Air NZ announces profit of $374 million, maintains dividend

Media release
22 August 2019

Air New Zealand announces earnings before taxation of
$374 million, maintains final dividend

Air New Zealand today announced earnings before taxation for the 2019 financial year of $374 million, compared
to $540 million in the prior period. Net profit after taxation was $270 million and operating cash flow was $986
million.

The result was driven by operating revenue growth of 5.3 percent, which was offset by a $191 million increase
in the price of fuel, as well as a temporary increase in operating costs as the airline sought to improve network
resiliency for its customers in the face of the global Rolls-Royce engine issues.

Shareholders of Air New Zealand will receive a final dividend of 11.0 cents per share, taking the total ordinary
dividends declared for the year to 22.0 cents per share, in-line with the prior year. The dividend will be paid on
18 September, to shareholders on record as at 6 September.

Chairman Tony Carter said the result represents the relentless focus and hard work of more than 12,500 Air
New Zealanders, who have risen to the challenges this financial year has presented.

“While we are disappointed that we did not meet the expectations we first set for ourselves at the start of the
financial year, the fact is we are operating in a different demand environment than we were 12 months ago. To
have achieved a solid result despite these headwinds speaks volumes about the extraordinary dedication and
commitment of our people.

“When we first saw signs that demand was slowing, we took immediate steps to review our network, fleet and
cost base, to position the airline for success in a lower growth environment. While we have made progress, this
work is still ongoing.

“I am very confident in our strategy and our experienced, world-class executive team who are focused on driving
our business back to earnings growth, while ensuring that we maintain the airline’s strong customer-centric
culture.”

Chief Executive Officer Christopher Luxon noted that as the airline navigates a more challenging demand
environment, delivering competitive fares and a superior customer experience remain a top priority.

“While the New Zealand market has seen foreign competitors reduce capacity or withdraw completely this year,
we have continued to grow both domestically and internationally and to adjust our domestic fare structure to
keep New Zealanders connected to each other and the world.

“In a society with rapidly changing customer expectations, we know we need to continue to lift our game. We
invest a huge amount of time understanding what our customers value and how we can improve their
experience, which is why we introduced free Wi-Fi onboard our long-haul flights earlier this year and announced
changes to our Economy product offering. We can’t wait to share some further exciting product developments
and enhancements in the coming months, which we think our customers are going to love.”

Mr Luxon went on to say that as the airline looks to the coming year, it is in a fundamentally strong position and
will target further growth that taps into new pools of demand.

“We were very excited earlier in the year to announce that we would begin flying to Seoul in November 2019. A
new seasonal service from Christchurch to Singapore will begin in December 2019, which will provide greater

choice for visitors and locals alike. We will also launch additional frequency into both Chicago and Taipei, as
these routes continue to outperform our expectations.

“Another important milestone will be the return of our remaining Rolls-Royce engines back into service, which
we are expecting to happen in the coming months. This will enable us to bring further reliability back to our flying
schedule and to utilise our most efficient aircraft in the optimum way.”

Mr Luxon acknowledged that while the outcomes of the business review announced in March will provide some
clear benefits to the airline in the coming year, there were still further cost efficiencies that needed to be realised
following the conclusion of operational and overhead cost reviews.

“We are focused on ensuring that Air New Zealand is fit for the new lower growth environment and part of that
involves identifying ways that we can deliver meaningful, sustainable reductions in our cost base. We know we
already run a tight ship and that any further cost savings will require exponential effort.

“That is why we have selected a respected external consultancy to assist with this process. They can provide
us with an outside perspective and are able to benchmark us to provide a clear understanding of how our
processes compare with global peers.”

Mr Luxon also stated that the airline remains committed to delivering on its sustainability strategy and initiatives.

“We know that sustainability is a critical global issue and we risk losing our social license to operate if we do not
genuinely address climate change. That is why you will see us continue to invest, whether that be further
reducing single use plastic items on board our aircraft or making it easier for our customers to voluntarily offset
their emissions with our FlyNeutral tool.”

The airline will also take delivery of six ATR aircraft and three Airbus A320/321 NEO aircraft in the 2020 financial
year, which will provide continued growth, fuel efficiency and cost benefits on the Tasman and Pacific Islands
network. An additional Boeing 787-9 Dreamliner will also join the fleet this year.

Air New Zealand’s investment grade credit rating and strong operating cash flow have enabled it to continue to
invest in the most innovative, efficient and comfortable aircraft on the market to deliver on its commitment to
grow sustainably. Earlier this year the airline announced that it would replace its fleet of Boeing 777-200 aircraft
with the Boeing 787-10 Dreamliner, subject to shareholder approval in September. These aircraft will start to
be delivered from the 2023 financial year and will be a game changer for the airline, offering a 25 percent
improvement in fuel efficiency.

Outlook

Based upon current market conditions and assuming an average jet fuel price of US$75 per barrel, the airline is
targeting earnings before taxation to be in the range of $350 million to $450 million. This outlook excludes the
impact of the new accounting standard for leases.



Financial Highlights

• Operating revenue of $5.8 billion
• Earnings before taxation of $374 million
• Net profit after taxation of $270 million
• Operating cash flow of $986 million
• Fully imputed final dividend of 11.0 cents per share, resulting in annual ordinary dividends of 22.0 cents
per share


Ends
Issued by Air New Zealand Public Affairs ph +64 21 747 320

---

1

AIR NEW ZEALAND 2019ANNUAL RESULT
2
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.
Forward-looking statements

AIR NEW ZEALAND 2019ANNUAL RESULT
3
Business update
Financial results
Outlook
Q&A
Agenda

AIR NEW ZEALAND 2019ANNUAL RESULT
Businessupdate
ChristopherLuxon
Chief ExecutiveOfficer
4

AIR NEW ZEALAND 2019ANNUAL RESULT
5
• Financial performance reflects significantly
higher fuel prices and a marked change in the
demand growth environment
−Solid revenue and underlying unit cost
performance achieved despite challenges
• On track to deliver meaningful and
sustainable reductions across our cost base
as discussed in our March business review
update
• Further opportunities for improved earnings
growth while ensuring we maintain our award-
winning culture and invest to provide a world-
class travel experience for customers
A resilient business focused on restoring earnings growth and
sustaining our core competitive advantages

AIR NEW ZEALAND 2019ANNUAL RESULT
• Operating revenue $5.8 billion, up 5.3%
• Earnings before taxation $374 million, down 31%
• Net profit after taxation $270 million, down 31%
• Operating cash flow $986 million, down 4.4%
6
2019 financial highlights
$374m($104m)$270m
Earnings before
taxation
Ta xNet profit after
taxation
474
663
527
540
374
20152016201720182019
Earnings before taxation
($ millions)

AIR NEW ZEALAND 2019ANNUAL RESULT
7
A number of factors impacted 2019 performance, and we quickly
responded with both tactical and strategic actions
HeadwindShort-term tactical responseLonger-term strategy
Increased fuel price
Network capacity adjustments and
targeted fare increases
Fuel hedging that provides business time
to adjust
Investment in young and fuel
efficient fleet
Aircraft weight reduction
programmes
Flight path optimisation
Network disruption resulting
from the global Rolls-Royce
Trent engine issues
Procured 3 dry-lease aircraft
Investment in short-term operational
resiliency to mitigate customer disruption
As disruption alleviates, focused on
driving inefficiencies out of the cost
base (e.g. greater stability of
rostering to optimise labour)
Slowing inbound tourism and
domestic leisure demand
Domestic fare restructure
Immediate capacity reductions across
select network routes
Ongoing focus on network
optimisation and cost efficiencies
using principles from the March
business review

AIR NEW ZEALAND 2019ANNUAL RESULT
8
Progressing on ~$60 million of cost initiatives over the next two years
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
Maintainorconstraingrowth
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
Status of cost programme
Business review principles
1
Removal of inefficiencies associated
with the Rolls-Royce engine issues
(delivered in 2020)
2
~5% reduction in overheads through
reprioritisation, process efficiencies
and automation
(delivered in 2020 & 2021)
3
A targeted review of the operations
cost base
(delivered in 2020 & 2021)

AIR NEW ZEALAND 2019ANNUAL RESULT
9
Sector
2019 RASK vs.
revised expectations
(from Feb 2019)
DomesticMarginally stronger
Tasman Marginally stronger
Pacific Islands
2
Stronger
AsiaIn-line
Americas/EuropeMarginally stronger
CargoSofter
1
Year-on-year movement in RASK.
2
Pacific Islands includes Bali and Honolulu.
Q4 network and pricing adjustments drove better momentum in our
2H performance
ASK
growth:
1.9%
5.2%
5.5%
3.1%
Revenue
growth:
4.9%6.7%
6.2%
4.7%
1.8%
(0.2%)
(1.1%)
2.1%
Q1 2019Q2 2019Q3 2019Q4 2019
Group RASK
1
(excl. FX)

AIR NEW ZEALAND 2019ANNUAL RESULT
Current forward booking forecasts support stable demand across most
markets, however we remain cautious about the economic environment
10
Sector
Forward bookings vs 2H 2019
performance
Domestic
Slight improvement on 2H 2019 with
strong RASK growth expected
Tasman
Increased competitive activity on some sectors
Pacific Islands
1
Similar to 2H, with reduced market capacity due to
competitor MAX-8 issues
Asia
Similar to 2H with solid performance on second daily
Singapore service and Taipei offsetting China softness
Americas/Europe
Softer Q1 as outbound traffic impacted by weaker FX;
peak season bookings showing good momentum
Cargo
Similar to 2H with challenged global freight industry
1
Pacific Islands includes Bali and Honolulu.

AIR NEW ZEALAND 2019ANNUAL RESULT
Financial
results
Jeff McDowall
Chief Financial Officer
11

AIR NEW ZEALAND 2019ANNUAL RESULT
12
Revenue
•Passenger revenue excluding FX up 4.6%; reported up 5.6%
–Strong demand up 5.2% oncapacity growth of 4.0%
–RASK excluding FX up 0.6%; reported up 1.6%
•Cargo revenue excluding FX down 1.8%; reported up 0.8%
Cost
•CASK
1
improvement of 1.2%
−Reported CASK including impact of fuel price up 5.4%
•Economies of scale and efficiencies contributed $113 million to profitability
•Fuel cost excluding FX up $209 million, or 21%
2
driven by:
–Average fuel price increase (net of hedging) of $191 million, up 19%
–Additional volume of $18 million reflects capacity growth, partially offset by
aircraft efficiencies
Solid growth in revenue offset by higher fuel and operating costs
1
Excluding fuel price movement, foreign exchange, temporary impact from global Rolls-Royce engine issues and third party maintenance.
2
Fuel cost movement details provided in supplementary slides.

AIR NEW ZEALAND 2019ANNUAL RESULT
10.00
9.49
(0.28)
0.17
0.09
0.02
0.43
0.08
7
8
9
10
2018 CASKECONOMIES OF
SCALE AND
EFFICIENCIES
PRICEIMPACT OF
ROLLS-ROYCE
ENGINE ISSUES
THIRD PARTY
MAINTENANCE
FUEL PRICEFO REIGN
EXCHANGE
2019 CASK
CASK (cents)
* Excluding fuel price movement, foreign exchange, temporary impact from global Rolls-Royce engine issues and third party maintenance.
1
The 2018 CASK has been restated to reflect the impact of NZ IFRS 15.
Strong focus and improved operational conditions in 2H drove
underlying CASK performance
13
• CASK*improved 1.2%
–Reported CASK increased 5.4%, driven by average fuel price increases of 19%, FX, temporary impact of global
Rolls-Royce engine issues and higher costs related to third party maintenance
•$113 million of efficiencies from cost saving initiatives and economies of scale
CASK
Improved 1.2%
1

AIR NEW ZEALAND 2019ANNUAL RESULT
9.75
10. 00
10. 25
10. 50
10. 75
20152016201720182019
5 Year CASK* trend
14
Five years of consistent underlying CASK improvement
~6%
* Excluding fuel price movement, foreign exchange, temporary impact from global Rolls-Royce engine issues and third party maintenance.
Improvement in
CASK* trend

AIR NEW ZEALAND 2019ANNUAL RESULT
15
• Operating cash flow $986 million, down 4.4%,
reflecting:
−Reduction in cash operating earnings, offset
by strong working capital cash flow
−Timing of cash tax payments
• Cash on hand of $1.1 billion, down 21% from
June 2018
−Nearing previously communicated target
liquidity range of $700 million to $1 billion
−Expect to remain towards top-end of liquidity
range in the near-term
Continued strength in operating cash flow
1,100
1,074
904
1,031
986
20152016201720182019
Operating cash flow
($ millions)

AIR NEW ZEALAND 2019ANNUAL RESULT
16
•Gearing was 54.6%, increasing 2.2 percentage points
from June 2018
−Driven by continued investment in the fleet
•Stable outlook Baa2rating from Moody’s
•Fully imputed final dividend of 11.0cents per share
−Bringing the full year fully imputed ordinary dividend
to 22.0cents per share, in-line with last year
−Looking through short-term earnings volatility to
consistently pay a sustainable ordinary dividend
Balance sheet remains resilient
52.4
48.6
51.8
52.4
54.6
20152016201720182019
Gearing (%)
(including capitalised aircraft operating leases)
16.0
20.0
21.0
22.0
22.0
20152016201720182019
Ordinary dividends declared
(cents per share)
InterimFinal

AIR NEW ZEALAND 2019ANNUAL RESULT
17
• Forecast investment of $1.9 billion in aircraft
and associated assets through to 2023
• Assumes NZD/USD = 0.65
• Forecast amounts includes progress payments
related to Boeing 787-10 programme**
–~$2.5 billion programme consisting of 8 aircraft with
deliveries expected from 2023 to 2028
* Includes progress payments on aircraft.
** Subject to shareholder approval.
** Does not reflect two additional A321 NEO aircraft on order for expected delivery in FY2024.
Stable fleet investment profile over the next four years
Aircraftdelivery schedule(as at 30 June 2019)
Number in
existing fleet
Number
on order
DeliveryDates (financial year)
2020202120222023
Owned fleet on order
Boeing 787-10
-1***---1
Airbus A320/A321 NEOs
49***234-
ATR72-600
227 61--
Operating leased aircraft
Boeing 787-9
111---
Airbus A320/A321 NEOs
411---
*** Does not reflect two additional A321 NEO aircraft or seven Boeing 787-10 aircraft on order for expected delivery from 2024.
Actual and forecast aircraft capital expenditure*
0
200
400
600
800
1,000
201520162017201820192020202120222023
$ millions
ActualForecast

