussed during the event. Included in
slide 15 of the presentation is an update to the airline’s 2019 outlook.

Updated 2019 outlook:
Based on the current market environment and reflecting an additional ~$25 million
headwind from increased jet fuel prices (assuming an average price for the second half
of the year of US$78/bbl
1
), we are targeting 2019 earnings before taxation to exceed
$340 million.

Prior 2019 outlook (last disclosed on 28 March 2019):
Based on the current market environment and expectations for the average jet fuel price
in the second half of the year of US$75/bbl
1
, we are targeting 2019 earnings before
taxation to be in the range of $340 to $400 million.

1
Prior outlook assumed an average Singapore jet fuel price for the full year of US$81/bbl;
Current outlook now assumes an average Singapore jet fuel price of US$83/bbl for the
2019 financial year.


Please contact Head of Investor Relations, Leila Peters via email at
leila.peters@airnz.co.nz or +64 9 336 2607 if you have any questions.

Ends.

---

1
Investor Day
2019
27 May2019

2
Forward-looking statements
This presentation contains forward-looking statements. Forward-looking statements often include words
such as “anticipate”, “expect”, “intend”, “plan”, “believe”, “continue” or similar words in connection with
discussions of future operating or financial performance.
The forward-looking statements are based on management's and directors’ current expectations and
assumptions regarding Air New Zealand’s businesses and performance, the economy and other future
conditions, circumstances and results. As with any projection or forecast, forward-looking statements are
inherently susceptible to uncertainty and changes in circumstances. Air New Zealand’s actual results
may vary materially from those expressed or implied in its forward-looking statements.
The Company, its directors, employees and/or shareholders shall have no liability whatsoever to any
person for any loss arising from this presentation or any information supplied in connection with it. The
Company is under no obligation to update this presentation or the information contained in it after it has
been released.
Nothing in this presentation constitutes financial, legal, tax or other advice.

3
Today’sspeakers
NickJudd
Chief Strategy, Networks & AlliancesOfficer
CamWallace
Chief RevenueOfficer
ChristopherLuxon
Chief ExecutiveOfficer
CarrieHurihanganui
Chief Ground OperationsOfficer
JeffMcDowall
Chief FinancialOfficer

4
Agenda

5
Businessupdate
ChristopherLuxon
Chief ExecutiveOfficer

6
•We are resilient and adaptable, with the ability
to respond quickly to changing macro
conditions
•We have initiativesin place to drive
sustainable cost improvement, earnings
growth and improved ROIC in the lower
demandenvironment
•We are committed to continued investment to support
exceptional culture, to delivering a superior customer
experience and to making strong commercialreturns
•We are targetingstrong free cash flow generation over the
next three years
Key messages you should take away from today

7
Operational
79
years in operation
32
internationaldestinations
1
20
domesticdestinations
PacificRim
Focused network driven by
alliancerelationships
~12,500
Air New Zealand employees
basedglobally
Financial
Baa2
investment grade credit
rating fromMoody’s
13%
Annualised shareholder
return over the past 10 years
16
Years of consecutive
profitability
2
14
years of consecutive
dividenddistributions
8%
Average dividend yield over
the past 10 years
Community
#1
corporate reputation
in New Zealand for
5 consecutiveyears
#1
corporate reputation
in Australiafor
3 consecutiveyears
#1
New Zealand’s most
attractiveemployer
Winner
2019 Eco-Airline of the
year
Who we are
1
Includes Seoul route which commences late November 2019.
2
2019 full year outlook as disclosed in the Business Review update on 28 March 2019.

8
Our GoBeyondmission continues to guide our priorities for
sustainablesuccess

9
We are constantly striving for a successful balance between
our customers, our culture and our commercial performance

10
Record level
Overall customersatisfaction
(stable year on year)
# 1
Corporate Reputationin
New Zealand andAustralia
(no change from 2018rankings)
6ptd
Net promotor score
(improvement from 2016)
Despite network disruptions this year, our key customer
metrics remain high, reflecting ongoing investment

11
Indigenous Growth
Development Programme
New parental leave policy
Learning & DevelopmentDiversity & Inclusion
Future of Work
Continuous learning
Investment in mobility tools
Reskilling
Automation
The power of our brand is embedded in our
~12,500 people and our continued investment in them

