2015 Databook

2015BOOK

ANNUAL

DATA

Air New Zealand Group

Air New Zealand Databook 2015 3

1. Introduction to Air New Zealand 4

2. Our strategic priorities 5

3. Air New Zealand network 6 New Zealand domestic and regional 6

Tasman and Pacific Islands 7

International long haul 8

Our network partnerships 9

4. Air New Zealand operating fleet 10

5. Shareholding structure and performance 12

6. Balance sheet structure and funding 13 Credit rating 13

Funding 13

Operating leases 14

Gearing 14

Dividend policy 15

Risk management 15

7. Earnings and dividend performance 16

8. Five year statistical review 17 Key Operating Statistics 17

Historical Summary of Financial Performance 18

Historical Summary of Financial Position 19

Historical Summary of Cash Flows 19

Financial Ratios 20

Historical Summary of Debt 20

9. Company history 21

10. Executive management team 22

11. Board profiles 24


Contents

Air New Zealand Databook 20154

Company description

The Air New Zealand Group (Air New Zealand) operates a global network that provides air passenger services and cargo transport services to, from and within New Zealand to more than 14 million passengers a year.

Air New Zealands strategic focus and competitive advantage lies within the Pacific Rim where the airlines network reach expands from New Zealand into Australia, Asia, and the Americas. Air New Zealand operates its own connection into London and through global alliance partners connect New Zealand to Europe and beyond, with over 3,600 flights, on average, each week to domestic and international destinations.

Air New Zealands consolidated operating revenue reached $4.9 billion in the 2015 financial year, generated by a fleet of over 100 aircraft and 11,000 employees.

As New Zealands national carrier and the first New Zealand experience for many overseas travellers, Air New Zealand is an integral part of the New Zealand tourism industry. Similarly, tourism is an important driver of Air New Zealands performance as the airline generates a significant portion of its revenue from overseas travellers.

Tourism contributes 17.4% of New Zealands total export earnings, employs 7% of New Zealands workforce and makes a total contribution to New Zealand GDP of $18.5 billion ($10.6 billion direct contribution and $7.9 billion indirect value-add of industries supporting tourism)1. In the year ended June 2015, inbound tourism into New Zealand increased 7%, and is expected to continue to grow in 2016.

International visitor arrivals to New Zealand

7%

for year ending 30 June 2015

An award winning airline

Air New Zealand is recognised as one of the worlds leading airlines. In 2005, Air New Zealand won the Air Transport Worlds (ATW) Phoenix Award, an award that recognised a commercial rebirth through a life-changing transformation. The airline then went on to win the ATW Passenger Service Award in 2008 and the ATW Public Relations Award in 2009. Going from strength to strength, Air New Zealand then received ATWs prestigious Airline of the Year award, for demonstrating consistent overall excellence, twice in three years in 2010 and 2012.

Air New Zealand continues to be an award winning airline with the following recent accolades:

2016www.airlineratings.com airline awards:

- Airline of the Year Award for the third year in a row

2015SkytraxWorldAirlineAwards:

- Worlds Best Premium Economy Class

- Best Premium Economy Class Airline Seat

- Best Premium Economy On-board Catering

2015WorldTravelAwards:

- Australasias Leading Airline for the seventh consecutive year

- Australasias Leading Airport Lounge for the Air New Zealand Lounge at Christchurch International Airport for the third year running.

Trading information

Air New Zealand is publicly traded on the NZX and ASX.

NZX Ticker symbol AIR

ASX Ticker symbol AIZ

1. Introduction to Air New Zealand

Source: Statistics New Zealand1. As at 31 March 2015. Source: Tourism Satellite Account.