AIR NEW ZEALAND 2019ANNUAL RESULT
1,100
1,150
1,200
1,250
1,300
1,350
1,400
1,450
$65.0$67.5$70.0$72.5$75.0$77.5$80.0$82.5$85.0
NZD Cost of Fuel (millions)
Singapore Jet (USD/barrel)
2020 Fuel cost** sensitivity
18
Fuel hedging
•Assuming average jet fuel price of US$75
per barrel for 2020, fuel cost would be
~$1.3 billion
•2020 hedges cover64% of consumption
–1H 2020 is 83% of consumption
–2H 2020 is 45%of consumption
* Based on fuel hedging disclosure as at 13 August 2019.
** Assumes NZD/USD rate of 0.65.
Hedging*
Foreign exchange hedging
•US dollar is ~74% hedged for 2020 at 0.6732

AIR NEW ZEALAND 2019ANNUAL RESULT
Outlook
Christopher Luxon
Chief Executive Officer
19

AIR NEW ZEALAND 2019ANNUAL RESULT
20
2020 capacity plan focused on stimulating demand
from new markets
1
Pacific Islands includes Bali and Honolulu.
~+4% to 5%
Long-haul
New Routes
Domestic
Long-haul
Existing Routes
Tasman &
Pacific Islands
1
2020 Group
Capacity Growth
Domestic
• 2% to 3% capacity reduction
• Driven by targeted off-peak leisure
reductions
Tasman and Pacific Islands
1
• 2% to 3% capacity growth
• Tasman driving growth with up-
gauging of A321NEOs
• Pacific Islands expected to contract
slightly
Long-haul
• 7% to 8% capacity growth driven by
new markets
• Asia growth from additional
frequency to Taipei and Singapore,
and launch of Seoul; partially offset
by minor reductions in Japan
• Marginal growth in Americas and
Europe as increased frequency to
Chicago is partially offset by
measured reductions in other North
American ports

AIR NEW ZEALAND 2019ANNUAL RESULT
21
2020 outlook
Based upon current market demand and assuming an average jet fuel
price of US$75 per barrel, the airline is targeting earnings before taxation
to be in the range of $350 million to $450 million. This outlook excludes
the impact of the new accounting standard for leases (IFRS 16).

AIR NEW ZEALAND 2019ANNUAL RESULT
22
We have built the right team, business model and competitive
advantages to sustain long-term commercial success
World-class
Executive
Team
Customer
loyalty, driven
by strength of our
Domestic network
and Airpoints
™
programme
Our alliance-driven
Pacific Rim network
Our brand and Kiwi
service culture
Our simplified
and fuel efficient
fleet, with the ideal
cost structure for
the New Zealand
market

AIR NEW ZEALAND 2019ANNUAL RESULT

AIR NEW ZEALAND 2019ANNUAL RESULT
Supplementary
information
24

AIR NEW ZEALAND 2019ANNUAL RESULT
25
Adoption of IFRS 16
Statement of Financial Performance
•Lease costs previously recognised as
operating lease rental expense in the
Statement of Financial Performance will
be recognised within depreciation and
interest expense going forward
Statement of Financial Position
(transitional adjustments as at 1 July 2019)
•Operating lease liabilities will be
capitalised on the balance sheet at the
present value of the contractual lease
payments
•Impact of IFRS 16 on the Statement of
Financial Position is detailed in Note 25
of the 2019 Group Financial Statements
Statement of Cash Flows
•Principal portions of lease payments
will be reclassified from operating
activities to financing activities within
the Statement of Cash Flows.
•The interest portion will be
presented within operating activities
Estimated IFRS 16 impact *
*A reconciliation of the impact of IFRS 16 will be provided in the 2020 Interim Results.
2020 Earnings
before taxation:
(~$10M)
Adverse impact
no net
impact
Opening position of
Lease Liabilities:
+~$862M

AIR NEW ZEALAND 2019ANNUAL RESULT
Changes in profitability waterfall
26
1
Excludes FX of $75 million. For further details refer to Fuel Cost Movement slide 27.
Additional commentary
•Labour cost increase of 4.3%, is
slightly above capacity growth
for the year, driven by activity
and rate increases and crew and
operational inefficiencies
partially offset by reduced
incentive payments
•Maintenance, aircraft operations
and passenger services costs
reflect 4.0% capacity growth,
pricing increases and third party
maintenance activity
•Sales and marketing increase
related to launching new
Chicago and Taipei routes and
higher commissions
•Ownership costs increased due
to new aircraft deliveries offset
by lower funding costs

AIR NEW ZEALAND 2019ANNUAL RESULT
27
Increase in
jet fuel price
US$75 to US$82
per barrel
June 2019
hedge loss of
$5m
vs
June 2018
hedge
gain of $76m
$191 million
effective increase
in fuel price
19%
Fuel cost movement
987
18
110
81
75
1,271
0
200
400
600
800
1,000
1,200
1,400
2018
FUEL COST
VOLUMEUNDERLYING
PRICE
NET HEDGING
IMPACT
FX
MOVEMENTS
2019
FUEL COST
$ millions

AIR NEW ZEALAND 2019ANNUAL RESULT
28
• Volumes down overall driven by:
–A good performance in the first half of the year was
offset by a slowdown in the global cargo market in the
second half
–Load factors declined across most sectors with
geopolitical uncertainty driving aggressive competition,
pricing and plays for market share
• Yield declines driven by:
–Intense competition, particularly on the Tasman
–Offset by improved yields in Asia due to higher value
product mix
Solid growth in the first half of 2019, offset by challenges in the
global cargo market in the second half
Revenue
down
1.8%*
Yield
down
0.5%
Volume
down
1.3%
* Reported Cargo revenue increased 0.8%, inclusive of foreign exchange impact.

AIR NEW ZEALAND 2019ANNUAL RESULT
29
2019 performance relative to our financial framework
1
Excluding fuel price movement, foreign exchange, temporary impact from global Rolls-Royce engine issues and third party maintenance.

AIR NEW ZEALAND 2019ANNUAL RESULT
1
The comparative 2018 number has been restated as a result of the adoption of NZ IFRS 15, the new revenue recognition standard. For further information pleas e
refer to Note 25 of the 2019 Group Financial Statements.
* Dividends are fully imputed.
Jun 2019
$M
Jun 2018
$M
Movement
$M
Movement
%
Operating revenue 5,7855,495
1
2905.3%
Earnings before taxation374540(166)(31%)
Net profit after taxation 270390(120)(31%)
Operating cash flow 9861,031(45)
(4.4%)
Cash position1,0551,343(288)(21%)
Gearing54.6%52.4%-(2.2pts)
Ordinary dividends declared*22.0 cps22.0 cps--
Financial overview
30

AIR NEW ZEALAND 2019ANNUAL RESULT
Jun 2019Jun 2018Movement*
Passengers carried (‘000s)17,73816,966
4.5%
Available seat kilometres (ASKs, millions)46,02944,274
4.0%
Revenue passenger kilometres (RPKs, millions)38,57336,662
5.2%
Load factor83.8%82.8%
1.0pts
Passengerrevenue per ASKs as reported
(RASK, cents)
10.810.6
1.6%
Passengerrevenue per ASKs, excluding FX
(RASK, cents)
10.710.6
0.6%
Group performance metrics
31
* Calculation based on numbers before rounding.

AIR NEW ZEALAND 2019ANNUAL RESULT
Domestic
Jun 2019Jun 2018Movement*
Passengers carried (‘000s)11,51311,089
3.8%
Available seat kilometres (ASKs, millions)7,1046,905
2.9%
Revenue passenger kilometres (RPKs, millions)5,9575,719
4.1%
Load factor83.9%82.8%
1.1pts
Passengerrevenue per ASKs as reported
(RASK, cents)
22.522.0
2.1%
Passengerrevenue per ASKs, excluding FX
(RASK, cents)
22.422.0
1.7%
* Calculation based on numbers before rounding.
32

AIR NEW ZEALAND 2019ANNUAL RESULT
33
* Calculation based on numbers before rounding.
1
Pacific Islands including Bali and Hawaii.
Tasman & Pacific Islands
1
Jun 2019Jun 2018Movement*
Passengers carried (‘000s)4,0443,7986.5%
Available seat kilometres (ASKs, millions)13,64012,9635.2%
Revenue passenger kilometres (RPKs, millions)11,19510,5845.8%
Load factor82.1%81.6%0.5pts
Passengerrevenue per ASKs as reported
(RASK, cents)
9.69.6(0.1%)
Passengerrevenue per ASKs, excluding FX
(RASK, cents)
9.69.6(0.3%)

AIR NEW ZEALAND 2019ANNUAL RESULT
34
International
Jun 2019Jun 2018Movement*
Passengers carried (‘000s)2,1812,0794.9%
Available seat kilometres (ASKs, millions)25,28524,4063.6%
Revenue passenger kilometres (RPKs, millions)21,42120,3595.2%
Load factor84.7%83.4%1.3pts
Passengerrevenue per ASKs as reported
(RASK, cents)
8.17.92.7%
Passengerrevenue per ASKs, excluding FX
(RASK, cents)
7.97.90.7%
* Calculation based on numbers before rounding.

AIR NEW ZEALAND 2019ANNUAL RESULT
35
Projected aircraft in service and fleet age
*
Excludes short-term leases which provide cover for the global Rolls-Royc e engine issues.
** Actual aircraft in service.
7.8
7.5
7.0
7.5
7.1
7.1
7.6
8.0
20152016201720182019202020212022
Aircraft fleet age in years
(seat weighted)
HistoricalForecast
*
*
2019202020212022
Boeing 777-300ER
7
777
Boeing 777-200ER
8888
Boeing 787-913141414
Airbus A32025222016
Airbus A320/A321 NEO8111418
ATR 72-500/60029
282929
Bombardier Q30023232323
Total Fleet113113115115
*
*
**

AIR NEW ZEALAND 2019ANNUAL RESULT
36
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
4
Narrow-body
12 A320/A321s
Turbo-prop
23 Q300s
two ATR72-600s
* Does not include one for one replacement aircraft.
• Purchase growth units
• Incremental operating leases
• Use purchase rights and
options for growth units
FY21
two 777-300ERs
two A320 domestics
36

AIR NEW ZEALAND 2019ANNUAL RESULT
0
100
200
300
400
500
600
700
800
900
1,000
202020212022202320242025202620272028
$ millions
787-10 programme capex outlook
Expected aircraftdelivery:
~50%
loweraverage
spend
Recently announced widebody aircraft programme reflects
phased delivery of 8 aircraft over 6 years
37

AIR NEW ZEALAND 2019ANNUAL RESULT
Key financial metrics
38
4,925
5,231
5,109
5,495
5,785
20152016201720182019
Operating revenue
($ millions)
474
663
527
540
374
20152016201720182019
Earnings before taxation
($ millions)
1,100
1,074
904
1,031
986
20152016201720182019
Operating cash flow
($ millions)
52.4
48.6
51.8
52.4
54.6
20152016201720182019
Gearing (%)
(including capitalisedaircraft
operating leases)
1,321
1,594
1,369
1,343
1,055
20152016201720182019
Cash on hand
($ millions)
16.0
20.0
21.0
22.0 22.0
20152016201720182019
Ordinary dividends declared
(cents per share)
InterimFinal

AIR NEW ZEALAND 2019ANNUAL RESULT
Jun 2019
$M
Jun 2018
$M
Referencein 2019 Annual
Financial Results
Earnings beforetaxation374540
Statement of Financial Performanc e (page 2)
Add back: Net financecosts3133
Statement of Financial Performanc e (page 2)
Add back: Implied interest in operating leases
1
6157
Note 19 – Operating Leas es (page 25)(refer to
aircraft value within Rental and lease expens es
recognised in earnings)
EBIT adjusted for operating lease interest466630
Net debt(including off-balance sheet items)2,5172,399
Historical Summary of Debt (page 48)
Equity 2,0892,176
Statement of Financial Position (page 5)
Total capital employed4,6064,575
Average capital employed
2
4,5914,347
Pre-Tax Return on InvestedCapital10.2%14.5%
Pre-tax ROIC calculation
1
Represents the implied interest included in the aircraft operating lease expense within the Statement of Financial Performance; one-third of aircraft operating
lease expens e is assumed to be interest expens e.
2
Calculation of 2018 Average Capital Employed includes 2017 Total Capital Employed of $4,119 million.
39

AIR NEW ZEALAND 2019ANNUAL RESULT
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 leases, which provide cover for Boeing 787-9 engine
issues)
Passenger Load FactorRPKs as a percentage of ASKs
PassengerRevenue/ASK (RASK)Passenger revenuefor the period divided by the total ASK for the period
Pre-TaxReturn on Invested Capital
(ROIC)
Earnings before 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
Revenue Passenger Kilometres
(RPKs)
Number of revenue passengers carried multiplied by the distance flown (demand)
The following non-GAAP measures are not audited: CASK,Gearing, Net Debt, RASK and ROIC.Amounts used within the calculations are derived from
the audited Group financial statements and FiveYear Statistical Review contained in the 2019 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
40

AIR NEW ZEALAND 2019ANNUAL RESULT
About
Air New Zealand
41

AIR NEW ZEALAND 2019ANNUAL RESULT
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
15%
Annualised shareholder
return over the past 10 years
16
Years of consecutive
profitability
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
attractiveemployerfor
the third consecutive year
Winner
2019 Eco-Airline of the year
Air New Zealand at a glance
1
Includes Seoul route which commences late November 2019.
42