12
Our brand andKiwi
serviceculture
Customer loyalty,
driven bystrength
of ourdomestic
network andAirpoints
™
programme
Our alliance-driven
Pacific Rimnetwork
Our simplified and
fuel efficient fleet,
with the ideal cost
structure for the
New Zealandmarket
We have the right business model and competitive
advantages to sustain long-term commercial success...
Record level of
customer satisfaction
#1 Corporate
Reputation in New
Zealand and Australia
New Zealand’s Most
Attractive Employer
82% Domestic
passenger market
share
Unmatched network
and customer offering
3.2 million Airpoints
TM
members and growing
Over 30 international
destinations, focused
on the Pacific Rim
Deep revenue share
partnerships de-risk
international growth
Young and modern
fleet driving strong
cost efficiencies
Targeting flat-to-
improving CASK
performance

13
Qantas
Hainan
Airlines
Cathay
Thai
Airlines
China
Southern
Virgin
Australia
China
Airlines
Bloomberg
WorldAirlines
Index
Singapore
Airlines
Air
China
ANA
AirNewZealandChina
Eastern
Source: Bloomberg, period ended as at 10May2019.
APACPeers
348%
Bloomberg
WorldAirlines
Index
NZX50ASX200S&P500
Air NewZealand
Indice s
348%
10 year total shareholder return
...as demonstrated by our shareholder return
performance over the past 10 years

14
Moderation in demand growth
to 3% to 5
%
Mid-year saw softening of demand
growth in domestic leisure segment
from high single digits to ~4%,
along with slowing inbound tourism
growth
We have faced some challenges this year which have
impacted our financial and operational performance...
Impacted ~2,500 flights, ~150
cancellations*
Significant network disruption,
driving additional costs to
ensure operationalresiliency
for our customers
Rolls-Royce global engine
issues impacted network and
operating costs
* Network impacts for 2019 financial year through 20 May 2019.

15
Prioroutlook*
Based on the current market
environment and expectations for
the average jet fuel price in the
second half of the year of US$75/
bbl
1
, we are targeting 2019 earnings
before taxation to be in the range of
$340 to $400million.
Updatingour
2019outlook
Based on the current market
environment and reflectingan
additional~$25 million headwind
from increased jet fuel prices
(assuming an average price for the
second half of the year of
US$78/bbl
1
), we are targeting 2019
earnings before taxation
to exceed $340million.
* Prioroutlook as disclosed most recently at the Company’s Business Review update on 28 March 2019.
1
Prior outlook assumed an average Singapore jet fuel price for the full year of US$81/bbl; Current outlook now assumes an average Singapore jet fuel price of
US$83/bbl for the 2019 financialyear.
...however, we are reaffirming our 2019 outlook from
January, despite higher fuel prices

16
Forward bookings reflect softer
revenue growth to prior
forecast. Marketnotification of
earnings expectations and
commencement of business
review
Announcement of business
review including network growth
revisions, fleet deferrals and cost
reductioninitiatives
Commencedfurther cost
transformation reviews across
targeted operational and
overheaddepartments
Mar2019May –Jun2019Jan2019
We responded quickly to signs of a slowing growth
environment...

17
17
...and took immediate and decisive action to adjust our business
Cost
•Launch of a two-year cost reduction
programme
•Expecting to achieve an additional ~$60
million in annualised savings over this
period
•Focused on both operational and
overhead costs
Network
•Revised medium term growth to 3% to
5% (from 5% to 7%)
•Focused on optimising network to
maximise and diversify revenue
•Stimulate new demand
•A moderate rate of growth expected on
existing routes
Customer
•Progressive roll-out of enhanced seats
across multiple cabins
•New in-flight soft products including free
Wi-Fi onboard enabled international
flights
•Upgraded lounge facilities across the
network
Fleet
•Adjust aircraft deliveries to reflect
slower growth environment
•Fleet deferrals of ~$750 million
•Smoother capex profile in 2020-2022
period

18
~+5%
Focused network strategy is demonstrated by our
preliminary 2020 capacity plan
Long-haul
New Routes
DomesticLong-haul
Existing Routes
Tasman &
Pacific Islands
Preliminary 2020
Capacity Growth

19
Communicated
as at 28March:
Revised aircraft
deliveryschedule
:
1
Delivery schedule as at 26 May 2019.
2
Does not reflect two additional A321
NEO aircraft on order for expected
delivery in 2024.
Recent fleet deferral decisions support the 3% to 5% growth
target...

20
* Stats New Zealand and Ministry of Business, Innovation and Employment.
The forecast annual growth rate of 4% represents the forecast CAGR for international visitor arrivals to New Zealand in the period 2018 to 2025.
...as do updated external forecasts reflecting a moderation
of tourism growth rates...