Other markets32%

Australia43%

USA8%

China10%

UK7%


MarketsGrow and develop our markets

Grow total capacity 11% in FY16

Expand presence in the Pacific Rim Australia, Asia and the Americas

Increase network reach through alliance partners

Continually investigate new markets Ef ficiencySimplify the business to

improve operational efficiencies and drive down cost

Invest in modern, fuel efficient aircraft and simplify the fleet

Leverage growth to achieve economies of scale

Target further reduction in nominal CASK (excluding fuel price)

CustomerDeliver a consistent and

personalised customer experience across the entire journey

Dedicated to continuous customer innovation

Invest in world class products that our customers value

Provide improved seamless check in process

Increase Airpoints loyalty programme membership

PeopleGrow a high performance

culture and capability

Attract the best people to be part of our winning team

Uphold our strong brand and corporate reputation

Invest in our peoples development to drive performance

Operate a High Performance Engagement Charter with our

employee representatives

TechnologyUnleash digital transformation

Be a leading digital organisation in Australasia and one of the best

digital airlines globally

Optimise digital channels and tools to personalise the customer experience


2. Our strategic priorities


Sydney

Melbourne

Samoa

Tonga

FijiNiue

New Caledonia

Norfolk Island

Tahiti

Christchurch

Wellington

AucklandAdelaide

Perth

Brisbane

Cairns

Queenstown

Rarotonga

Honolulu

Sunshine Coast

Gold Coast

KerikeriWhangarei

Blenheim

Timaru

Hokitika

Invercargill

Nelson

Tauranga

Gisborne

Rotorua

TaupoNew Plymouth

WanganuiPalmerston North

Paraparaumu

Napier

Auckland

Queenstown

Christchurch

Dunedin

Hamilton

WellingtonDenpasar

Air New Zealand operates domestic flights within New Zealand and international flights to Australia, the Pacific Islands, Asia, the Americas and the United Kingdom.

Five year key operating statistics

GROUP JUNE 2015 JUNE 2014 JUNE 2013 JUNE 2012 JUNE 2011

Passengers carried (000s) 14,297 13,719 13,411 13,122 13,103

Available Seat Kilometres (ASK, millions) 35,601 33,396 33,167 32,618 32,353

Revenue Passenger Kilometres (RPK, millions) 29,934 28,078 27,733 27,013 26,996

Load Factor 84.1% 84.1% 83.6% 82.8% 83.4%

Yield (cents per RPK) 13.7 13.7 13.6 13.5 13.1

New Zealand domestic and regional

Air New Zealand operates one of the most comprehensive domestic and regional networks in the world with over 400 flights every day to 22 New Zealand destinations.

Our domestic jet network across the main centres in New Zealand (Auckland, Wellington, Christchurch, Dunedin and Queenstown) are operated by a fleet of 15 Airbus A320s (as at 31 December 2015).

Our turboprop network across the regional centres of New Zealand are operated by a fleet of 54 turboprops (as at 31 December 2015) including ATRs, Q300 and Beech 1900Ds. In 2016, the 19-seater Beech 1900Ds will be replaced with larger 50-seater Q300s and 68-seater ATRs.

DOMESTIC JUNE 2015 JUNE 2014 JUNE 2013 JUNE 2012 JUNE 2011




Load Factor 81.6% 81.1% 82.6% 81.5% 82.0%


3. Air New Zealand network



Tasman and Pacific Islands

Air New Zealand operates an expansive network to Australia and the Pacific Islands, with 43 flights every day to/from eight destinations in Australia and 15 flights every day to/from 10 destinations throughout the Pacific Islands.

Our international short haul network is operated by a fleet of Airbus A320s and Boeing widebody aircraft.

TASMAN AND PACIFIC ISLANDS JUNE 2015 JUNE 2014 JUNE 2013 JUNE 2012 JUNE 2011




Load Factor 84.4% 83.4% 83.5% 84.2% 83.5%


Sydney

Melbourne

Samoa

Tonga

FijiNiue

New Caledonia

Norfolk Island

Tahiti

Christchurch

Wellington

AucklandAdelaide

Perth

Brisbane

Cairns

Queenstown

Rarotonga

Honolulu

Sunshine Coast

Gold Coast

KerikeriWhangarei

Blenheim

Timaru

Hokitika

Invercargill

Nelson

Tauranga

Gisborne

Rotorua

TaupoNew Plymouth


Paraparaumu

Napier

Auckland

Queenstown

Christchurch

Dunedin

Hamilton

WellingtonDenpasar

Virgin AustraliaAir New Zealand has a 25.9% investment in

Virgin Australia. In addition, the two airlines have a revenue share alliance on the Tasman which allows both

airlines to code share across each others domestic networks in Australia and New Zealand.