AIR NEW ZEALAND 2019ANNUAL RESULT
5.0
5.0
8.5
6.5
7.0
5.5
5.5
8.0
16.0
21.0
22.0
22.0
18.0
20.0
45.0
200520062007200820092010201120122013201420152016201720182019
Ordinary dividendSpecial dividend
of consecutive profitability
Air New Zealand has
achieved profitability
and dividends
through the cycle
16
years
of consecutive dividends
14
years
43
166166
180
96
221
218
21
82
81
71
181
263
327
463
382
390
270
20032004200520062007200820092010201120122013201420152016201720182019
Net profit after tax
($ millions)
Dividends declared
(cents per share)

AIR NEW ZEALAND 2019ANNUAL RESULT
44
~15%
~10%
Return that exceeds our
pre-tax cost of capital
Excellent return
Sub-optimal return
Putting ROIC
performance into
perspective
14%
16%
19%
15%
14%
10%
201420152016201720182019
Pre-tax ROIC

AIR NEW ZEALAND 2019ANNUAL RESULT
Ensure long-termresilience
InvestwiselyReturn excesscash*
Capital management framework
• 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%
45

AIR NEW ZEALAND 2019ANNUAL RESULT
New Zealand
Government
52%
New Zealand
institutional
investors
6%
International
institutional
investors
38%
Retail investors
4%
46
Trading and ownership structure
•Dual-listed on the NZX and ASX stock exchanges
•1 million average daily trading volume
•Member of the NZX20 index – includes the 20
largest and most liquid companies of the NZX
•New Zealand Government holds 52%
–No direct Board representation
•Seven independent Directors
Share register
(as at 30 June 2019)
AIR
NXZ stock ticker
AIZ
ASX stock ticker
ANZFY
US OTC stock ticker

AIR NEW ZEALAND 2019ANNUAL RESULT
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
Find more information about Air New Zealand
47

AIR NEW ZEALAND 2019ANNUAL RESULT

---

#CrazyAboutRugby

2
AIR NEW ZEALAND ANNUAL SHAREHOLDER REVIEW 2019
Air New Zealand at a glance
1
Includes Seoul route which commences late November 2019.
Operational
79
years in operation
32
international destinations
1
20
domestic destinations
Pacific
Rim
focused network driven by
alliance relationships
~12 ,500
Air New Zealand employees
based globally
Financial
Baa2
investment grade credit rating
from Moody’s
15%
annualised shareholder return
over the past 10 years
8%
average dividend yield
over the past 10 years
14
years of consecutive
dividend distributions
16
years of consecutive
profitability

AT A GLANCE
|
CONTENTS
AIR NEW ZEALAND GROUP
3
Community
#1
corporate reputation in New Zealand
for 5 consecutive years
#1
corporate reputation in Australia
for 3 consecutive years
#1
New Zealand’s most attractive
employer for the third
consecutive year
Winner
2019 Eco-Airline of the year
Gender, Accessibility and Rainbow
tick accreditation achieved
Contents
04
Letter from the Chairman
06
Letter from the Chief
Executive Officer
09
Our year in the air
10
Safety as a
shared value
12
Keeping our customers
at the core
14
A truly New Zealand
company
16
Our partnership with
New Zealand Rugby
18
Financial
commentary
20
Change in
profitability
21
Financial
summary
23
Key financial
information

4
AIR NEW ZEALAND ANNUAL SHAREHOLDER REVIEW 2019
Letter from the Chairman
As we all know, the airline industry
can change at pace.
Earlier this year, Air New Zealand highlighted that we
were observing a slowdown in the rate of demand growth,
particularly in our domestic leisure segment and to a lesser
extent in inbound tourism growth to New Zealand. This
news followed a challenging first half, which saw the impact
of substantially higher fuel prices and network disruption
related to the global Rolls-Royce engine issues that power the
majority of our Boeing 787-9 fleet.
Our airline is incredibly agile and nimble, with an outstanding
Executive team as well as a strong investment grade balance
sheet, which means that we have the resources to quickly
adapt to these challenges and turn these into opportunities
for the future.
Following the revised outlook that we provided due to the
change in demand environment, we immediately set ourselves
on a path to review our network, fleet and cost base to ensure
that our business is well positioned to be profitable and resilient
in this new, lower growth environment.
As a result of this review, we announced in late March that we
would be moderating our medium-term capacity growth outlook
to three to five percent per annum (from a prior growth plan of
five to seven percent), deferring $750 million of fleet investments
and implementing a two-year cost reduction programme.
To demonstrate our continued commitment to ensuring an
industry-leading customer proposition, we have announced
additional investment in our long-haul inflight product over the
next twelve months, such as an enhanced Business Premier™
experience and introduction of a new and more spacious
Economy product. In March we also began offering free Wi-Fi
on all enabled international aircraft to keep our customers
better connected while they travel.
These actions will set us up well for the future, and you can
expect both the Board and the Executive team will continue to
focus on opportunities to improve returns, while ensuring we stay
true to our culture and our commitment to provide a world-class
travel experience for our customers.
We know this year has been difficult at times and that a huge part
of the reason we were able to navigate the challenges presented
is due to our incredible people and the fact that they are always
willing to go the extra mile to deliver for our customers. This has
never been more true than in the past 18 months and I would like
to thank our team of over 12,500 Air New Zealanders for their
commitment and dedication.
Turning to the 2019 financial result, earnings before taxation
were $374 million for the year, representing a decline of 31
percent from the prior year. High levels of passenger revenue
growth in the first half of the year moderated into the second
half, driving annual operating revenue growth of five percent.
Growth came from our launch into exciting new markets
such as Chicago and Taipei, the expansion of our trans-
Tasman capacity following the end of an alliance partnership,
additional frequency into Singapore and overall growth in our
domestic market.
Operating costs increased at a faster rate than revenue growth,
driven by a 19 percent rise in fuel price as well as additional
costs associated with providing operational resiliency across
our network. Ownership costs also grew seven percent,
reflecting our continued acquisition of modern and fuel-
efficient aircraft. Air New Zealand continues to focus on
reducing operating costs in a sustainable manner. This year
efficiencies from cost saving initiatives and economies of scale
contributed $113 million to the result.
The Company’s balance sheet remains strong with gearing of
54.6 percent, which is within the target range of 45 to 55 percent
despite a year with substantial aircraft investment. Air New
Zealand also continues to maintain a stable investment grade
credit rating of Baa2 from Moody’s.
The Board’s intention is to consistently pay a sustainable level
of ordinary dividend and we are very proud of the fact that
we have been able to pay over $2.3 billion in dividends over
the past 14 years. Despite the current slowdown in demand
growth, after considering the Company’s balance sheet
$
5.8
billion
Operating
revenue
$
3 74
million
Earnings
before taxation
$
986
million
Operating
cash flow
11.0
cents per share
Final ordinary
dividend

AIR NEW ZEALAND GROUP
5
strength, future capital commitments and expectations of
future financial performance, the Board is pleased to declare a
fully imputed final dividend of 11.0 cents per share. This brings
the total ordinary dividend for the 2019 financial year to 22.0
cents per share, consistent with the prior year.
Also reflecting the underlying strength of our business,
operating cash flow performance was robust at $986 million
and cash at hand at the end of the year was $1.1 billion.
Based upon current market conditions and assuming an
average jet fuel price of US$75 per barrel, the airline is
targeting earnings before taxation to be in the range of
$350 million to $450 million. This outlook excludes the
impact of the new accounting standard for leases.
This is the last results announcement for our Chief Executive
Officer Christopher Luxon before he departs at the end of
September and I would like to take this opportunity to thank
him for the significant contribution he has made and the
achievements he has had during his tenure.
Not only has the airline experienced a period of enhanced
profitability and strong dividends, but we have also launched
several exciting new routes and had record customer
satisfaction and staff engagement over this time. I would
also like to call out the profound impact that Christopher
has had on Air New Zealand’s culture, including bringing
together a world-class Executive Team, introducing
leadership development programmes, driving High
Performance Engagement with our union partners and
lifting our commitment to diversity and inclusion. All of this
has seen Air New Zealand regularly voted as the best place
to work in the country and I have no doubt that this is due
to Christopher’s drive and passion for people.
As the outgoing Chairman of your Board of Directors,
I feel very privileged to have served this exceptional and
truly iconic New Zealand company for the past nine years.
At next month’s 2019 Annual Shareholders’ Meeting
and with your support, Dame Therese Walsh will succeed
me as Air New Zealand’s Chairman. As I mentioned in my
letter last year, Dame Therese is a highly experienced
and incredibly commercial leader and will be our first
female Chairman. I have no doubt that she will be an
outstanding Chairman and that alongside the rest of our
highly skilled Board, the future of Air New Zealand is in
very capable hands.
I am immensely proud of all that we have managed to
achieve, and I wish Dame Therese, the Board and the more
than 12,500 Air New Zealanders that make our company so
unique, all the very best for the future.

To n y C a r t e r
Chairman
22 August 2019
Note from Dame Therese Walsh, Chairman elect
Air New Zealand is such a unique company in that it touches the
lives of so many New Zealanders and its fortunes are so deeply
intertwined with that of our nation’s.
This is one of the reasons why it is humbling for me to be seeking
shareholder support for my re-election in September, to take on the
role of Chairman. The role has been exceptionally stewarded by Tony
Carter for the past six years, and I look forward to acknowledging

his leadership at the 2019 Annual Shareholders’ Meeting.
Having held Executive and Board roles with a range of companies
and institutions, one thing that my experience has taught me is that
to succeed over the long-term you need to be hugely customer-
centric, incredibly agile and not afraid to be a leader in the areas

that matter most. Air New Zealand is certainly a company that
embodies this philosophy.
Our business is built on a strong foundation of key competitive
advantages that will continue to serve us well in the coming
years. We have an iconic brand, supported by a uniquely Kiwi
service culture. Our domestic network and customer offering are
unmatched, driving extremely high levels of loyalty. Deep revenue-
sharing alliances help support our international offering, which is
based on strong growth markets across the Pacific Rim. Finally,
our simplified and fuel-efficient fleet provides us with the ideal cost
structure for the New Zealand market.
While these advantages have allowed us to deliver strong results
across key financial, customer, employee and social metrics over
the years, as we approach the 80th anniversary of our airline I am
reminded that we cannot be complacent. Our ongoing success will
require us to continually future proof those advantages to reflect

the changing landscape.
We know that we operate in an industry that is dynamic, from next
generation aircraft technologies, to connecting with customers in
new and different ways, and evolving thought leadership on reducing
carbon emissions. Change is not something that we should shy away
from or be fearful of. It challenges us to be agile, to be innovative and
most importantly to be extremely customer focused.
Speaking on behalf of the Board of Directors and our Executive team,
we do not take our position as one of the world’s leading airlines
for granted. We will continue to pursue profitable opportunities,
invest in our products and our culture, and defend our competitive
advantages to secure the best possible outcome for our customers,
our people, our investors and our nation.
I look forward to seeking your support for my re-election in
September, serving as your Chairman and taking this iconic

Kiwi company to new heights.
Ngā mihi.
Dame Therese Walsh
Chairman elect
22 August 2019
11.0
cents per share
Final ordinary
dividend
LETTER FROM THE CHAIRMAN

6
AIR NEW ZEALAND ANNUAL SHAREHOLDER REVIEW 2019
Letter from the Chief
Executive Officer
Air New Zealand is truly unlike any
other company I have ever worked for.
Our customer centricity, commercial
focus, operational integrity and
social ethos make us one of the most
inspirational airlines in the world and

I could not be prouder to have been
at the helm of this iconic company for
the last seven years.
I have often remarked that what differentiates Air New Zealand
from many of our airline peers is our ability to be nimble and
adjust quickly to changing external dynamics. As we navigated
a more challenging business environment in 2019 and enter into
a new financial year, that sentiment has proven true yet again.
The 2019 financial result of $374 million in earnings before
taxation reflects a significant fuel price headwind of $191
million, the temporary impact of the global Rolls-Royce engine
issues on some of our operational costs and as we observed
in the second half of the financial year, slowing demand growth.
While these issues are certainly challenging and reflect some
of the uncontrollable factors that make aviation so dynamic,
our people are extremely skilled at responding to these factors
by adjusting various levers within our business. The dedication,
ingenuity and drive of our team truly sets us apart from other
companies and is a key reason why our customer satisfaction
levels continue to be at all-time highs.
For example, our response to the global Rolls-Royce engine
issues was decisive – our priority was to ensure as much
schedule resilience as possible for our customers. We were able
to quickly procure leased aircraft, which was hugely important
as this issue has impacted approximately 40 percent of the
global Boeing 787-9 fleet. We also increased staffing at the
airports and at our call centres to help manage the higher level
of customer enquiries. Although we are still managing the issue
today, we expect to be operating all of our Boeing 787-9 aircraft
later this year, thereby reducing some of the inefficiencies we
saw in our 2019 cost base.