21
21
...however, we continue to maintain fleet flexibility that we
can leverage should the demand environment change
41
unencumbered aircraft by 2020
Ability to flex down our fleet*
Ability to expandthe fleet
early termination options
Wide-body
four 777-200ERs
5
FY20
one 777-300ER
Narrow-body
12 A320/A321s
Turbo-prop
23 Q300s
two ATR72-600s
* Does not include the widebody replacement programme aircraft or one for one replacement aircraft.
** One of these options is only available if unexercised in 2020.
• Purchase growth units
• Incremental operating leases
• Use purchase rights and
options for growth units
FY21
two 777-300ERs**
two A320 domestics

22
22
Cost reduction programme targeting $60 million in
annualised savings by the end of 2021
123
A targeted review of
the operations cost
base
~5% reduction in
overheads through
reprioritisation,
process efficiencies
and automation
Removal of
inefficiencies
associated with the
Rolls-Royce engine
issues
The cost reduction programme is focused on three key pillars:
Savings expected to be
achieved in 2020 & 2021
Savings expected to be
achieved across 2020 & 2021
Savings expected to be
achieved across 2020 & 2021

23
23
We will continue to invest in the customer experience...

24
Selected engine:GEnx-1B
Superior operating
economicswhen
compared to 777-200
Partnership with Boeing and GE provides many advantages
Highlyfuel-efficient,
saving ~190,000tonnes
of carbon perannum
Order flexibility for 787
aircraft type,size and
timing
Able to perform a similar
mission set to the current
777-200 fleet
Engine supplier
diversity
Selected airframe: Boeing787-10
...as demonstrated today with our commitment to purchase 8
787-10 Dreamlinersfrom 2023
~95% commonality of
parts with 787-9 offers
significant efficiencies

25
We have attractive opportunities to achieve medium-term
network growth of 3% to 5%
We have numerous initiatives to drive strong revenue
performance
We have multiple levers to drive continued operational
efficiencies and productivity in the future
We are committed to disciplined capital deployment, with a
focus on strong shareholder returns
What you will hear today

26
Network
opportunities
NickJudd
Chief Strategy, Networks & AlliancesOfficer

27
Header text
9
We have a strong and diversified network with further
opportunities for profitable growth
Routes operated solely by alliance partners
Routes operated by Air New Zealand
Seoul route will commence late Nov 2019

28
•Hong KongAirlinesexit from
AKL-HKG in May 2019
•Exit of AirAsia X from AKL-OOL
•China airlines exit AKL-SYD
and CHC-MEL/SYD
Asia
Virgin Australia reduced AKL-SYD,
CHC-SYD and BNE-WELcapacity
Tasman
Emirates reduced services
to Bali by ~15% less than
six months after moving to
daily services
Pacific
Islands
Competitors are finding the New Zealand market difficult
Air Canada
introducing seasonal
service YVR-AKL
from Dec 2019
North
America

29
Contribution margin(%)
Load factor
(%)
Grow
capacity
Grow
yield
Growload
factor
Review
•All routes evaluated against their
strategic objectives and profitability
targets on a quarterly basis
Continuously focused on route performance and ensuring
that our fleet is utilised in the best way possible

30
Grow
capacity
Grow
yield
Growload
factor
Review
Contribution margin(%)
Load factor
(%)
•All routes evaluated against their
strategic objectives and profitability
targets on a quarterly basis
–Action plans created for routes in
the ‘review’ quadrant
–Decisive action taken where
necessary
Continuously focused on route performance and ensuring
that our fleet is utilised in the best way possible

31
Grow
capacity
Grow
yield
Growload
factor
Review
Contribution margin(%)
Load factor
(%)
•All routes evaluated against their
strategic objectives and profitability
targets on a quarterly basis
–Action plans created for routes in
the ‘review’ quadrant
–Decisive action taken where
necessary
•Routes need to stand on their own
merit and
make sense relative to other
routes in the network
Continuously focused on route performance and ensuring
that our fleet is utilised in the best way possible

32
Case Study: Re-timing of our Hong Kong flight
•Previously operated AKL-HKG as an overnight
flight
•This left one widebody aircraft on the ground for
~11 hours before the next scheduled departure
•By re-timing this flight, ground time reduces to
~2 hours which enables us to:
−Free up one widebody aircraft for
additional flying or for use as an
operational spare
−Achieve greater crew efficiencies
−Serve local traffic with no material impact
on connectivity or target traffic flows