Air New Zealands revenue share alliance with Virgin Australia on the Trans-Tasman results in a 51% market

share on the Tasman route.

Air New Zealand Chief Executive Officer, Christopher Luxon, is a member of the Virgin Australia Board of Directors. Virgin Australia

is equity accounted within the Air New Zealand financial statements.


London

Vancouver

Tokyo

Los Angeles

Auckland

Houston

Ho Chi Minh City

Beijing* San Francisco

Hong Kong

Shanghai

Singapore

(from June 2016)

KerikeriWhangarei

Blenheim

Timaru

Hokitika

Invercargill

Nelson

Tauranga

Gisborne

Rotorua

TaupoNew Plymouth


Paraparaumu

Napier

Auckland

Queenstown

Christchurch

Dunedin

Hamilton

Wellington

Buenos Aires

International long haul

New Zealand is the centre of the Pacific Rim and accordingly Air New Zealand operates a strong network within this region. The airlines fleet of Boeing 777-200s, Boeing 777-300s, Boeing 787-9s and Boeing 767-300ERs, along with a network of revenue share partnerships with other airlines, provides direct connections to 11 international long haul destinations (outside Australia and the Pacific Islands).

INTERNATIONAL LONGHAUL JUNE 2015 JUNE 2014 JUNE 2013 JUNE 2012 JUNE 2011




Load Factor 84.7% 85.4% 84.0% 82.4% 83.9%


Air New Zealand has seen significant growth in international long haul with passenger capacity and demand increasing 10% and 9%, respectively, in 2015, and is expecting 15% international long haul capacity growth in 2016.


London

Existing route

New route from December 2015 (Ho Chi Minh City from June 2016)

* Operated by Air China

Our network partnerships

Air New Zealand operates a network through a mixture of its own operations and with revenue share alliance and code share alliance partners:

Alliancesallowforthecreationofa global network between partners providing sales and distribution benefits.

Codeshareswithotherairlinesalso allow us to increase our reach across the Pacific Rim and beyond.

The airlines alliance partnerships are part of an alliance strategy that enables us to offer our customers access to a superior global network of flight connections and a range of benefits across some of the worlds top carriers.

The strategy also strengthens the airlines place in key markets. With alliance partners, Air New Zealand can jointly operate into markets where not otherwise possible. Alliance partners support each others distribution and presence in-market and provide a more seamless travel experience for connecting passengers.

Air New Zealands alliance relationships range from simple interline relationships through to deep revenue share alliances, and from destination-specific arrangements to those covering the globe.

At the global level, Air New Zealands Star Alliance membership allows us to offer connections across 28 major carriers, with world-wide status and privileges offered to our customers to over 1,330 destinations. This is achieved through bilateral interline and code share relationships with the other Star Alliance carriers, and through honouring of each others frequent flyer programmes under the Star Alliance status tier system.

Air New Zealand has revenue share alliances with Virgin Australia, Singapore Airlines and Cathay Pacific. In December 2015, our newest revenue share alliance with Air China commenced which provides greater connectivity between New Zealand and China with Shanghai-Auckland serviced by Air New Zealand and Beijing-Auckland serviced by Air China.

We maintain a range of other code share and interline relationships with other carriers into specific markets, in particular United Airlines, Air Canada, Aerolineas Argentina, Air India, ANA and Lufthansa.


Code share alliance partners

Revenue share alliance partners


Operating f leet on order as at 31 December 2015

NUMBER IN NUMBER Delivery dates (Calendar years)EXISTINGFLEET ON ORDER 2016 2017 2018 2019 2020

Boeing 787-9 Dreamliner 6 6 3 2 1 - -

Airbus A320 28 2 2 - - - -

Airbus A320/A321NEO - 13 - 1 5 7 -

ATR72-600 10 19 5 2 4 5 3

Air New Zealand has a modern and highly efficient fleet configured for its network and customers. The airline continues to simplify the fleet for greater operational efficiency and operate aircraft which are highly fuel efficient and with increased capacity and the best configuration for customers and cargo.