Turning to the demand environment, in January our forward
bookings data indicated that a moderation of growth from
both a slower inbound tourism market, as well as domestic
leisure travel would impact our expected revenue performance.
To put this into context, in recent years Air New Zealand has
experienced strong demand growth across our network, which
combined with growth into new and existing markets, drove
revenue growth of up to 10 percent per annum. Although we are
still anticipating solid growth as we look to the year ahead, we
expect it will be at a lower level than in prior years.
While we were one of the first New Zealand companies to
describe the slowing growth environment, in subsequent
months a number of other businesses have echoed our
sentiments and the Reserve Bank of New Zealand lowered the
official cash rate in May and again in August.
Our business is uniquely positioned to observe changing
demand trends due to our forward bookings profile, and while
we have not seen any further downward shift, we are taking the
necessary steps to adjust our business.
Those changes were announced as part of a broader business
review in late March and includes network adjustments, fleet
deferrals, initiatives to sustainably reduce our cost base and
continued investment into the customer experience. We
also overhauled our domestic network fares, to make travel
more affordable and further supercharge domestic tourism,
specifically to regional New Zealand.
Following the outcome of that business review, we are focused
on ensuring Air New Zealand’s cost structure is well positioned
to support a strong earnings profile in a lower growth
environment. We are well-known for our strong approach to
costs, but I believe that we can always consider different ways
of working to drive continuous improvement. While that work
is still in progress, we expect to communicate outcomes in the
coming months.
Being able to adapt does not mean that we are changing our
strategy or the core priorities that make Air New Zealand a
truly iconic company. While both the Board and the Executive
team continue to drive opportunities that will return Air New
Zealand to sustainable earnings growth, we remain vigilant
in protecting our strong culture and further enhancing the
customer travel experience.
We have an incredibly strong brand, our core domestic
business has unrivalled market share and our alliance driven
Pacific Rim network has allowed us to effectively grow and
diversify our revenue across a number of key markets. Our
powerful Airpoints™ loyalty programme has over 3.2 million
members and continues to drive customer engagement.
Importantly, we also believe that there are still profitable
network growth opportunities for us to pursue.
Ensuring our competitive advantages are sustained for the
future requires commitment and we have not shied away from
investing in our long-term customer proposition.
For example, we made the incredibly exciting announcement
earlier in June that we would replace our current fleet of Boeing
777-200 aircraft with the Boeing 787-10 Dreamliner powered
by GE Aviation GEnx-1B engines, which will start to be delivered
from the 2023 financial year, subject to shareholder approval
in September. This multi-billion dollar investment will

LETTER FROM THE CHIEF EXECUTIVE OFFICER
AIR NEW ZEALAND GROUP
7
be a game changer for our airline, offering a 25 percent
improvement in fuel efficiency. This creates a really exciting
platform for our future strategic direction and opens up new
opportunities for profitable network growth.
We also expect to announce some exciting developments in
the coming year regarding the product development being
undertaken at Hangar 22, our top secret innovation centre.
Every aspect of our Business Premier™, Premium Economy
and Economy experience has been under the microscope
and we have invested considerable time and effort in
understanding emerging trends in consumer behaviour and
technology across the international markets where we operate.
I am extremely proud that our customers and the New Zealand
public continue to put their faith in us. We have held the number
one corporate reputation in New Zealand for five years now and in
Australia for three years. This means that despite the challenges
we faced this year, we have maintained our world-class
reputation, and this ultimately comes down to our amazing
team of over 12,500 staff who go above and beyond every day
to offer our customers a truly exceptional travel experience.
Part of ensuring a superior customer experience is to support a
strong sense of culture and inclusiveness across our workforce.
We are working tirelessly to drive diversity and inclusion and to
create a workforce that is proudly representative of Aotearoa.
We are actively building greater cultural competency,
particularly within our Senior Leadership Team, and have
committed to increasing our representation of Māori and
Pasifika employees in leadership roles to 20 percent by 2022.
Gender equality and greater female representation on our
Senior Leadership Team remains a key priority, and we are
on track to achieve our updated target of 50 percent female
representation by 2020.
Forming the foundation of our commitment to customers and
culture is our unwavering focus on health and safety. Simply
put, investing in health and safety processes and programmes
to ensure compliance with regulations is not enough. We are
constantly working to improve our operations, safety protocols
and tools that our people can deploy each day to ensure a safe
environment for both our team and the customers they serve.
One of the things that I am most proud of, is how we have
embedded sustainability into the very fabric of our organisation,
and it is now deeply rooted in our processes, our people and
our strategic priorities.
This year, we have further progressed our Project Green
initiatives, which have enabled us to reclassify and reuse
40 on-board products that previously went to landfill due
to biosecurity rules. Although this was initially just for flights
into Auckland, we have now rolled this out to Wellington,
Queenstown, Christchurch and Los Angeles.

8
AIR NEW ZEALAND ANNUAL SHAREHOLDER REVIEW 2019
Letter from the Chief
Executive Officer (continued)
Jennifer Sepull
Chief Digital Officer
Executive Role
Jennifer Sepull joined Air New Zealand
in May 2019 as Chief Digital Officer.
Jennifer and her team are focused on
delivering a five-year strategic roadmap
that will embed digital excellence at the
heart of Air New Zealand and empower
our customers, our people and help
deliver revenue growth. The team have
also been driving greater investment
into cybersecurity and improving
the resilience of our systems and
infrastructure, so that Air New Zealand
is set up for future digital success.
Before joining Air New Zealand
Jennifer has more than 20 years of digital
and technology leadership experience
from a range of diverse and innovative
companies, including Kimberly-Clark,
Honda Motor Corporation, IBM, as well as
various start-up technology organisations.
She is also on several customer advisory
boards, including with IBM and Gartner
and currently serves as a member of the
technical advisory group for the London
Stock Exchange.
Balancing life and work
Outside of work, Jennifer is a keen runner
and loves to do a morning run along the
Auckland Viaduct Harbour. She also loves
travelling and exploring the great variety
of cuisine on offer in Auckland.
and honour to have worked alongside this team knowing that
together we have achieved incredible things for our airline and
for our nation.
I leave confident that the airline is in great shape with strong
leadership to rise to the constantly evolving and inevitable
commercial, customer and cultural challenges and opportunities.
Finally, I would like to thank Tony Carter and the Air New Zealand
Board of Directors, who have stood behind me and the Executive
team as we have taken the airline to the next level.

Christopher Luxon
Chief Executive Officer
22 August 2019
Most recently we committed to more than double the number of
single-use plastic items that we will remove from our operation
from 24 million to 55 million items in 2020. Plastic waste is
a highly topical and visible issue for us and our increasingly
sustainability-conscious customers, so we are pleased to be
making significant progress in this space.
This year we also partnered with Z Energy, Contact and Genesis
to create a partnership called Drylandcarbon, which will
establish a forestry portfolio for the purpose of sequestering
carbon and providing a stable, long-term supply of quality
New Zealand carbon credits.
This is all really positive, but there is still so much more to
be done. Sustainability is a vitally important topic for
Air New Zealand, and we risk losing our social licence to
operate if we do not genuinely address climate change.
Finally, after eight years with the airline and seven years as
Chief Executive Officer, I will be stepping down from the day
to day leadership of Air New Zealand at this year’s Annual
Shareholders’ Meeting in September. I would like to first thank
and acknowledge the Air New Zealander whānau – it has been
an amazing journey to say the least and it is my great privilege
3.1x
Air New Zealand’s
10 year TSR has
exceeded the
Bloomberg World
Airline Index by
AIR NEW ZEALAND BLOOMBERG WORLD AIRLINE INDEX
Meet our newest
team member
600
500
400
300
200
100
0
PERCENTAGE
JUN
2009
JUN
2 011
JUN
2013
JUN
2015
JUN
2017
JUN
2019
10 year total shareholder return (TSR)

Our year in the air
LETTER FROM THE CHIEF EXECUTIVE OFFICER
|
OUR YEAR IN THE AIR
AIR NEW ZEALAND GROUP
9
is the most popular female
name among Airpoints loyalty
programme members
Susan
inflight meals served globally
6.3 million
cups of coffee served onboard
5.8 million
of camembert cheese served
aboard Koru Hour flights
10.4 tonnes
Air New Zealand lollies munched
15.5 million
appetisers served featuring
Ngāti Porou’s Ahia Smoked Fish
45,000+
views of Bohemian Rhapsody
in the air
162,215
is the most popular food item
purchased onboard using
Airpoints Dollars
™
Cheese toastie
the most selected Economy
seat on our Boeing 787-9
Dreamliner aircraft
35H
bottles of New Zealand
wine poured
963,232
flights booked by Airpoints
™

members using Airpoints Dollars
968,123
flights operated by
Air New Zealand
190,000+
tonnes of CO
2
-e offset
60,000
More than

10
AIR NEW ZEALAND ANNUAL SHAREHOLDER REVIEW 2019
Safety as a Shared Value
Our number one priority is ensuring that our customers get to and from their
destinations safely and that the health, safety and wellbeing of our people is
always at the forefront of everything we do.
That’s why we are continuing to invest in new technologies to
ensure our operational integrity remains second to none.
For example, we are currently adding new weather radar
tracking enhancements to our Boeing 777 fleet and Airbus
A320 domestic fleet that provide pilots with predicative
information about potentially disruptive weather in their flight
path. Our team is finding it extremely beneficial to help avoid
lightning storms or severe turbulence, making the journey
smoother for our customers.
The commitment to a world-class safety culture is set from
the top, with the Board Health, Safety and Security Committee
providing strong governance and three members of the
Executive Team driving core safety across the airline.
Chief Operations Integrity & Standards Officer Captain David
Morgan is accountable for operational safety for the airline.
He also serves as Chairman of IATA’s Safety, Flight and Group
Operations Advisory Council.
Chief Ground Operations Officer Carrie Hurihanganui holds
responsibility for engineering air worthiness as part of her
mandate, which has included the task of managing the impact
of the global Rolls-Royce engine issues on the airline’s Boeing
787-9 fleet.
Chief Air Operations & People Safety Officer John Whittaker
has long been a champion of driving marked improvement in
workplace safety, with the airline working towards year-on-year
reduction in the reported rate of injuries by Air New Zealanders.
In 2019, the team was proud to see an eight percent reduction
in the total recordable injuries from the prior year.
Safety first

Taking workplace safety to the next level
We are implementing ‘safety in design’ principles to eliminate
or reduce manual handling risks. For example, installing bag
drop conveyors at check-in means customers can safely and
easily upload their bags. We have installed self-bag drops at
a number of our domestic ports.
While we are always striving to improve workplace safety, it was
wonderful to be acknowledged as the supreme winner at the
New Zealand Workplace Health and Safety Awards this year.
Even more exciting was having one of our Health and Safety
Representatives (HSRs), Brent Armitage, named as edenfx
HSE Recruitment Health & Safety Representative of the Year.
Brent truly exemplifies what we strive to achieve at Air New
Zealand – inspiring our people to look after their safety, health,
wellbeing and environment. Brent started working for Air New
Zealand at our Auckland Domestic Ramp three years ago.
The team is responsible for moving and sorting baggage,
loading and unloading aircraft, and making tarmac crossings safe
for our customers. On average, people in this team can lift more
than 1 tonne of baggage and walk over 10 kilometres a day.
After becoming a Health and Safety Representative (HSR) for his
team, Brent saw an opportunity as an HSR to make a real difference
to the safety of his team. He quickly became the go-to person for
safety on the ramp and organised safety content to be displayed
on unused screens in the break room, making updates, alerts and
general safety information easily accessible to the whole team.
Presenting his perspective of people safety to the Board of
Directors earlier this year, Brent also led the Board on a Ramp
‘walkaround’ to show them the challenges first-hand and talk
directly about improvements that could be made.
SAFETY AS A SHARED VALUE
AIR NEW ZEALAND GROUP
11
2019
20162017
2018
17. 9
15.2
11.2
10.3
Total Recordable Rate (TRR) of injuries
Total
recordable
injuries
Most reported injuries this year resulted
from manual handling activities, slips, trips
and falls, and contact with objects.
The majority of these occurred while handling
baggage, stowing cabin bags and during meal
service. We are focused on reducing the
total reported rate of injuries through a
combination of investment in equipment
and staff education.

12
AIR NEW ZEALAND ANNUAL SHAREHOLDER REVIEW 2019
Keeping our customers at the core
Challenging ourselves
daily to be great
One of the first exposures that many visitors
have to New Zealand is when they step on
board one of our aircraft. Our mission is to
provide customers with a uniquely “Air New
Zealand” experience and we take great pride
in setting a high expectation for the rest of
their journey around our incredible country.
Customers know that when they choose to fly
with us, they are getting a world-class product
and service offering, but we know that we need
to adopt a continuous improvement mindset
to give our customers the best and most
innovative flying experience in the world.
This doesn’t necessarily mean that we always
need to be working on big-ticket innovations
like the new Business Premier
™
seat development
that is currently being undertaken at our top-
secret innovation centre, Hangar 22. There is
so much more to our quest for greatness.
The philosophy behind our approach to
customer experience is to truly listen to
what our customers have to say, apply that
understanding to our design concepts and
then invest in the areas that matter most to
our customers. We apply our deep knowledge
of the travel experience and all of its potential
pain points to make iterative adjustments
every day.
Test flights
As we continue to challenge ourselves to think a little
differently and adopt a continuous improvement mindset,
we have developed the concept of the ‘Test Flight’, using our
aircraft as a live laboratory - a place to test potential new
products and designs. We choose a sector and an innovative
product or experience to trial and we ask our customers and
crew to give us honest feedback about their experience.
Our Crew Customer Engagement Team are pivotal to
bringing these ideas and innovations to life. Made up of
select cabin crew members, this team act as champions
of change, helping to test the new concepts and
communicate the changes and rationale to our customers.
Surviving dry July
From early July, we put New Zealand’s first artisan distilled,
alcohol free gin onboard select long-haul flights to support dry
July and the increasing number of customers who prefer non-
alcoholic drinks. Our extensive customer research has told us
that around 13 percent of our customers don’t drink alcohol
at all and 25 percent would like a zero alcohol spirit option.
We paired this knowledge with the goal of supercharging New
Zealand’s success and partnered with local Devonport company
Ecology and Co to deliver bespoke cocktails during dry July.
Would you like some crackers with that cheese?
We recently swapped out the crackers we serve during Koru
Hour, from two large wheat crackers to four smaller rice
crackers. Is it the most ground-breaking idea in the world? No –
but it is listening to the resounding feedback we have received
from customers, who have long debated what the appropriate
cheese to cracker ratio should be. It also caters to our gluten free
friends so that everyone can enjoy our premium cheeses.
Plastic, not so fantastic
Earlier this year we began the process of removing single-use
water bottles from our premium cabins as part of Air New
Zealand’s broader sustainability initiatives. We wanted to ensure
our customers clearly understood the rationale behind this
change, so decided to trial this initiative on 10 different routes.
The Crew Customer Engagement Team took special care to
explain the change on these test flights, and asked customers
for their views and feedback. As a result of these interactions
we determined that many customers didn’t realise that our crew
are happy to fill personal water bottles – a simple but significant
learning in our quest for plastic reduction.