33
Upgaugeaircraft
2
Attractive newmarkets
1
Maintain or constrain
existing routes
3
20182019E2020E-2022E201520162017
6.6%
Group capacity growth (Historical and currenttargets)
11.5%
~4%
Averageof
~+3% to+5%
6.3%
5.0%
4
Moderate network growth over the medium-term will be
driven by three principles

34
Growth will be focused on stimulating demand
from newmarkets
Long-haulTasmanDomestic
Auckland
Invercargill
Wellington
Queenstown
Auckland
Chicago
Seoul
Taipei
Brisbane
Christchurch
Si ngapore

35
Case study: Diversifying demand in Asia by
expanding into Seoul
Why Seoul?
Inbound leisure demand is strong, with Seoul
being New Zealand’s third largest Asian market
Currently ~40,000 Koreans living in New Zealand
Demand is highly concentrated, with Seoul
representing ~90% of travel demand
Attractive yields
Approximately 50% of travellers arrive on a one
stop ticket, with most choosing to book online
Existing sales presence, Star Alliance partner
(Asiana Airlines) and trade relationships in-market
Upgaugeaircraft
2
Attractive newmarkets
1
3
Maintain or constrain
existing routes

36
Lower cost pertrip
Lower
cost
per
seat
A320
CEO
A320
NEO
A321
NEO
Realising cost efficiencies with upgaugedaircraft
NEO aircraft driving cost effective growth on
Tasman and Pacific Islands markets
Upgaugeaircraft
3
Maintain or constrain
existing routes
Attractive new markets
1
2

37
201420152016201720182019E2020E
Domestic example
•Over 20% seat growth over the past
5 years
•Expect slight decline in domestic
seats for 2020 reflecting lower
capacity
•Achieved by targeted frequency
reductions in select markets
Upgaugeaircraft
2
Attractive newmarkets
1
3
Targeting positive RASK on existing routes with
stable or slightly declining capacity
Maintain or constrain
existing routes
11.2 million
seats
Domestic network seats
(Actuals & indicative forecast)
~13.8 million
seats
Expect
slight
decline in
seats after
years of
significant
growth

38
Header text
9
Routes operated solely by alliance partners
Routes operated by Air New Zealand
Seoul route will commence late Nov 2019
Revenue share alliance partner
Code share partner
Our strong position is further supported by revenue
share alliances and deep code share partnerships

39
Tasman performance following end of Virgin Australia
alliance has met our expectations
•Large volumes of additional
capacity have been addedon
the Tasman by several
competitors
•We have made rational capacity
decisions and continue to focus
on RASK performance
•Our market share has improved
since termination of the alliance
34%
37%
25%
26%
10%
10%
9%
16%
18%
Other15%
Trans-tasmancapacity share
*
* Left-hand side represents capacity share data for the 12 months prior to the dissolution of the Virgin Australia alliance. Right-hand side represents actual and
scheduled capacity for the 12 months to November 2019.

40
What you can expect
• Overall 2021 and 2022 capacity
growth expected to be lower than
2020
• Aspiration to grow new markets
into daily services
• Continuous optimisation of
existing network as needed
−Including fleet type and
scheduling
−Relentless focus on
enhancing route profitability
Our future network plans

41
Delivering profitable
revenue growth
CamWallace
Chief RevenueOfficer

42
Drive effective market development activities
to support new routes
Invest further in the premium customer
experience
Increase value from loyalty and ancillary
Maintain strength in our home market
Leverage customer segmentation data
Focused on key opportunities to drive profitable revenue growth
Innovate revenue management

43
1
In -service fleet as at 30 April2019.
LCC Competitor
18%
Air New Zealand
82%
Leveraging our domestic competitive advantages:
•New Zealand's most iconic and trusted brand
•Unmatched network offering against sole LCC
competitor
−Over 400 flights daily to 20 domestic destinations
−33 A320/A321 narrow-body aircraft
1
−52 turbo-prop aircraft
1
−15 domestic lounges
•Single class cabins drive cost discipline, with
customers valuing ground product and flexibility
•100% of domestic flight emissions are offset
•Working with Tier 3 domestic carriers
We have the highest domestic market share of
any APAC airline
Passenger
market
share