In the last 18 months, Air New Zealand has taken significant steps to grow the fleet with additional fuel efficient aircraft. In June 2014, Air New Zealand announced the purchase of 13 new Airbus A320/A321NEO aircraft to refresh its international narrow body fleet and additional A320s to grow its domestic operation.

In December 2014, Air New Zealand announced plans to take delivery of two additional Boeing 787-9 Dreamliner aircraft. These two additional aircraft are expected to be delivered in late 2017

and the latter half of 2018 and will take the total number of Dreamliners in the fleet to 12. Air New Zealand has another six Boeing 787-9 purchase options available.

In November 2015, Air New Zealand announced the purchase of 15 new ATR72-600 aircraft to operate its regional services. Four of the new aircraft will allow for further growth on regional Air New Zealand routes while 11 will replace the airlines ATR72-500 fleet.

4. Air New Zealand operating fleet

Operating f leet ownership and lease structure as at 31 December 2015

OWNED OPERATINGLEASE TOTAL

Boeing 777-300ER 4 3 7

Boeing 777-200ER 4 4 8

Boeing 787-9 Dreamliner 6 - 6

Boeing 767-300ER 5 - 5

Airbus A320 13 15 28

ATR72-600* 10 - 10

ATR72-500 11 - 11

Bombardier Q300 23 - 23

Beech 1900D 10 - 10

Totalfleet 86 22 108


9.1

7.87.4 7.5

6.76.2

Historical and projected seat weighted average f leet age as at 31 December 2015

AG

E IN

YE

AR

S

JUNE 2013

JUNE 2014

JUNE 2015

JUNE 2016

JUNE 2017

10

8

6

4

2

0

JUNE 2018

JUNE 2019

9.2

* Of the 10 ATR72-600 in the fleet as at 31 December 2015, 3 were delivered in December 2015, and will begin operating in January/February 2016.


Boeing 777-300ERNumber: 7Average Age: 3.7 yearsMaximum Passengers: 332Cruising Speed: 910 km/hrAverage Daily Utilisation: 15:02 hours


Boeing 787-9 DreamlinerNumber: 6Average Age: 0.8 yearsMaximum Passengers: 302Cruising Speed: 910 km/hrAverage Daily Utilisation: 14:02 hours


Airbus A320-200Number: 28Average Age: 6.5 yearsMaximum Passengers: 168 short haul or 171 domesticCruising Speed: 850 km/hrAverage Daily Utilisation: 9:23 short haul hours or 7:52 domestic hours

ATR72-500/72-600Number: 72-500: 11; 72-600:10 Average Age: 72-500: 15.0 years; 72-600: 1.4 years. Maximum Passengers: 68Cruising Speed: 518 km/hrAverage Daily Utilisation: 7:20 hours

Bombardier Q300Number: 23Average Age: 8.9 yearsMaximum Passengers: 50Cruising Speed: 520 km/hrAverage Daily Utilisation: 7:00 hours

Beech 1900DNumber: 10Average Age: 13.8 yearsMaximum Passengers:19Cruising Speed: 510 km/hrAverage Daily Utilisation: 4:02 hours

Operating fleet as at 31 December 2015 Configuration and statistics


Air New Zealand is listed on the New Zealand Stock Exchange (NZX) with the ticker symbol AIR.NZ and on the Australian Securities Exchange (ASX) with the ticker symbol AIZ.AX.

There are 1,122,371,992 Ordinary Shares on issue (excluding Treasury Stock), as at 25 January 2016. The New Zealand Government is the majority shareholder with 582,854,593 shares, or 52% of total issued capital.

The remaining shares are held by New Zealand institutional and retail investors and institutional shareholders primarily in the United States, Australia, Asia and the United Kingdom.