KEEPING OUR CUSTOMERS AT THE CORE
AIR NEW ZEALAND GROUP
13
Innovation is alive and well
at Hangar 22
Our product development team continue
to work hard at Hangar 22, our top-
secret innovation centre, as we develop
the future aircraft cabin experience for
long-haul travellers. Every aspect of our
Business Premier™, Premium Economy
and Economy experience has been under
the microscope over the past year as we
look to apply the considerable knowledge
and data we have collected regarding
emerging trends in consumer behaviour
and technology requirements.
The airline has conducted 11 rounds of
product and experience testing so far,
with 165 customers and 35 cabin crew.
Our customers along with our staff
who deliver the experiences on-board
everyday, have given us some great
perspectives on the hundreds of ideas
that were generated in a series of design
workshops last year. We are now in the
phase of final evaluation on a couple of
potentially game changing ideas but
there is still a bit of work to be done....
watch this space!
High
customer and
crew satisfaction
scores in 2019
Winner of the
Passenger
Experience
Achievement
ATW Airline
Industry Awards
Best
Airline Alliance
Lounge
Skytrax
World Airline Awards
POSITIONAL
Best
Premium
Economy Class
in the World
TripAdvisor’s Travellers’
Choice Awards
“The moments of personal engagement that we create by employing
thoughtful design and truly understanding the travel journey allow us
to continuously evolve what a great customer experience can be.”
Nikki Goodman
General Manager, Customer Experience

14
AIR NEW ZEALAND ANNUAL SHAREHOLDER REVIEW 2019
A truly New Zealand company
Diversity and inclusion
Since we first articulated our commitment to creating a diverse and inclusive
workforce that is proudly representative of Aotearoa, we have made significant
strides in our journey.
We have increased representation of women on our
Senior Leadership team from 16 percent in January 2013 to
44 percent in 2019 with a target of 50 percent by 2020.
Māori and Pasifika employees now make up 15 percent
of our leadership team, with a clear target to further grow
representation in leadership roles to 20 percent by 2022.
Making a difference to the lives of
Air New Zealanders
Our people are one of the key ways that we differentiate
ourselves from our competition, and one of our competitive
advantages. That is why we are always listening to their
feedback and updating our policies to create an environment
where everyone feels valued and supported. This year we
have introduced a number of initiatives that support our
diversity and inclusion strategy:
Announced exciting changes to the
Parental Leave package we offer to new
mums and dads
Kate Johnston, an Air New Zealander and new mum to baby
Sam gives her insight into the policy change.
“My partner Bruce and I both work for Air New Zealand – he
as a First Officer on the A320 fleet and I as a Senior Manager
in our Customer Experience team. When the new policy was
announced with both maternity and paternity benefits it
was like a weight lifted. Bruce would no longer have to take
unpaid leave to support me in the initial weeks and I would
be able to enjoy time with my infant and my family without
any financial concerns. I feel that I am coming back to work
for a company that has demonstrated that they value and
support working mothers.”
Introduced a new tattoo policy, allowing all
employees irrespective of where they work
to be able to proudly display non-offensive
tattoos at work
Gabriella Tohiariki, one of our short-haul A320 cabin crew team
says, “as a crew member with tā moko I am so excited about the
change – it feels like a massive part of my culture has finally been
accepted. Tā moko represents who I am and where I whakapapa
back to – it is elegant and staunch and an honour to have. I feel
like Air New Zealand is really listening to what employees have to
say and changing things for the better.”
Winner of the
inaugural IATA
Diversity and
Inclusion Team award
Achieved Gender,
Accessibility and
Rainbow tick
accreditation
Introduced Te Ara Nui,
a new graduation
ceremony to welcome
cabin crew and ground
employees into the
Air New Zealand whānau

A TRULY NEW ZEALAND COMPANY
AIR NEW ZEALAND GROUP
15
Sustainability
As we approach our 80th anniversary, we recognise that it is more important
than ever that we continue to step up to the very real challenge that global
climate change presents. We know that if we want to be around for another
80 years, we have a pivotal role to play in driving broader social change.
This year we have rolled out a number of exciting initiatives
that support our carbon reduction programme and our wider
sustainability strategy.
Doubling-down on our commitment
to waste reduction
We recently announced our commitment to increase the number of
single use plastic items we remove from our operations from 24 million
to nearly 55 million items a year. This will involve removing:
individual plastic water bottles
460,000
individual plastic sauce sachets
200,000
plastic coffee and water cups
44.5 million
The Drylandcarbon partnership
This year we partnered with Z Energy, Contact and Genesis
to create the Drylandcarbon partnership, which will produce
a stable supply of quality New Zealand carbon credits.
trees will be planted by the partnership
over the next five years
20 million
More than
Supporting customers to offset
their flying footprint
Our FlyNeutral programme was extended to our Corporate
and Government customers this year. FlyNeutral allows
a customer to elect to voluntarily offset the emissions
associated with their flight by adding the cost of carbon
offset credits to the total cost of their ticket.
In the past year, Air New Zealand customers from around
the world have elected to ‘fly neutral’ and have contributed:
to permanent New Zealand native
forestry projects
$1 million
More than
retail journeys partially or fully offset
183,000
More than
tonnes of CO
2
-e offset
60,000
More than
Project Green goes global
We continue to make significant headway with our waste diversion
project, Project Green. As a result of having 40 types of inflight products
reclassified since 2017, we have:
to Wellington, Queenstown, Christchurch and
our first international location, Los Angeles
Project Green
of glass
302 tonnes
Recycled
of untouched product into our network
280 tonnes
Reinjected
Rolled out

16
AIR NEW ZEALAND ANNUAL SHAREHOLDER REVIEW 2019
Our partnership with
New Zealand Rugby
As the airline sponsor of the World Champion All Blacks rugby team,
we are proud to partner with New Zealand Rugby and back the boys in black.
Ahead of this year’s big event in Japan and to celebrate our
20-year partnership with New Zealand Rugby, we proudly
released our 19th safety video in early August featuring some
of New Zealand’s rugby legends, alongside our very own cabin
crew, airport employees, engineers and pilots as they launch
a top-secret new airline called Air All Blacks. It wouldn’t be an
Air New Zealand safety video without some tongue-in-cheek
humour, and we were thrilled to have one of Hollywood’s
infamous television lawyers (Louis Litt, played by the actor
Rick Hoffman) join in on the fun. This is our third safety video
featuring our beloved All Blacks, with Crazy About Rugby in
2011 and our infamous Men in Black video in 2015.
But our relationship with the All Blacks goes far deeper than
just safety videos. Like most New Zealanders, at Air New
Zealand we are totally rugby mad. So, when it comes to the
pride and joy of our nation – the mighty All Blacks – it’s fair
to say that we are not just your typical sponsor – from our
engineers to our cabin crew, our chefs to our check-in staff,
we are all #CrazyAboutRugby.
Not only do the All Blacks star in Air New Zealand content
shared across the country and the world, our inflight
entertainment is also jam packed with iconic games of the
past. Sometimes your flight’s Captain will even give you a live
update if there is a game playing while you fly with us.
As all eyes focus on Japan later this year, you will see our
lounges and inflight experience teams express their own
version of #CrazyAboutRugby, serving black themed food
and beverages to our customers. Air New Zealand is also
behind “All Blacks to the Nation”, flying the boys to five regions
to connect with fans who typically aren’t able to meet their
heroes, before they head off to Japan. If you are really lucky,
you might even find yourself sitting amongst the boys as we
fly the team to Japan ahead of the opening game because we
are also the All Black’s team bus – getting them to and from
games at 30,000 feet.
We don’t forget about the little guys either and are proud
sponsors of the Air New Zealand Rippa Rugby Championship,
an annual event where the All Blacks have been known to
surprise budding rugby players with a visit.
We have always been
#CrazyAboutRugby

OUR PARTNERSHIP WITH NEW ZEALAND RUGBY
AIR NEW ZEALAND GROUP
17
Why make
safety videos?
Whether people love them or hate them, we know that
by making our safety videos fun and entertaining,
people pay greater attention to the safety messages
which is always priority number one for us.
Our safety videos also help drive global awareness of
New Zealand as a destination, as well as Air New Zealand’s
routes, products, people and culture. This helps us get
greater exposure in large markets where it would
otherwise be difficult or too costly to gain traction.
Since the launch of Air New Zealand’s creative
safety videos 10 years ago, they have racked up
more than 200 million views – not bad
for a country with a population of
4.9 million people!

Revenue
Operating revenue for the period
increased 5.3 percent to $5.8 billion,
an increase of $290 million. Excluding
the impact of foreign exchange,
operating revenue increased 4.1 percent.
Passenger revenue increased by 5.6
percent to $5.0 billion, reflecting higher
capacity across the network as well
as unit revenue growth. Excluding
the impact of foreign exchange,
passenger revenue was up 4.6 percent.
Capacity (Available Seat Kilometres,
ASK) increased 4.0 percent, driven by
network wide growth. Demand (Revenue
Passenger Kilometres, RPK) grew ahead
of capacity at 5.2 percent, resulting in
an increased load factor of 83.8 percent
for the period. Passenger Revenue
per Available Seat Kilometre (RASK)
improved 1.6 percent.
International long-haul capacity
grew 3.6 percent driven by the
commencement of new services to
Chicago and Taipei and the introduction
of a second daily service to Singapore
from late March 2019. Partially offsetting
growth from new routes were frequency
rationalisations in Japan and some
North American ports. Demand on
international long-haul routes increased
5.2 percent, with load factor increasing
1.3 percentage points to 84.7 percent.
International long-haul RASK increased
by 2.7 percent reflecting positive
pricing dynamics, improved demand
and strong performance on the new
routes. Excluding the impact of foreign
exchange, RASK increased 0.7 percent.
Short-haul capacity grew 4.4 percent,
driven by additional capacity on the
Tasman following the end of the alliance
with Virgin Australia, as well as targeted
growth across several domestic regional
and main trunk routes. Demand growth
of 5.2 percent was ahead of capacity,
with load factors improving by 0.6
percentage points to 82.7 percent.
Short-haul RASK grew 0.6 percent,
or 0.4 percent excluding the impact
of foreign exchange, driven largely by
strong Domestic and Tasman demand
in the first half of the year. Following a
slowdown in domestic leisure demand
in the second half of the year, a strategic
change in the domestic pricing strategy
helped to increase load factors and
maintain RASK.
Cargo revenue was $390 million, an
increase of 0.8 percent. Excluding the
impact of foreign exchange, cargo
revenue decreased by 1.8 percent,
reflecting increased competition across
the global cargo market as continued
macro-economic uncertainty impacted
global demand.
Contract services and other revenue
was $435 million, an increase of 5.6
percent, driven by higher utilisation
of lounge services from alliance
passengers, increased loyalty
membership and higher third party
maintenance activity. There was also
nominal impact from foreign exchange.
Financial Commentary
A robust revenue performance in the first half of the year was tempered
in the second half by a slower rate of demand growth, particularly impacting
the domestic network.
Costs grew at a faster rate than revenue, driven largely by a 19 percent
increase in fuel prices as well as a temporary increase in costs to provide
greater operational resilience, which alleviated in the second half.
Underlying unit cost improvements contributed $113 million to profitability,
driven by strong economies of scale and efficiencies.
Despite the challenging operational environment, the Group delivered
earnings before taxation for the 2019 financial year of $374 million.
AIR NEW ZEALAND ANNUAL SHAREHOLDER REVIEW 2019
18
Air New Zealand’s
earnings before
taxation for the 2019
financial year were
$
3 74
million
Revenue was
$
5.8
billion
Net profit after
taxation was
$
270
million

Expenses
Operating expenditure increased by
$402 million or 9.6 percent largely
due to higher fuel prices. Excluding
the additional $191 million related
to increased fuel prices, the impact
of unfavourable foreign exchange
movements, the temporary global
Rolls-Royce engine issues and third
party maintenance costs, operating
expenditure grew at a slower rate
than capacity.
Costs per ASK (CASK) increased 5.4
percent, including fuel price increases,
foreign exchange, the temporary impact
of the global Rolls-Royce engine issues
and increased costs related to third
party maintenance contracts. Excluding
those items, CASK improved 1.2 percent,
as economies of scale and efficiencies
offset non-fuel price increases.
Labour costs were $1.4 billion, up $57
million or 4.4 percent. Excluding the
impact of foreign exchange, labour
costs increased 4.3 percent. The higher
cost was driven by rate and activity
increases as well as crew inefficiencies.
Labour costs were also impacted by
additional costs associated with building
operational resilience into our schedule.
These increases were partially offset by
reduced incentive payments.
Fuel costs were $1.3 billion, increasing
by $209 million or 21 percent excluding
the impact of foreign exchange. The
largest driver of this was a $191 million
or 19 percent increase in the average
fuel price, net of hedging. Volume
growth drove $18 million or 1.8 percent
of the additional fuel costs, reflecting
capacity growth partially offset by
new aircraft efficiencies. A weaker
New Zealand Dollar resulted in a $75
million unfavourable movement from
foreign exchange.
Aircraft operations, passenger services
and maintenance costs were $1.4 billion,
an increase of $115 million or 9.0 percent.
This was driven by additional capacity,
price increases and costs associated
with providing greater operational
resilience. In addition, higher jet fleet
maintenance, growth in the fleet and
increased third party maintenance
activity drove higher maintenance costs.
Sales and marketing and other expenses
increased by $18 million or 2.9 percent,
driven by promotional activity for the
new international routes of Taipei and
Chicago, higher commission activity and
increased property costs.
Ownership costs increased by $58
million or 7.4 percent, reflecting the
delivery of new aircraft, offset by lower
funding costs.
The impact of foreign exchange rate
changes on the revenue and cost base
in the period resulted in an unfavourable
foreign exchange movement of $60
million. After taking into account a $72
million favourable movement in hedging,
overall foreign exchange had a net $12
million positive impact on the Group
result for the period.
Share of Earnings of Associate
Share of earnings of associates has
increased by $4 million to $37 million
for the period, reflecting further growth
in engine volumes from the Christchurch
Engine Centre.
Cash and Financial Position
Cash on hand at 30 June 2019 was
$1.1 billion, a decrease of $288 million
from 30 June 2018, as strong operating
cash flow in the period was offset by
investment in aircraft and dividend
payments. The cash position reflects
the updated liquidity target range of
$700 million to $1 billion, which was
announced last year. The airline expects
to remain near the top-end of the target
range in the near term.
Operating cash flows were $986 million,
a decline of 4.4 percent, reflecting lower
earnings offset by strong working
capital cash flow and the timing of cash
tax payments.
Net gearing, including capitalised
aircraft operating leases, increased 2.2
percentage points to 54.6 percent, largely
due to continued investment in fleet.
A fully imputed final ordinary dividend
of 11.0 cents per share has been
declared, bringing the full year 2019
ordinary dividends declared to 22.0
cents per share, which is in-line with
the prior year and reflects the Board’s
intention to look through short-term
earnings volatility to consistently pay
a sustainable ordinary dividend while
maintaining financial resilience.
AIR NEW ZEALAND GROUP
FINANCIAL COMMENTARY
19
EX DIVIDEND
DAT E :
5 September
2019
DIVIDEND
RECORD DATE:
6 September
2019
DIVIDEND
PAYMENT DATE:
18 September
2019