44
BusinessTravelInboundTourismDomesticTourism
Strong relationships and contracts
with Corporate, SME and
Government clients
Senior sales personnel based in key
regions, connecting with influencers
in local communities
Stimulation of new international
markets (e.g. Seoul, Chicago,
Taipei) expected to have positive
result for domestictravel
Leveraging partnerships
with alliance JVs andkey
codeshareairlines
Fare restructure implemented
in late February performingin-line
withexpectations
Lower fare classes have been
stimulated, skewed primarily to
regionalports
Domestic traffic is driven by three different and
distinct customer segments and dynamics

45
* Larger SME’s are account managed.
Organisational sales structure and multi-product
approach is valued by our business customers

46
• Tripconsideration
• Flight ads forprospecting
• Hotel ads forprospecting
• Flight ads forretargeting
• Hotel ads forretargeting
• Destination ads forretargeting
• Dynamic retargeting ads for mobileapp
• Dynamic retargeting ads forancillaries
...weactivelyengage
withcustomersacross
every phase oftravel
consideration
Dreaming
Planning
Booking
Experiencing
We understand how to attract inbound leisure
customers better than our competition

47
Case study: Stimulating interest in New Zealand
and Air New Zealand prior to Chicago route launch
Focus: present the Air New Zealand
brand and New Zealand destination that
will get consumers motivated to
experience and share amongst their
friends and followers
Solution: provide a fully immersive pop-
up experience
Target audience: consumers, travel
agents, media

48
Understanding our customers better allows us to
make investment decisions with better returns
Customer segmentation profiles

49
Domestic
Seats toSuit
International Short-haul
Seats toSuit
Innovators in customer segmentation with “Seats to
Suit” focused on short-haul markets...

50
Seat pitch
Leg room
...and we will be looking to roll out a new long-haul
economy product, offering additional comfort
New long-haul product will offer:
•More leg room
•Front of Economy cabin
•Additional Airpoints
TM
earned
•Differentiated seat set-up and soft product

51
60%
55%
14%
16%
26%
29%
Business Premier
TM
20132018
Revenue as a proportion of
International long-haul revenue
Premium Economy
Economy
Premium cabins have grown in popularity across
our long-haul network
20132018

52
Maximising experiences of premium travel that
customers will value is key to future cabin planning
•Continuous innovation in cabin
experience
•Applicable across various markets
•Consideration of interplay
between hard and soft product
•Focus on personalisation
elements

53
*As at 30 April 2019. Calculation based on Stats NZ household data.
Our unique Airpoints
TM
loyalty programme is simple,
transparent and strongly valued by New Zealanders
•1 AirpointsDollar
TM
= $1
•No blackout periods
Simple loyalty currency
with no restrictions
Most aspirational loyalty
programme in New Zealand
•At least one person per
New Zealand household is
an Airpoints
TM
member*
A loyalty programme that is
truly valued by members
•Low expiry rate indicates
engaged membership
•920K flights purchased in 2018
using AirpointsDollars
TM

54
2013201420152016201720182019E
Financial
Services
Shopping
~130%
AirpointsDollars
TM
issuance from
our financial partners
Our partner relationships help drive a loyalty
ecosystem that adds further value
Food
Utilities
65+ ground partners
Fuel
Real
Estate

55
Clear linkage between our high value loyalty
members and increased premium cabin bookings
43%
40%
41%
37%
19%
11%
33%
29%
8%
12%
9%
14%
9%
11%
7%
9%
21%
26%
10%
11%
2015
EliteGoldNon-memberSilverJade
201820152018
Business Premier
Premium Economy
Long-haul premium cabin revenue bookings

56
201320142015201620172018
Focused on driving continued high growth in
ancillary product demand
What is included in our definition
of Direct Ancillary?
•Seat Select
•OneUp
TM
•SkyCouch
TM
•Unaccompanied Minor
•Excess Baggage
Direct ancillary
revenue has
grown
~3x

57
We are in the early stages of applying machine
learning to further optimise revenue management
Several weaknesses with traditional
revenue management systems
• Reliance on historical booking
data to predict future demand
When used with existing systems,
machine learning can improve our results
Improve the demand forecast by
considering significant metadata
• Inventory re-optimisation does not
occur in real-time
• Seat inventory is optimised
independently of ancillary
products
Inventory settings re-optimised in near
real-time; enables rapid response to
demand changes
Ability to manage the complete customer
offer, including ancillary recommendations

58
Operational
excellence
Carrie Hurihanganui
Chief Ground Operations Officer

59
Network growth principles can be illustrated by
our preliminary 2020 capacity plan
Jeremy – Can you please design
this chart so it takes up the
majority of the slide? I would
also like to have a background
image for the whole slide that
is blurred, perhaps showing
aircraft on runway?
NOTE - If that looks too messy,
then just go with plain chart.
Our approach to cost control has helped drive strong
CASK performance in recent years