Air New Zealand has a robust average daily trading volume of approximately 1.3 million shares. There has been a strong share price momentum in recent years. Combined with growing dividends, Total Shareholder Return (TSR) has been 80.2%, 46.5% and 33.2% for the financial years 2013, 2014, and 2015, respectively.

5. Shareholding structure and performance

Share price performance vs key indicies


PE

RC

EN

T

DEC 2010 DEC 2011 DEC 2012 DEC 2013 DEC 2014

150%

100%

50%

0%

-50%

DEC 2015

AIR NEW ZEALAND NZX50 IndexNYSE ARCA Airline Index

97%

85% 91%


Credit rating

On 3 July 2015 Moodys upgraded Air New Zealand Limiteds (AIR NZ) senior unsecured issuer rating to Baa2 from Baa3. The outlook on the rating is stable. This puts Air New Zealand as one of the top investment grade rated airlines in the world.

Funding

Air New Zealand aircraft and associated aircraft assets are acquired via a mixture of ownership and lease structures.

As at 31 December 2015, 86 of Air New Zealands 108 aircraft fleet were effectively owned.

Secured borrowings

Air New Zealand funds the purchase of its aircraft and other aircraft related assets through secured bank borrowings from major international banks which specialise in airline and aircraft funding.

As at 30 June 2015, Air New Zealand had total secured bank borrowings of $512 million. All secured borrowings are secured over aircraft or aircraft related assets and are subject to floating interest rates.

Finance leases

As at 30 June 2015, Air New Zealand had total finance leases of $1,660 million.

Finance lease liabilities are secured over aircraft and aircraft related assets and are subject to both fixed and floating interest rates. Fixed interest rates as at 30 June 2015 ranged from 0.7% to 3.4%.

Purchase options are available on expiry or, if applicable under the lease agreement, on early termination of the finance leases. Finance leases are treated as owned aircraft.

Unsecured borrowings

As at 30 June 2015, Air New Zealand had NZX listed bonds of $150 million. The unsecured, unsubordinated fixed rate bonds have a maturity date of 15 November 2016 and a coupon rate of 6.9% payable semi-annually.

6. Balance sheet structure and funding

* Borrowings include secured borrowings, unsecured borrowings and finance lease liabilities.

** Operating leases are capitalised as aircraft operating lease commitments for the next 12 months multiplied by a factor of seven.

Borrowings* maturity profile as at 30 June 2015

1,200

1,000

800

600

400

200

0

NZ

$ M

ILLI

ON

Secured Borrowings

Unsecured Borrowings (Bonds)

Finance Leases

1-2 YEARS

418

2-5 YEARS

682

> 5 YEARS

969

253

< 1 YEAR

Gross debt as at 30 June

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

NZ

$ M

ILLI

ON

2,319

2011 2012

2,667

Borrowings* Operating Leases**

2013

2,574

2014

2,755

2015

3,645


Operating leases

As at 31 December 2015, 22 of Air New Zealands 108 aircraft fleet were under operating lease contracts. Payments made under operating leases (net of any incentives received) are recognised as an expense in the Statement of Financial Performance on a straight-line basis over the term of the lease.

For the year ended 30 June 2015, Air New Zealand recognised $159 million of operating lease expenses in relation to aircraft, and as at 30 June 2015, had $670 million future operating lease commitments in relation to aircraft.

For the purposes of net debt and gearing calculations, operating leases are capitalised as aircraft operating lease commitments for the next 12 months multiplied by a factor of seven.

Gearing

When calculating the level of gearing2, Net Debt includes secured and unsecured borrowings, finance leases, capitalised operating leases less funds on deposit and unrealised gains/losses on open debt derivatives.

As at 30 June 2015, gearing (including capitalised aircraft operating leases) was 52.4%. Air New Zealand targets a capital structure within the range of 45% to 55%.

2 Gearing defined as Net Debt/(Net Debt + Equity)


Gearing (includes capitalised aircraft operating leases)

GE

AR

ING

(%

)

JUNE 2011

JUNE 2012

JUNE 2013

JUNE 2014

60.0

55.0

50.0

45.0

40.0

35.0

30.0

JUNE 2015

GEARING (includes net capitalised aircraft operating leases)

GEARING Target minimum

GEARING Target maximum

46.7% 46.1%

39.3% 42.9%

52.4%


Dividend policy

The Air New Zealand Board of Directors (the Board) is committed to a Distribution Policy geared towards providing a consistent dividend stream to shareholders while maintaining financial flexibility through the business cycle.