AIR NEW ZEALAND ANNUAL SHAREHOLDER REVIEW 2019
20
Change in Profitability
$540m
The key changes in profitability, after isolating the impact of foreign
exchange movements, are set out in the table below
*
:
$ 374m
* The numbers referred to in the Financial Commentary on the previous page have not isolated the impact of foreign exchange.
June 2018 earnings
before taxation
Passenger capacity
$178m
- Capacity increased by 4.0 percent from growth across the network including
the launch of new routes to Chicago and Taipei, increased frequency on
Singapore as well as growth on the Tasman following the end of the Virgin
Australia alliance and increases on regional and domestic main trunk routes
Passenger RASK
$38m
- Revenue per Available Seat Kilometre (RASK) improved 0.6 percent excluding FX
reflecting positive pricing dynamics, improved demand and strong performance
on new routes. Loads increased by 1.0 percentage points to 83.8 percent
- Long-haul RASK increased by 0.7 percent excluding FX and loads increased
1.3 percentage points to 84.7 percent
- Short-haul RASK improved by 0.4 percent excluding FX and loads improved
0.6 percentage points to 82.7 percent
Cargo revenue
-$7m
- Cargo revenue declined due to a reduction in volumes of 1.3 percent and yield
of 0.5 percent
Contract services and
other revenue
$18m
- Increase in third party maintenance work and ancillary revenue from higher
utilisation of lounge services and increase in loyalty membership
Labour
-$56m
- Increased activity arising from capacity growth, general rate increases and crew
inefficiencies offset by reduced incentive payments
Fuel
-$209m
- The average fuel price increased 19 percent compared to the prior year
(net of hedging benefits) resulting in $191 million of additional costs. Consumption
increased by 1.8 percent due to an increase in capacity offset by fleet efficiencies
arising from delivery of new aircraft
Maintenance
-$18m
- Increase in jet fleet maintenance, growth in fleet and third party maintenance work
Aircraft operations and
passenger services
-$58m
- Higher activity due to capacity growth, price increases and costs associated with
operational resilience
Sales and marketing and
other expenses
-$12m
- Promotional activity for new Taipei and Chicago routes and higher sales
commission volumes due to increased activity
Depreciation, lease and
funding costs
-$56m
- Increase in depreciation and lease expense reflecting new aircraft deliveries offset
by lower funding costs
Net impact of foreign
exchange movements
$12m
- Foreign exchange hedging gains offset by the net unfavourable impact of currency
movements on revenue and costs
Share of earnings of associates
$4m
- Improved earnings from Christchurch Engine Centre driven by growth in
engine volumes
June 2019 earnings
before taxation

AIR NEW ZEALAND GROUP
21
Financial Performance
12 MONTHS TO
30 JUNE 2019
$M
12 MONTHS TO
30 JUNE 2018
$M
Operating Revenue
Passenger revenue
Cargo
Contract services and other revenue
4,960
390
435
4,696
387
412
Operating Expenditure
Labour
Fuel
Maintenance
Aircraft operations
Passenger services
Sales and marketing
Foreign exchange gains/(losses)
Other expenses
5,785
(1,351)
(1,271)
(399)
(678)
(319)
(350)
53
(290)
5,495
(1,294)
(987)
(352)
(634)
(295)
(344)
(19)
(278)
(4,605)(4,203)
Operating Earnings (excluding items below)
Depreciation and amortisation
Rental and lease expenses
1,180
(567)
(245)
1,292
(525)
(227)
Earnings Before Finance Costs, Associates and Taxation
Net finance costs
Share of earnings of associates (net of taxation)
368
(31)
37
540
(33)
33
Earnings Before Taxation
Taxation expense
3 74
(104)
540
(150)
Net Profit Attributable to Shareholders of Parent Company270390
Interim and final dividends declared per share (cents)
Net tangible assets per share (cents)
22.0
169
22.0
179
Cash Flows
12 MONTHS TO
30 JUNE 2019
$M
12 MONTHS TO
30 JUNE 2018
$M
Cash inflows from operating activities
Cash outflows from operating activities
5,915
(4,929)
5,482
(4,451)
Net cash flow from operating activities
Net cash flow from investing activities
Net cash flow from financing activities
986
(883)
(391)
1,031
(778)
(279)
Decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
(288)
1,343
(26)
1,369
Cash and Cash Equivalents at the End of the Year 1,055 1,343
Certain balances for the year ended 30 June 2018 have been restated following the adoption of NZ IFRS 15 - Revenue from Contracts with Customers.
Refer to Note 25 of the 2019 Group Annual Financial Statements for further details.
Financial Summary
CHANGE IN PROFITABILITY
|
FINANCIAL SUMMARY

Financial Position
A S AT
30 JUNE 2019
$M
30 JUNE 2018
$M
Bank and short-term deposits
Trade and other receivables
Inventories
Derivative financial assets
Income taxation
Other assets
1,055
564
81
48
-
56
1,343
576
75
187
4
68
Total Current Assets 1,804 2,253
Trade and other receivables
Property, plant and equipment
Intangible assets
Investments in other entities
Other assets
64
5,268
186
149
285
77
5,035
170
118
193
Total Non-Current Assets 5,952 5,593
Total Assets 7,75 6 7,846
Trade and other payables
Revenue in advance
Interest-bearing liabilities
Derivative financial liabilities
Provisions
Income taxation
Other liabilities
585
1,372
307
32
105
25
240
562
1,322
431
1
117
-
263
Total Current Liabilities 2,666 2,696
Revenue in advance
Interest-bearing liabilities
Provisions
Other liabilities
Deferred taxation
200
2,290
165
42
304
185
2,303
151
27
308
Total Non-Current Liabilities 3,001 2, 9 74
Total Liabilities 5,667 5,670
Net Assets 2,089 2,176

Issued capital
Reserves
2,219
(130)
2,226
(50)
Total Equity 2,089 2,176
The summary financial information has been derived from, and should be read in conjunction with, the Air New Zealand Group Annual Financial
Statements (the ‘Annual Financial Statements’). The Annual Financial Statements, dated 22 August 2019, are available at: airnzinvestor.com
The summary financial information cannot be expected to provide as complete an understanding as provided by the Annual Financial Statements.
The accounting policies used in these financial statements are attached in the notes to the Annual Financial Statements.
Share RegistrarAnnual Financial StatementsInvestor Relations Office
LINK MARKET SERVICES LIMITED
Level 11, Deloitte Centre
80 Queen Street, Auckland 1010, New Zealand
PO Box 91976, Auckland 1142, New Zealand
Email: enquiries@linkmarketservices.com
Website: linkmarketservices.com
New Zealand Phone: (64 9) 375 5998
New Zealand Fax: (64 9) 375 5990
Australia Phone: (61) 1300 554 474
The Annual Financial Statements are available
by visiting our website airnzinvestor.com
OR you may elect to have a copy sent to you
by contacting Investor Relations.
ELECTRONIC SHAREHOLDER
COMMUNICATION
If you would like to receive all investor
communications electronically, including
interim and annual shareholder reviews,
please visit the Link Market Services website
linkmarketservices.com or contact them
directly (details to the left).
Private Bag 92007, Auckland 1142, New Zealand
Phone: 0800 22 22 18 (New Zealand)
Phone: (64 9) 336 2607 (Overseas)
Fax: (64 9) 336 2664
Email: investor@airnz.co.nz
Website: airnzinvestor.com
Financial Summary (continued)
AIR NEW ZEALAND ANNUAL SHAREHOLDER REVIEW 2019
22

AIR NEW ZEALAND GROUP
23FINANCIAL SUMMARY (CONTINUED)
|
KEY FINANCIAL INFORMATION
Earnings before taxation
2015
800
600
400
200
0
$ MILLION
2016201720182019
474
374
663
527
540
Ordinary dividends declared
2015
25
20
15
10
5
0
CENTS PER SHARE
2016201720182019
16
22
20
21
22
Operating cash flow
2015
1,200
1,000
800
600
400
200
0
$ MILLION
2016201720182019
986
1,100
1,0 74
904
1,031
Key Financial Information
Operating revenue
2015
$ MILLION
2016201720182019
5,231
4,925
6,000
5,000
4,000
3,000
2,000
1,000
0
5,785
5,109
5,495

Seoul
Kia ora
Fly non-stop from Auckland to Seoul
from 23 November 2019
Book now at airnz.co.nz or your preferred travel agent
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---

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AIR NEW ZEALAND ANNUAL FINANCIAL RESULTS 2019

AIR NEW ZEALAND GROUP
1
*This document, in conjunction with the Air New Zealand Annual Shareholder Review 2019, constitutes the 2019 Annual Report to shareholders of Air New Zealand Limited.
DIRECTORS’ STATEMENT
The directors of Air New Zealand Limited are pleased to present to shareholders the Annual Report* and financial statements for
Air New Zealand and its controlled entities (together the “Group”) for the year to 30 June 2019.
The directors are responsible for presenting financial statements in accordance with New Zealand law and generally accepted accounting
practice, which give a true and fair view of the financial position of the Group as at 30 June 2019 and the results of the Group’s operations
and cash flows for the year ended on that date.
The directors consider the financial statements of the Group have been prepared using accounting policies which have been consistently
applied and supported by reasonable judgements and estimates and that all relevant financial reporting and accounting standards have
been followed.
The directors believe that proper accounting records have been kept in accordance with the requirements of the Financial Markets
Conduct Act 2013.
The directors consider that they have taken adequate steps to safeguard the assets of the Group, and to prevent and detect fraud and
other irregularities. Internal control procedures are also considered to be sufficient to provide a reasonable assurance as to the integrity
and reliability of the financial statements.
This Annual Report is signed on behalf of the Board by:
To n y C a r t e r Jan Dawson
Chairman Deputy Chairman
22 August 2019
Contents
Statement of Financial Performance 2
Statement of Comprehensive Income 3
Statement of Changes In Equity 4
Statement of Financial Position 5
Statement of Cash Flows 6
Statement of Accounting Policies 7
Notes to the Financial Statements
1. Revenue Recognition and Segmental Information 9
2. Expenses 10
3. Taxation 10
4. Earnings Per Share 11
5. Cash and Cash Equivalents 12
6. Trade and Other Receivables 12
7. Inventories 13
8. Other Assets 13
9. Property, Plant and Equipment 14
10. Intangible Assets 16
11. Investments in Other Entities 17
12. Revenue in Advance 18
13. Interest-Bearing Liabilities 18
14. Provisions 19
15. Other Liabilities 20
16. Distributions to Owners 21
17. Share Capital 21
18. Reserves 25
19. Operating Leases 25
20. Capital Commitments 26
21. Contingent Liabilities 26
22. Financial Risk Management 26
23. Offsetting Financial Assets and Financial Liabilities 36
24. Related Parties 37
25. Impact of New Accounting Standards 38
Independent Auditor’s Report 41
Five Year Statistical Review 46
Corporate Governance Statement 50
Directors’ Profiles 63
Interests Register 65
Directors’ Interests in Air New Zealand Securities 66
Indemnities and Insurance 66
Employee Remuneration 67
Subsidiary and Joint Venture Companies 71
Other Disclosures 72
Securities Statistics 73
Operating Fleet Statistics 74
General Information 75
Shareholder Directory 76

The accompanying accounting policies and notes form part of these financial statements.
2
AIR NEW ZEALAND ANNUAL FINANCIAL RESULTS 2019
NOTES

2019
$M

2018
$M
Operating Revenue
Passenger revenue
Cargo
Contract services
Other revenue
4,960
390
197
238
4,696
387
193
219
Operating Expenditure
Labour
Fuel
Maintenance
Aircraft operations
Passenger services
Sales and marketing
Foreign exchange gains/(losses)
Other expenses
15,785
(1,351)
(1,271)
(399)
(678)
(319)
(350)
53
(290)
5,495
(1,294)
(987)
(352)
(634)
(295)
(344)
(19)
(278)
2(4,605) (4,203)
Operating Earnings (excluding items below)
Depreciation and amortisation
Rental and lease expenses19
1,180
(567)
(245)
1,292
(525)
(227)
Earnings Before Finance Costs, Associates and Taxation
Finance income
Finance costs
Share of earnings of associates (net of taxation)11
368
48
(79)
37
540
40
(73)
33
Earnings Before Taxation
Taxation expense3
3 74
(104)
540
(150)
Net Profit Attributable to Shareholders of Parent Company270390
Per Share Information:
Basic earnings per share (cents)
Diluted earnings per share (cents)
Interim and final dividends declared per share (cents)
Net tangible assets per share (cents)
4
4
16
24.0
23.9
22.0
169
3 4.7
34.4
22.0
179
Certain balances for the year to 30 June 2018 have been restated following the adoption of NZ IFRS 15 - Revenue from Contracts with
Customers. Refer to Note 25 for further details.