60
Looking ahead we are targeting flat to improving CASK
performance over the next three years
Targeting flat to low single digit
nominal CASK improvement
Indicative CASK trend

61
Next generation engines
(A320/1NEOs)
Strategic supplychain
Fuel burnoptimisation
Cross-functional initiatives in place to improve
efficiencies across the business

62
~4,200 suppliers across all facets of ouroperation
1
Spend excluding labour, fuel, aircraft, air navigation, landing and government agency charges.
~$1.3billion
in annual addressablespend
1
41%
New Zealand
based
59%
Globalbased
Our supply chain is multi-tiered and complex, with
the ability to generate further efficiencies

63
Creation of Supply Chain Centre of
Excellence
Alignment of the value chain
activities across the organisation
Increasing trend of suppliers
helping to drive innovation
Using our vendor relationships to
drive sustainability and traceability
from source
Strategic supply chain partnerships can help
mitigate risk, step change the way we do business
and add value

64
4.38
4.43
4.51
4.55
4.57
4.67
4.86
4.87
4.90
4.94
2010201120122013201420152016201720182019E
Fuel efficiency - ASKs/barrel
~13% improvement
Future fuel efficiency driven by:
• Additional NEO aircraft
• System advances to
optimise flight planning
• Weight reduction initiatives
• Increased ground power
usage
Fuel efficiencies should continue to improve as a
result of investment in modern fleet and
optimisation tools

65
Balancing network growth while maintaining control on overheadcosts
Network capacity(ASKs)Actual overhead costs vs. inflation-adjusted overheadcosts
20182019E20152016201720182019E201520162017
Actual overheadcostsInflation-adjustedoverheads
Continued economies of scale expected from
long-haul flying and overhead reductions
Resulting in a
~25%
reduction
in overhead
costs/ASK
~30% growth
Resulting in a
~25%
reduction
in overhead
costs/ASK

66
Mobilitytools
Automation
Organisationalstructure
Working on several key initiatives to
improve productivity

67
Example: Digitising service
Moving from situations that
require manual processes and
human intervention...

68
Example: Digitising service
...to empowering our
customers to resolve
issues with
personalised channels
Future
state

69
Developing mobile front-end
digital platforms to operational
areas and providingreal-time
flight andpassenger
information
Mobility tools rolled out to
wider Airports workforce to
provide consistency across
allchannels, helping to
deliver world-class customer
and employeeexperience
Front-end digital solution
allowsoperational staff to
meetcustomer needs
seamlessly (e.g. wearables,
mobile printing)
Empowering our people to better serve our customers using
digital tools and data
Example: Phased mobility strategy for operations
202020212022

70
Culture is critical to delivering sustainable cost improvement

71
Financial
priorities
Jeff McDowall
Chief Financial Officer

72
Ensure long termresilience
InvestwiselyReturn excesscash*
• Stable investment grade
rating
• Diverse and attractive
sources of funding
• Ensuring the right level of
liquidity
• Hedging our financialrisks
• Commitment to consistently
pay a sustainable ordinary
dividend
• Excess cash to be returned
to shareholdersvia:
- Share buy back
- Special dividend
* Subject to maintaining financial resilienc e targets
• Disciplined spending on
capex to support growth
- Aircraft ownership
decisions
- Non-aircraft investment
• Pre-tax ROIC target of 15%
We have a capital management framework that is focused on
financial resilience and sustainable shareholder value

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* Bloomberg data as at 1 May2019.
Investment grade creditrating*
Target gearing range of 45% to55%
52.4%
48.6%
51.8%
52.4%
56.4%
Our strong and resilient balance sheet provides the foundation
for a stable investment grade credit rating...
2.0xto 3.3x
target range
Adjusted gross debt
to EBITDA

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0%
1%
2%
3%
4%
5%
20152016201720182019E
Secured
debt
37%
Finance
leases
29%
Unsecured debt
1%
Operating lease @
7x*
33%
As at
1H 2019
* Aircraft operating lease commitments for the next 12 months multiplied by a factor of 7. Excluding short-term leases which provide cover for the 787-9 engine issues.
1
Bloomberg data as at 16 May 2019; USD 6M LIBOR rate year on year movement between 2018 and May 2019.
Debt funding profileAverage cost of on balance sheet debt
Financial year
Increase largely
driven by a ~40%
increase in average
USD base rate
1
...and we have a diverse and flexible debt portfolio with very
attractive funding costs