Policy guidelines

The following policy guidelines form Air New Zealands Distribution Policy:

Dividenddeclarationswilltakeintoaccount current earnings, the medium term trading outlook, long term capital structure and requirements for investment in value creating projects.

Targetcapitalstructure(includingcapitalised aircraft operating leases as debt) is within the range of 45% to 55%.

Giventhecyclicalnatureoftheairlineindustry and the requirement to undertake significant fleet reinvestment programmes, Air New Zealand may, for periods, operate outside the target net gearing range.

Otherrelevanteconomicfactorsimpacting on the Air New Zealand Group.

Dividends are determined based on the financial performance of the relevant period and the gearing levels between these thresholds.

Risk management

Air New Zealand is subject to foreign currency, fuel price, interest rate and credit risks. These risks are managed with various financial instruments, applying a set of policies approved by the Board of Directors. Compliance with these policies is reviewed and reported monthly to the Board and is included as part of the internal audit programme. Group policy is not to enter, issue or hold financial instruments for speculative purposes.

Refer to the latest Air New Zealand Annual Report for a full description of financial risk management. The Annual Report discusses more specific risks and risk management applicable to Air New Zealand including fuel price risk and foreign exchange risk.

Fuel price risk

Fuel price risk is the risk of loss to Air New Zealand arising from adverse fluctuations in fuel prices.

Air New Zealand manages jet fuel price risk by using crude oil hedges mainly Brent Crude. Commodity risk management has the objective of giving Air New Zealand time to adjust and protecting the operating margin in the short term.

Any fuel price hedge term does not exceed 12 months. In general, the next four months of future fuel purchases are hedged to a minimum of 50% and then progressively reducing to zero by the eighth month. The maximum amount of hedges can be 80% for the next six months and then progressively falling to 20% in the 12th month.

On a quarterly basis, Air New Zealand discloses its fuel hedging position for the next 12 months.

Foreign currency risk

The Groups currency exposure primarily arises from operating activities, receiving ticket sales in foreign currencies and paying for fuel, aircraft leases and aircraft maintenance largely in USD. From capital activities, the company purchases fixed assets denominated in foreign currency on a regular basis and also has borrowings in foreign currency.

Air New Zealand manages currency risk through two methodologies:

Placementofhedgingcoveronidentified operating foreign currency exposures.

ManagementofUSDbalancesheetitems, mainly debt, by way of actual hedges, use of future foreign currency revenues, and aircraft values which are largely determined in USD.

Currency risk management has the objective to give the company time to adjust to changes in market circumstances.

The above policies are adhered to and monitored on a day to day operational basis, the Executive Management Team and the Board of Directors reserve the right to operate outside of these policy parameters from time to time and as required for the financial and operational benefit of Air New Zealand.


7. Earnings and dividend performance

Dividends (declared)

25

20

15

10

5

0

DIv

IDE

ND

(N

ZD

cE

NTS

PE

RS

hA

RE

)

2011 201420132012 2015

INTERIM FINAL SPECIAL

8.0

20.0

16.0

5.5 5.5

Ordinary dividend yield

5.76.3

5.8

6.6

DIv

IDE

ND

YIE

LD (

%)

2011 2012 2013 2014 2015

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0

4.4


Earnings before interest, taxation, depreciation and amortisation, and associate earnings (EBITDA)