STATEMENT OF FINANCIAL PERFORMANCE
FOR THE YEAR TO 30 JUNE 2019

The accompanying accounting policies and notes form part of these financial statements.
3
AIR NEW ZEALAND GROUP
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR TO 30 JUNE 2019
NOTE

2019
$M

2018
$M
Net Profit for the Year
Other Comprehensive Income:
Items that will not be reclassified to profit or loss:
Actuarial losses on defined benefit plans
Taxation on above reserve movements3
270
(9)
3
390
-
-
Total items that will not be reclassified to profit or loss
Items that may be reclassified subsequently to profit or loss:
Changes in fair value of cash flow hedges
Transfers to net profit from cash flow hedge reserve
Net translation gain on investment in foreign operations
Changes in cost of hedging reserve
Taxation on above reserve movements3
(6)
(41)
(85)
-
(8)
38
-
159
(92)
2
12
(21)
Total items that may be reclassified subsequently to profit or loss(96)60
Total Other Comprehensive Income for the Year, Net of Taxation(102)60
Total Comprehensive Income for the Year, Attributable to Shareholders of the Parent Company168450

The accompanying accounting policies and notes form part of these financial statements.
4
AIR NEW ZEALAND ANNUAL FINANCIAL RESULTS 2019
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR TO 30 JUNE 2019
NOTES
SHARE
CAPITAL
$M
HEDGE
RESERVES
$M
FOREIGN
CURRENCY
TRANSLATION
RESERVE
$M
GENERAL
RESERVES
$M
TOTAL
EQUITY
$M
Balance as at 1 July 20182,22666(13)(103)2,176
Net profit for the year
Other comprehensive income for the year
-
-
-
(97)
-
1
270
(6)
270
(102)
Total Comprehensive Income for the Year- (97) 1 264168
Transactions with Owners:
Equity-settled share-based payments (net of taxation)
Equity settlements of long-term incentive obligations
Dividends on Ordinary Shares
3, 17
17
16
7
(14)
-
-
-
-
-
-
-
-
-
(248)
7
(14)
(248)
Total Transactions with Owners(7) - - (248)(255)
Balance as at 30 June 20192,219 (31) (12) (87)2,089
NOTES
SHARE
CAPITAL
$M
HEDGE
RESERVES
$M
FOREIGN
CURRENCY
TRANSLATION
RESERVE
$M
GENERAL
RESERVES
$M
TOTAL
EQUITY
$M
Balance as at 1 July 20172,2389(16)(245)1,986
Net profit for the year
Other comprehensive income for the year
-
-
-
57
-
3
390
-
390
60
Total Comprehensive Income for the Year- 57 3390450
Transactions with Owners:
Equity-settled share-based payments (net of taxation)
Equity settlements of long-term incentive obligations
Dividends on Ordinary Shares
3, 17
17
16
5
(17)
-
-
-
-
-
-
-
-
-
(248)
5
(17)
(248)
Total Transactions with Owners(12) - - (248)(260)
Balance as at 30 June 20182,226 66 (13) (103)2,176

The accompanying accounting policies and notes form part of these financial statements.
5
AIR NEW ZEALAND GROUP
NOTES

2019
$M

2018
$M
Current Assets
Bank and short-term deposits
Trade and other receivables
Inventories
Derivative financial assets
Income taxation
Other assets
5
6
7
22
8

1,055
564
81
48
-
56

1,343
576
75
187
4
68
Total Current Assets1,8042,253
Non-Current Assets
Trade and other receivables
Property, plant and equipment
Intangible assets
Investments in other entities
Derivative financial assets
Other assets
6
9
10
11
22
8
64
5,268
186
149
-
285
77
5,035
170
118
2
191
Total Non-Current Assets5,9525,593
Total Assets7,75 67, 8 4 6
Current Liabilities
Trade and other payables
Revenue in advance
Interest-bearing liabilities
Derivative financial liabilities
Provisions
Income taxation
Other liabilities
12
13
22
14
15
585
1,372
307
32
105
25
240
562
1,322
431
1
117
-
263
Total Current Liabilities2,6662,696
Non-Current Liabilities
Revenue in advance
Interest-bearing liabilities
Provisions
Other liabilities
Deferred taxation
12
13
14
15
3
200
2,290
165
42
304
185
2,303
151
27
308
Total Non-Current Liabilities3,0012, 9 74
Total Liabilities5,6675,670
Net Assets2,0892,176
Equity
Share capital
Reserves
17
18
2,219
(130)
2,226
(50)
Total Equity2,0892,176

Tony Carter Jan Dawson
Chairman Deputy Chairman
For and on behalf of the Board, 22 August 2019
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019

The accompanying accounting policies and notes form part of these financial statements.
6
AIR NEW ZEALAND ANNUAL FINANCIAL RESULTS 2019
NOTES

2019
$M

2018
$M
Cash Flows from Operating Activities
Receipts from customers
Payments to suppliers and employees
Income tax paid
Interest paid
Interest received
5,869
(4,835)
(23)
(71)
46
5,444
(4,307)
(81)
(63)
38
Net Cash Flow from Operating Activities59861,031
Cash Flows from Investing Activities
Disposal of property, plant and equipment, intangibles and assets held for resale
Distribution from associates
Acquisition of property, plant and equipment and intangibles
Interest-bearing asset payments
24
13
7
(821)
(82)
33
16
(809)
(18)
Net Cash Flow from Investing Activities(883)(778)
Cash Flows from Financing Activities
Interest-bearing liabilities drawdowns
Rollover of foreign exchange contracts*
Equity settlements of long-term incentive obligations
Interest-bearing liabilities payments
Dividends on Ordinary Shares
17
16
263
58
(14)
(438)
(260)
347
(20)
(17)
(329)
(260)
Net Cash Flow from Financing Activities(391)(279)
Decrease in Cash and Cash Equivalents
Cash and cash equivalents at the beginning of the year
(288)
1,343
(26)
1,369
Cash and Cash Equivalents at the End of the Year51,0551,343
*Relates to gains/losses on rollover of foreign exchange contracts that hedge exposures in other financial periods.
Certain balances for the year to 30 June 2018 have been restated following the adoption of NZ IFRS 15 - Revenue from Contracts with
Customers. Refer to Note 25 for further details.
STATEMENT OF CASH FLOWS
FOR THE YEAR TO 30 JUNE 2019

7
STATEMENT OF ACCOUNTING POLICIES
FOR THE YEAR TO 30 JUNE 2019
AIR NEW ZEALAND GROUP
Reporting entity
The financial statements presented are those of the consolidated Air New Zealand Group (the Group), including Air New Zealand Limited
and its subsidiaries, joint ventures and associates.
Air New Zealand’s primary business is the transportation of passengers and cargo on scheduled airline services.
Statutory base
The parent company, Air New Zealand Limited, is a profit-oriented entity, domiciled in New Zealand, registered under the Companies
Act 1993 and listed on the New Zealand and Australian Stock Exchanges. Air New Zealand Limited is a FMC Reporting Entity under the
Financial Markets Conduct Act 2013 and the Financial Reporting Act 2013.
Basis of preparation
Air New Zealand prepares its financial statements in accordance with New Zealand Generally Accepted Accounting Practice (“NZ GAAP”).
NZ GAAP consists of New Zealand equivalents to International Financial Reporting Standards (“NZ IFRS”) and other applicable financial
reporting standards as appropriate to profit-oriented entities. These financial statements comply with NZ IFRS and International Financial
Reporting Standards (“IFRS”).
The financial statements were approved by the Board of Directors on 22 August 2019.
Basis of measurement
The financial statements have been prepared on the historical cost basis with the exception of certain items as identified in specific
accounting policies and are presented in New Zealand Dollars which is the Group’s functional currency.
Use of accounting estimates and judgements
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires the directors to exercise
their judgement in the process of applying the Group’s accounting policies. Estimates and associated assumptions are based on historical
experience and other factors, as appropriate to the particular circumstances. The Group reviews the estimates and assumptions on an
ongoing basis.
Areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements are disclosed within the specific accounting policy or note as shown below:
Area of estimate or judgement Note
Revenue in advance Note 1 Revenue recognition and segmental information
Aircraft lease return provisions Note 14 Provisions
Estimated impairment of non-financial assets ‘Impairment’ accounting policy
Note 9 Property, plant and equipment
Residual values and useful lives of aircraft related assets Note 9 Property, plant and equipment
Taxation Note 3 Taxation
Significant estimates are designated by an
symbol in the notes to the financial statements.
Significant accounting policies
Accounting policies are disclosed within each of the applicable notes to the financial statements and are designated by a symbol.
The principal accounting policies applied in the preparation of these financial statements have been consistently applied to all periods
presented, except as detailed below.
The Group has adopted NZ IFRS 15 - Revenue from Contracts with Customers with a date of initial application of 1 July 2018. Comparative
information has been restated to reflect the new standard, and reclassified to achieve consistency in disclosure with the current period.
The nature and effect of these changes are explained in detail in Note 25. In addition the Group adopted the requirements of NZ IFRS 9
(2014) - Financial Instruments with effect from 1 July 2018. The Group had previously adopted NZ IFRS 9 (2013) - Hedge Accounting with
effect from 1 July 2014. The standard had no impact on the financial statements.
The following NZ IFRSs and Interpretations, which have been issued but are not yet effective, have been identified as those that may
impact Air New Zealand in the period of their initial application, and have not yet been adopted by the Group.
NZ IFRS 16 - Leases has not been adopted early. This standard will fundamentally change the accounting treatment of leases by lessees.
The current dual accounting model for lessees, which distinguishes between on balance sheet finance leases and off balance sheet
operating leases, will no longer apply. Instead, there will be a single, on balance sheet accounting model for all leases which is similar to
current finance lease accounting. Lessor accounting remains similar to current practice. This standard became effective on 1 July 2019 and
will have a significant impact on the financial statements. Further details of the impact of the standard, including transitional adjustments
arising on adoption, are included in Note 25.

8
STATEMENT OF ACCOUNTING POLICIES CONTINUED
FOR THE YEAR TO 30 JUNE 2019
AIR NEW ZEALAND ANNUAL FINANCIAL RESULTS 2019
NZ IFRS 17 - Insurance Contracts has not been adopted early. It provides consistent principles for all aspects of accounting for insurance
contracts. This standard, which becomes effective for annual periods commencing on or after 1 January 2021, will not have a significant
impact on the financial statements.
NZ IFRIC 23 - Uncertainty over Income Tax Treatments has not been adopted early. It clarifies how to apply the recognition and measurement
requirements in NZ IAS 12 - Taxation when there is uncertainty over income tax treatments. This Interpretation, which becomes effective for
annual periods commencing on or after 1 January 2019, is not expected to have a significant impact on the financial statements.
Where necessary, comparative information has been reclassified to achieve consistency in disclosure with the current period. An amount
of $(6) million has been reclassified within the Statement of Financial Performance from ‘Other revenue’ to ‘Cargo’ for the year ended
30 June 2018 to better align with the nature of the underlying transactions.
The significant accounting policies which are pervasive throughout the financial statements are set out below. Other significant
accounting policies which are specific to certain transactions or balances are set out within the particular note to which they relate.
Basis of consolidation
The consolidated financial statements include those of Air New Zealand Limited and its subsidiaries, accounted for using the acquisition
method, and the results of its associates and joint ventures, accounted for using the equity method.
All material intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated on
consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Unrealised gains on transactions between the Group, joint ventures and its associates are eliminated to the extent of the Group’s interest
in the joint ventures and associates.
Where a business combination is achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the
acquisition date and any corresponding gain or loss is recognised in the Statement of Financial Performance.
Foreign currency translation
Functional currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (the “functional currency”).
Transactions and balances
Foreign currency transactions are converted into the relevant functional currency using exchange rates approximating those at
transaction date. Monetary assets and liabilities denominated in foreign currencies at balance date are translated at the exchange
rate at that date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated
using the exchange rate at the date of the transaction. Foreign exchange gains or losses are recognised in the Statement of Financial
Performance, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.
Group companies
The results and financial position of all group entities that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
(a) assets and liabilities are translated at the closing rate at the reporting date;
(b) income and expenses are translated at exchange rates approximating those at transaction date; and
(c) all resulting exchange differences are recognised as a separate component of equity and in Other Comprehensive Income
(within Foreign Currency Translation Reserve).
On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of borrowings and other
currency instruments designated as hedges of such investments, are taken to equity.
Impairment
Non-financial assets are reviewed at each reporting date to determine whether there are any indicators that the carrying amount may
not be recoverable. If any such indicators exist, the asset’s recoverable amount is estimated. The recoverable amount is the higher of
an asset’s fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their
present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
An impairment loss is recognised in the Statement of Financial Performance for the amount by which the asset’s carrying amount exceeds
its recoverable amount. For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately
identifiable cash flows (cash-generating units).
Financial assets carried at amortised cost are assessed each reporting date for impairment. If there is objective evidence of impairment,
the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial
asset’s original effective interest rate, where appropriate, is recognised in the Statement of Financial Performance.