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Looking to the near term we expect cash levels will remain at
the upper end of our liquidity range
• As communicated last year, we have updated our
liquidity range to target $700 million to $1 billion
cash
−Now transitioning to this target range
−Primary mechanism by which we are moving
towards this target has been via aircraft
purchases
−Balancing the level of cash purchases of fleet
with the current attractive financing rates
−No impact to gearing or net debt levels
−Our fleet financing model provides us with
greater flexibility from a liquidity perspective

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We continue to mitigate some volatility in jet fuel pricing with
our hedge portfolio
• Our hedging policy continues to focus on
providing our business with time to adjust
• In 2019 we also added Singapore Jet
Collars and Jet-Brent crack spreads into
our hedging portfolio
• Currently 2020 is ~50% hedged
80%
69%
42%
~50%
FY20 Q1
Jul-Sept
FY20 Q2
Oct-Dec
FY20 Q3
Jan-Mar
FY20
Fuel hedge position*
(hedged volume as a proportion of estimated consumption)
* Per fuel hedge position at 17 May 2019.

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0
200
400
600
800
1,000
20152016201720182019**202020212022
$ millions
ActualForecast
Financial year
We see a substantial reduction in aircraft capex from 2020 to
2022 compared to recent years
Aircraft capex outlook*
* Per 28 March 2019 disclosure to NZX and ASX; assumes NZD/USD = 0.67, includes progress payments on aircraft. Does not includewidebody replacement aircraft.
** Based on estimate of 2019 aircraft capital expenditure.

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777-200
787-10
Fuel /
Pax
Better
Better
Fuel / Departure
Our selection of the 787-10 aircraft to replace our existing
777-200 fleet will have strong economic benefits...
• Eight 787-10aircraft, powered by GE
engines
• Options to purchase additional aircraft
and substitution rightsprovide flexibility
• Highly fuel-efficient aircraft - has the
potential to save 190,000 tonnes of
carbon each year
• Lower fuel burn drives substantial
improvement in operating economics and
emissions compared to 777-200
~25%
improvement
in fuel burn
compared to
777-200
Fuel burn comparison: 787-10 vs 777-200

79
787-10 programme capex outlook*
Expected aircraftdelivery:
~50%
loweraverage
spend
...and the phasing of this aircraft programme will result in lower
annual aircraft capex levels
* Capital expenditure outlook only represents 787-10 programme.

80
~15%
~10%
How we discuss success with our
people and externalstakeholders
Excellent return
Return that exceeds our
pre-tax cost of capital
Sub-optimal return
We measure success using ROIC as one of our key metrics

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What do we mean by “consistently
pay”and “sustainable”?
Consistently pay
Sustainable
OrdinarydividendSpecialdividend
$2.2 billion in declared
dividends over 14 years
We remain committed to consistently paying a sustainable level
of ordinary dividend...
The Board seeks to distribute
part of the profits in the form
of an ordinary dividend each
year to shareholders
The amount of the ordinary
dividend in a given period,
with the Board’s intent that the
ordinary dividend represents
the medium-term financial
outlook for earnings, gearing
and capex

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Ensure long termresilience
InvestwiselyReturn excesscash*
...while keeping financial resilience and shareholder returns at
the forefront of our minds
• Stable investment grade
rating
• Diverse and attractive
sources of funding
• Ensuring the right level of
liquidity
• Hedging our financialrisks
• Commitment to consistently
pay a sustainable ordinary
dividend
• Excess cash to be returned
to shareholdersvia:
- Share buy back
- Special dividend
* Subject to maintaining financial resilienc e targets
• Disciplined spending on
capex to support growth
- Aircraft ownership
decisions
- Non-aircraft investment
• Pre-tax ROIC target of 15%

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•We are resilient and adaptable, with the ability
to respond quickly to changing macro
conditions
•We have a clearstrategy in place to drive
sustainable cost improvement,earnings
growth and improved ROIC in the lower
demandenvironment
•We are committed to continued investment in our
exceptional culture, to delivering a superior customer
experienceand to making strong commercialreturns
•We are targetingstrong free cash flow generation over the
next three years
Key messages you should take away from today