1,000

800

600

400

200

0

NZ

$ M

ILLI

ON

2011 2014

829

20132012

506

720

2015

950

425

71

181

263

327

Net profit after taxation

NZ

$ M

ILLI

ON

2011 2012 2013 2014 2015

400

350

300

250

200

150

100

50

0

81


Key operating statisticsFor the year to 30 June

2015 2014 2013 2012 2011

Passengers Carried (000)Domestic International

Australia and Pacific Islands Asia* America and Europe

9,246

3,388642

1,021

8,920

3,277517

1,005

8,694

3,181596940

8,500

3,073652897

8,530

2,965662946

Total 5,051 4,799 4,717 4,622 4,573

Total Group 14,297 13,719 13,411 13,122 13,103

Available Seat Kilometres (m)DomesticInternational

Australia and Pacific IslandsAsia*America and Europe

5,592

10,8887,022

12,099

5,385

10,6225,656

11,733

5,108

10,2776,780

11,002

4,969

9,6947,495

10,460

4,904

9,3457,432

10,672

Total 30,009 28,011 28,059 27,649 27,449

Total Group 35,601 33,396 33,167 32,618 32,353

Revenue Passenger Kilometres (m)DomesticInternational


4,561

9,1845,784

10,405

4,370

8,8584,630

10,220

4,218

8,5805,4189,517

4,050

8,1645,9798,820

4,021

7,7996,0779,099

Total 25,373 23,708 23,515 22,963 22,975

Total Group 29,934 28,078 27,733 27,013 26,996

Passenger Load Factor (%)DomesticInternational


81.6

84.482.4

86.0

81.1

83.481.9

87.1

82.6

83.579.9

86.5

81.5

84.279.8

84.3

82.0

83.581.8

85.3

Total 84.6 84.7 83.8 83.1 83.7

Total Group 84.1 84.1 83.6 82.8 83.4

Group Employee Numbers (Full time equivalents) 10,196 10,546 10,336 10,453 10,861

* Asia included Hong Kong London flying up until March 2013.

New Zealand, Australia and Pacific Islands represent short haul operations. Asia, America and Europe represent long haul operations. Certain comparatives within the key operating statistics have been reclassified for comparative purposes, to ensure consistency with the current year.

8. Five year statistical review


Historical Summary of Financial PerformanceFor the year to 30 June

2015$M

2014$M

2013$M

2012$M

2011$M

Operating RevenuePassenger revenueCargoContract servicesOther revenue

4,113317258237

3,851287277237

3,765301310239

3,634298316235

3,525278329209

4,925 4,652 4,615 4,483 4,341

Operating ExpenditureLabourFuelMaintenanceAircraft operationsPassenger servicesSales and marketingForeign exchange gains/(losses)Other expenses

(1,193)(1,089)

(320)(466)(220)(303)

79(252)

(1,151)(1,120)(285)(424)(212)(280)

45(222)

(1,068)(1,204)

(302)(419)(222)(274)

7(236)

(1,050)(1,219)

(303)(390)(233)(270)

(68)(235)

(1,034)(1,084)

(311)(381)(242)(274)(118)(234)

(3,764) (3,649) (3,718) (3,768) (3,678)

Operating Earnings (excluding items below)Depreciation and amortisationRental and lease expenses

1,161(402)(211)

1,003(436)(174)

897(411)(177)

715(348)(209)

663(316)(238)

Earnings Before Finance Costs, Associates andTaxationFinance incomeFinance costs

548

56(108)

393

44(90)

309

37(91)

158

31(95)

10936

(72)

EarningsBeforeAssociatesandTaxationShare of earnings of associates (net of taxation)

496(22)

34711

255-

94-

73-

EarningsBeforeTaxationTaxation (expense)/credit

474(147)

358(95)

255(74)

94(23)

738

Net Profit Attributable to Shareholders of Parent Company

327

263

181

71

81

NormalisedEarningsBeforeTaxation* 496 332 255 91 75

NormalisedEarningsAfterTaxation* 343 244 181 69 82

Certain comparatives within the five year statistical review have been reclassified for comparative purposes, to ensure consistency with the current year. The Group adopted NZ IFRS 9 (2010) Financial Instruments and NZ IFRS 9 (2013) Hedge Accounting and amendments to NZ IFRS 9, NZ IFRS 7 and NZ IAS 39 on 1 July 2014. Comparatives have been restated for the 2014 financial year only in respect of the adopted standards and the amounts for the 2011 to 2013 financial years are as previously published.