9
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR TO 30 JUNE 2019
AIR NEW ZEALAND GROUP
1. Revenue Recognition and Segmental Information
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue
can be reliably measured, regardless of when payment is made. Revenue is measured at the fair value of the consideration
received or receivable. Specific accounting policies are as follows:
Passenger and cargo revenue
Passenger and cargo sales revenue is recognised in revenue in advance at the fair value of the consideration received
and allocated to each flight sector based on industry agreements. Amounts for each sector of the ticket are transferred to
revenue in the Statement of Financial Performance when the actual carriage is performed. Unused tickets are recognised
as revenue using estimates regarding the timing of recognition based on the terms and conditions of the ticket and
historical trends.
The Group operates various code share and alliance arrangements. Revenue under these arrangements is recognised when
the Group performs the carriage or otherwise fulfils all relevant contractual commitments.
Where one or more sectors are operated by another carrier the amount of the consideration received from the customer less
any amount payable to the other carrier is recognised in revenue on a net basis unless the Group has primary responsibility
for providing the service. Where the Group has primary responsibility for providing the service the amounts are recognised
gross within revenue and expenses.
Loyalty programmes
Revenues associated with the award of Airpoints Dollars to Airpoints members as part of the initial sales transaction is
determined by reference to the relative standalone selling prices. These revenues as well as consideration received in
respect of sales of Airpoints Dollars to third parties is deferred to revenue in advance (net of estimated expiry) until such
time as the Airpoints member has redeemed their points. The estimate of expiry is based upon historical experience and
is recognised in net passenger revenue at the time of the initial sales transaction.
Contract services revenue
Where contract related services are performed over a contractually agreed period, and the amount of revenue and related
costs can be reliably measured, revenue is recognised based on the proportion of contract costs for work performed to date
relative to the estimated total costs. Other contract related revenue is recognised as services are performed.
Other revenue
Other revenue includes lounge revenue, Koru membership subscriptions, commissions and fees and is recognised at the
time the service is provided. Dividend revenue is recognised when the right to receive payment is established.
Finance income
Interest revenue from investments and fixed deposits is recognised as it accrues, using the effective interest method
where appropriate.
Segmental information
Air New Zealand operates predominantly in one segment, its primary business being the transportation of passengers and cargo on an
integrated network of scheduled airline services to, from and within New Zealand. Resource allocation decisions across the network are
made to optimise the consolidated Group’s financial result.
2019
$M
2018
$M
Analysis of revenue by geographical region of original sale
New Zealand
Australia and Pacific Islands
United Kingdom and Europe
Asia
America
3,409
698
283
519
876
3,265
695
275
480
780
Total operating revenue5,7855,495
The principal non-current assets of the Group are the aircraft fleet which is registered in New Zealand and employed across the
worldwide network. Accordingly, there is no reasonable basis for allocating the assets to geographical segments.

10
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR TO 30 JUNE 2019
AIR NEW ZEALAND ANNUAL FINANCIAL RESULTS 2019
2. Expenses
Additional information in respect of expenses included within the Statement of Financial Performance is as follows:
2019
$M
2018
$M
Superannuation expense
Audit and review of financial statements*
55
1
51
1
* Other fees were paid for assurance engagements including Greenhouse Gas inventory review of $18k (30 June 2018: $18k),
student fee protection audit of $5k (30 June 2018: $5k) and a US Passenger Facility Charge audit of $27k (30 June 2018: $46k).
Non-assurance fees were paid for tax compliance work undertaken for the Corporate Taxpayers Group of $17k (30 June 2018:
$17k), sustainability reporting of $15k (30 June 2018: $16k) and social impact assessment of $51k (30 June 2018: Nil). In the 2018
financial year, non-assurance fees of $88k were paid in relation to a global workforce research database and $5k for other services.
3 . Ta x a t i o n
Current and deferred taxation are calculated on the basis of tax rates enacted or substantively enacted at reporting
date, and are recognised in the income statement except when the tax relates to items charged or credited to other
comprehensive income, in which case the tax is also recognised in other comprehensive income.
Deferred income taxation is recognised in respect of temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements.
Deferred income tax assets and unused tax losses are only recognised to the extent that it is probable that future
taxable amounts will be available against which to utilise those temporary differences and losses.
Judgements are required about the application of income tax legislation. These judgements and assumptions are subject
to risk and uncertainty. There is therefore a possibility that changes in circumstances will alter expectations, which may
impact the amount of current and deferred tax assets and liabilities recognised in the Statement of Financial Position and
the amount of other tax losses and temporary differences not yet recognised. In such circumstances, some or all of the
carrying amounts of recognised tax assets and liabilities may require adjustment, resulting in a corresponding credit or
charge to the Statement of Financial Performance.
2019
$M
2018
$M
Current taxation expense
Current year
Adjustment for prior periods
(66)
1
(56)
-

Deferred taxation expense
Origination of temporary differences
(65)
(39)
(56)
(94)
Total taxation expense recognised in earnings (104)(150)

Reconciliation of effective tax rate
Earnings before taxation 3 74 540
Taxation at 28%
Adjustments
Non-deductible expenses
Non-taxable income
Equity settlements of long-term incentive obligations
(Under)/over provided in prior periods
Foreign tax paid
(105)
(3)
1
5
(1)
(1)
(151)
(4)
-
5
1
(1)
Taxation expense (104)(150)
The Group has $187 million of imputation credits as at 30 June 2019 (30 June 2018: $225 million).

11
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR TO AND AS AT 30 JUNE 2019
AIR NEW ZEALAND GROUP
3. Taxation (continued)
Deferred taxation
Deferred tax assets and liabilities are attributable to the following:
NON-AIRCRAFT
ASSETS
$M
AIRCRAFT
RELATED
$M
PROVISIONS
AND
ACCRUALS
$M
FINANCIAL
INSTRUMENTS
$M
PENSION
OBLIGATIONS
$M
LT I P
OBLIGATIONS
$M
TOTAL
$M
As at 1 July 2017
Amounts recognised in Other
Comprehensive Income
Reclassification*
Amounts recognised in earnings
15

-
-
-
302

-
(68)
91
(126)

-
68
3
3
21
-
-
(1)
-
-
-
-
-
-
-
193
21
-
94
As at 30 June 2018 15 325 (55) 24 (1)-308
Amounts recognised in Other
Comprehensive Income
Amounts recognised in earnings
-
(1)

-
49

-
(8)
(38)
-

(3)
1
(2)
(2)
(43)
39
As at 30 June 2019 143 74(63)(14)(3)(4)304
* Reclassification relates to a change in taxation legislation in relation to engine maintenance.
Deferred tax assets and liabilities are offset on the face of the Statement of Financial Position where they relate to entities within the
same taxation authority.
There are no unused tax losses available to carry forward against future taxable profits (30 June 2018: Nil).
4. Earnings per Share
Basic earnings per share is calculated by dividing the profit attributable to shareholders of the company by the weighted
average number of ordinary shares on issue during the year, excluding shares held as treasury stock. Diluted earnings per
share assumes conversion of all dilutive potential ordinary shares in determining the denominator.
2019
$M
2018
$M
Earnings for the purpose of basic and diluted earnings per share:
Net profit attributable to shareholders 270 390

Weighted average number of shares (in millions of shares)
Weighted average number of Ordinary Shares for basic earnings per share
Effect of dilutive ordinary shares:
- Performance rights and share options
1,123
6
1,123
11
Weighted average number of Ordinary Shares for diluted earnings per share1,1291,134

Basic earnings per share
Diluted earnings per share
24.0
23.9
3 4.7
34.4

12
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR TO AND AS AT 30 JUNE 2019
AIR NEW ZEALAND ANNUAL FINANCIAL RESULTS 2019
5. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, demand deposits, current accounts in banks net of overdrafts and other
short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
Cash flows are included in the Statement of Cash Flows net of Goods and Services Tax.
Cash and cash equivalents, as stated in the Statement of Cash Flows, are reconciled to the Bank and short-term deposits balance in
the Statement of Financial Position as follows:
2019
$M
2018
$M
Cash balances
Other short-term deposits and short-term bills
132
923
61
1,282
Total cash and cash equivalents 1,055 1,343

Reconciliation of Net Profit Attributable to Shareholders to Net Cash Flows from Operating Activities:
Net profit attributable to shareholders
Plus/(less) non-cash items:
Depreciation and amortisation
Loss on disposal of property, plant and equipment, intangibles and assets held for resale
Impairment (reversal)/expense on property, plant and equipment, intangibles and assets held
for resale
Share of earnings of associates
Movement on fuel derivatives
Foreign exchange losses
Other non-cash items
270
567
2

(4)
(37)
1
2
11
390
525
4

3
(33)
8
2
13

Net working capital movements:
Assets
Revenue in advance
Liabilities
812
19
65
90
912
(185)
146
158
174119
Net cash flow from operating activities 9861,031
6. Trade and Other Receivables
Trade and other receivables are recognised at cost less any provision for impairment. Bad debts are written-off when they
are considered to have become uncollectable.
2019
$M
2018
$M
Current
Trade and other receivables
Prepayments

440
124

424
152
564576

Non-current
Prepayments 64 77
6477

13
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
AS AT 30 JUNE 2019
AIR NEW ZEALAND GROUP
7. Inventories
Inventories are measured at the lower of cost and net realisable value. Cost is determined using the first-in, first-out (FIFO)
cost method. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable
selling expenses.
2019
$M
2018
$M
Engineering expendables
Consumable stores
65
16
59
16
8175

Held at cost

Held initially at cost
Less provision for inventory obsolescence
68
68
(55)
63
68
(56)
Held at net realisable value 13 12
8175
8. Other Assets
Amounts owing from related parties
Amounts owing from related parties are recognised at cost less any provision for impairment.
Contract work in progress
Contract work in progress is stated at cost plus the profit recognised to date, using the cost input method, less any
amounts invoiced to customers. Cost includes all expenses directly related to specific contracts and an allocation of direct
production overhead expenses incurred. Amounts are invoiced as work progresses in accordance with contractual terms,
either at periodic intervals or upon achievement of contractual milestones.
Interest-bearing assets
Interest-bearing assets are measured at amortised cost using the effective interest method, less any impairment.
Assets held for resale
Non-current assets are classified as held for resale if their carrying amount will be recovered through a sale transaction
rather than through continuing use. The sale must be highly probable and the asset available for immediate sale in its
present condition. Non-current assets held for resale are measured at the lower of the asset’s previous carrying amount
and its fair value less costs to sell.
2019
$M
2018
$M
Current
Amounts owing from associates
Contract work in progress
Interest-bearing assets
Assets held for resale
Other assets

1
35
-
1
19

1
45
7
1
14
5668

Non-current
Interest-bearing assets
Assets held for resale
Other assets
264
1
20
175
1
15
285191
The carrying value of the assets held for resale reflects the lower of their previous carrying value at the date of transfer or external
market assessments of the fair value, less costs to sell. Spares related to exited fleets are being marketed for sale and it is expected
that proceeds will be received over the next two years.
Interest-bearing assets include fixed rate Term Deposits and floating rate Certificate of Deposits that have been provided as security
over credit card obligations incurred by Air New Zealand. A minimum notification period of twelve months is required to be given
prior to the security deposits being released. These deposits are subject to potential offsetting under master netting arrangements.
In addition, the Group holds a Euro fixed rate deposit that matures in September 2030 held as part of an aircraft financing arrangement.
Fixed interest rates in the year to 30 June 2019 were between 2.72 percent and 3.10 percent (30 June 2018: 2.38 percent to 2.91
percent). The fair value of interest-bearing assets as at 30 June 2019 was $287 million (30 June 2018: $182 million).

14
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
AS AT 30 JUNE 2019
AIR NEW ZEALAND ANNUAL FINANCIAL RESULTS 2019
9. Property, Plant and Equipment
Owned assets
Items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation and accumulated
impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the item and in bringing the
asset to the location and working condition for its intended use. Cost may also include transfers from equity of any gains or
losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.
Where significant parts of an item of property, plant and equipment have different useful lives, they are accounted for
separately. A portion of the cost of an acquired aircraft is attributed to its service potential (reflecting the maintenance
condition of its engines) and is depreciated over the shorter of the period to the next major inspection event, overhaul, or the
remaining life of the asset. The cost of major engine overhauls for aircraft owned by the Group is capitalised and depreciated
over the period to the next expected inspection or overhaul.
Capital work in progress includes the cost of materials, services, labour and direct production overheads.
Finance leased assets
Leases under which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases.
All other leases are classified as operating leases. Upon initial recognition, assets held under finance leases are measured at
amounts equal to the lower of their fair value and the present value of the minimum lease payments at inception of the lease.
A corresponding liability is also established. Subsequent to initial recognition, the asset is accounted for in accordance with
the accounting policy applicable to that asset.
Manufacturing credits
Where the Group receives credits and other contributions from manufacturers in connection with the acquisition of certain
aircraft and engines, these are either recorded as a reduction to the cost of the related aircraft and engines, or offset against
the associated operating expense, according to the reason for which they were received.
Depreciation
Depreciation is calculated to write down the cost of assets on a straight line basis to an estimated residual value over their
economic lives as follows:
Airframes 18 years
Engines 6 – 15 years
Engine overhauls period to next overhaul
Aircraft specific plant and equipment (including simulators and spares) 10 – 25 years
Buildings 50 – 100 years
Non-aircraft specific leasehold improvements, plant, equipment, furniture and vehicles 2 – 10 years
As a result of global Trent 1000 engine issues, there was a significant change in the expected pattern of consumption of
future economic benefits embodied in those assets. The method of depreciation applied to the engine maintenance assets
was changed from a straight-line to usage basis approach over the period during which the engines were unserviceable.
The change was introduced with effect from 1 July 2018 and the impact on the financial statements for the year to 30 June
2019 was a reduction in depreciation expense of $13 million. At the time that the engines became serviceable again, the
method of depreciation reverted to a straight line basis.
AIRFRAMES,
ENGINES AND
SIMULATORS
$M
SPARE S
$M
PLANT AND
EQUIPMENT
$M
LAND AND
BUILDINGS
$M
CAPITAL WORK
IN PROGRESS
$M
TOTAL
$M
2019
Carrying value as at 1 July 2018 4,549

79140201 665,035
Additions
Disposals
Depreciation
Impairment reversal
Transfer
Foreign exchange differences (refer Note 22)
517
(25)
(444)
-
151
5
17
(6)
(8)
-
-
-
5
-
(34)
-
30
-
4
-
(38)
4
17
-
236
-
-
-
(198)
-
779
(31)
(524)
4
-
5
Carrying value as at 30 June 2019
Represented by:
Cost
Accumulated depreciation
Provision for impairment
4,753
7,117
(2,364)
-
82
156
( 74)
-
141
464
(323)
-
188
470
(268)
(14)
104
104
-
-
5,268
8,311
(3,029)
(14)
Carrying value as at 30 June 2019 4,753821411881045,268