84
We have the right business model and competitive
advantages to sustain long-term commercial success

85

86
Questions

87
Appendix

88
Speakerbiographies
Christopher Luxon Chief ExecutiveOfficer
Christopher has been Chief Executive Officer since 2013 and under his leadership the airline has
delivered record profits, all time high customer satisfaction scores and achieved its highest levels of
staff engagement. Prior to joining Air New Zealand, Christopher was President and Chief Executive
Officer at Unilever Canada. This was one of several senior leadership roles he held during an 18-
year career at the multinational that saw him work in roles in Europe, North America and Asia/Pacific.
Christopher also serves as Chairman of New Zealand Prime Minister Jacinda Ardern's Business
Advisory Council.
Carrie Hurihanganui Chief Ground OperationsOfficer
Carrie was appointed as Chief Ground Operations Officer in 2018. Carrie is responsible for our
Airports, Engineering & Maintenance and Business Performance team and has deep strategic and
operational experience through her 18 years at Air New Zealand in numerous senior roles, including
General Manager Eagle Air, General Manager Offshore Airports, General Manager Customer
Experience and Group General Manager Regional Airlines & Airline Operations.
Jeff McDowall Chief FinancialOfficer
Jeff joined Air New Zealand in 2000 and was appointed Chief Financial Officer in January 2018.
Prior to this position he held a range of senior commercial and finance roles within Air New Zealand
including Group General Manager Corporate Finance and Group General Manager Commercial.
Prior to joining Air New Zealand, Jeff spent six years as a management consultant in New Zealand,
Singapore and the United States.
Cam Wallace Chief RevenueOfficer
Cam was appointed as Chief Revenue Officer in January 2014 and is responsible for generating
Air New Zealand’s passenger and cargo revenue, currently a portfolio with a turnover of over $5 billion.
His responsibilities include revenue management, global pricing, online sales, Grabaseat™, retail
marketing, corporate, distribution, government sales and contact centres. Cam joined Air New Zealand
in 2001 and has held a number of senior positions in the airline.
Nick Judd Chief Strategy, Networks & AlliancesOfficer
Nick was appointed as the Chief Strategy, Networks and Alliances Officer in October 2017 and leads
Air New Zealand’s Joint Venture Alliance partnerships, the Star Alliance relationship and the
Sustainability and Transformation portfolios. Nick has worked across a number of functions and
regions in the business holding senior roles in Loyalty, Sales and Commercial areas across
Australia, China, America and New Zealand. Prior to joining Air New Zealand in 2003, Nick spent
time in the United Kingdom and Canada in finance roles within the banking and media industries.

89
Available Seat Kilometres (ASKs)Number of seats operated multiplied by the distance flown (capacity)
Cost/ASK (CASK)Operatingexpenses divided by the total ASK for the period
GearingNet Debt / (NetDebt + Equity); Net Debt includes capitalised aircraft operating leases
Net Debt
Interest-bearing liabilities, less bank and short-term deposits, net open derivatives held in relation to interest-
bearing liabilities and interest-bearing assets, plus net aircraft operating lease commitments for the next twelve
months multiplied by a factor of seven (excluding short-term leaseswhich provide cover for Boeing 787-9 engine
issues)
Dividend yield Dividend expressed as a percentage of the share price at a specific point in time or over a specific period
PassengerRevenue/ASK (RASK)Passenger revenuefor the period divided by the total ASK for the period
Pre-TaxReturnon Invested Capital
(ROIC)
EarningsBefore Interest and Taxation (EBIT), and aircraft lease expense divided by three, all divided by the
average Capital Employed (being Net Debt plus Equity) over the period
TotalShareholder Return (TSR)
The movement in share price, and assuming that all dividends are reinvested in shares on the ex-dividend date
throughout the period
The following non-GAAP measures are not audited: CASK, Gearing, Net Debt, RASK, ROIC and TSR.Amounts used within the calculations are derived
where possiblefrom the audited 2018 Group financial statements and theFive Year Statistical Review contained in the 2018 Annual Financial Results. The
non-GAAP measures are used by management and the Board of Directors to assess the underlying financial performance of the Group in order to make
decisions around the allocation of resources.
Glossary of key terms

90
Resources
Contact information
Email: investor@airnz.co.nz
Share registrar: enquiries@linkmarketservices.com
Investor website:www.airnewzealand.co.nz/investor-centre
Monthly traffic updates: www.airnewzealand.co.nz/monthly-operating-data
Quarterly fuel hedging disclosure: www.airnewzealand.co.nz/fuel-hedging-announcements
Corporate governance: www.airnewzealand.co.nz/corporate-governance
Sustainability: https://www.airnewzealand.co.nz/sustainability
Where to find more information about
Air New Zealand
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