Air New Zealand provides 2020 earnings guidance

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


MARKET ANNOUNCEMENT

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


18 June 2020
Air New Zealand provides 2020 earnings guidance

Air New Zealand is today providing an update on its earnings expectations for the 2020 financial
year.

As disclosed to the market on 9 March 2020, Air New Zealand suspended earnings guidance for
the 2020 financial year due to the significant uncertainty surrounding the duration, scale and impact
of the Covid-19 pandemic. The New Zealand Government’s recent move to Alert Level 1 has
enabled the airline to slowly restart the Domestic network, however revenue and earnings are
significantly lower than expected prior to the outbreak of Covid-19.

As the Company nears the end of its financial year on 30 June 2020, it is expecting to report an
underlying loss before Other Significant Items and taxation of up to $120 million for the 2020
financial year. This underlying earnings guidance excludes the impact of fluctuations in foreign
currency rates for the month of June, as well as any fuel price changes for the remainder of the
period, which are not expected to be material given the reduced level of flying.

In addition to the $120 million underlying loss, a number of Other Significant Items will impact the
2020 financial results. On 26 May 2020, the airline disclosed its expectations for these items for
the 2020 financial year. These expectations are summarised in the table below and remain
unchanged from the previous announcement subject to the inclusion of the non-cash gain on
unhedged foreign currency debt as discussed below.

The Company is now in a position to provide further information on the impact of unhedged foreign
currency debt resulting from the de-designation of revenue hedges due to a decline in expected
foreign currency revenues. The non-cash impact of currency movements on unhedged foreign
currency debt for the 2020 financial year was described in the airline’s 26 May disclosure. However
due to the translation risk related to the revaluation of these balances each month, a dollar impact
could not be estimated reliably and therefore was not was not provided at that time. Assuming
current exchange rates, a non-cash gain of $70 million is expected to be recognised within Other
Significant Items in the 2020 financial year, however this will change if exchange rates move
materially before the end of the financial year.

Other Significant Items impact for the 2020 Financial Year
Interim impact
(as previously reported in the
2020 Interim Financial
Results)
Estimated full year impact
(total expected to be reported in
2020 Financial Results subject to
audit process)
De-designation of hedges Nil ($85 million to $105 million)

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


MARKET ANNOUNCEMENT

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


Aircraft impairment charge Nil
($350 million to $450 million)
non-cash charge
Reorganisation costs $13 million charge ($140 million to $160 million)
Gain on sale from airport
slots
Nil Approximately $21 million gain
Disestablishment of fair value
hedges
($46 million)
non-cash charge
No change from 2020 Interim
Financial Results total
FX Revaluation of unhedged
foreign currency debt
Nil
~$70 million
non-cash gain based on current
foreign currency rates


It should be noted that these estimates are subject to sign off by Air New Zealand’s external
auditors and the Board.


Ends.

Leila Peters
GM Corporate Finance
leila.peters@airnz.co.nz
+64 21 743 057
Kim Cootes
Investor Relations Manager
kim.cootes@airnz.co.nz
+64 27 297 0244