* Normalised earnings represented earnings stated in compliance with NZ IFRS (Statutory Earnings) after excluding net movements on derivatives that hedge exposures in other financial periods. Normalised earnings was a non-IFRS financial performance measure that matches derivative gains or losses with the underlying hedged transaction, and represented the underlying performance of the business for the relevant period. Normalised earnings was reported within the Group annual financial statements and was subject to audit by the Groups external auditors.

Reconciliation of normalised earnings2015

$M2014

$M2013

$M2012

$M2011

$M

Earnings before taxation (NZ IFRS)Reverse net movements on derivatives that hedge exposures in other financial periods:

Fuel derivativesForeign exchange derivatives

474

202

358

(23)(3)

255

(2)2

94

(11)8

73

7(5)

Normalised earnings before taxation 496 332 255 91 75

Normalised earnings after taxation 343 244 181 69 82



Historical Summary of Financial PositionAs at 30 June

2015$M

2014$M

2013$M

2012$M

2011$M

Current AssetsBank and short term depositsOther current assets

1,321661

1,234593

1,150693

1,029658

860615

TotalcurrentAssets 1,982 1,827 1,843 1,687 1,475

Non-Current AssetsProperty, plant and equipmentOther non-current assets

4,061

732

3,279

744

2,933

820

3,090

668

2,714

713

TotalNon-currentAssets 4,793 4,023 3,753 3,758 3,427

TotalAssets 6,775 5,850 5,596 5,445 4,902

Current LiabilitiesNet debt1

Other current liabilities253

1,875190

1,682159

1,555157

1,544152

1,664

TotalcurrentLiabilities 2,128 1,872 1,714 1,701 1,816

Non-Current LiabilitiesNet debt1

Other non-current liabilities2,069

6131,543

5631,470

6111,537

5441,103

479

TotalNon-currentLiabilities 2,682 2,106 2,081 2,081 1,582

TotalLiabilities 4,810 3,978 3,795 3,782 3,398

Net Assets 1,965 1,872 1,801 1,663 1,504

TotalEquity 1,965 1,872 1,801 1,663 1,504

1 Net debt is comprised of bank overdraft, secured borrowings, bonds and finance lease liabilities.

Certain comparatives within the five year statistical review have been reclassified for comparative purposes, to ensure consistency with the current year. The Group adopted NZ IFRS 9 (2010) Financial Instruments and NZ IFRS 9 (2013) Hedge Accounting and amendments to NZ IFRS 9, NZ IFRS 7 and NZ IAS 39 on 1 July 2014. Comparatives have been restated for the 2014 financial year only in respect of the adopted standards and the amounts for the 2011 to 2013 financial years are as previously published in the annual report.

Historical Summary of Cash FlowsFor the year to 30 June

2015$M

2014$M

2013$M

2012$M

2011$M

Cash flow from operating activitiesCash flow from investing activitiesCash flow from financing activities

1,100(1,066)

53

730(727)

81

750(480)(147)

472(654)

349

466(846)

173

Increase/(decrease)incashholding 87 84 123 167 (207)

Totalcashandcashequivalents 1,321 1,234 1,150 1,027 860

The historical 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 26 August 2015, are available at www.airnzinvestor.com. The historical 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.


Financial RatiosAs at and for the year ended 30 June

2015 2014 2013 2012 2011

Profitability EBIT/RevenueEBITDRA/RevenueReturn on Equity1

Ordinary dividends declaredBasic Earnings Per Ordinary ShareFixed Cover2

Passenger Revenue/RPK

%%%

cpscps

timescents

10.723.616.616.029.2

4.413.7

8.7

21.614.010.023.9

4.613.7

6.7

19.410.08.0

16.53.9

13.6

3.5

15.94.25.56.52.6

13.5

2.5

15.35.45.57.52.4

13.1

Liquidity Operating Cash Flow Per Share3

cps

98.4

66.3

68.4

43.1

43.0

Balance Sheet Gearing (incl. net capitalised aircraft operating leases)4

Net Debt to EBITDRA (incl. net capitalised aircraft operating leases)5

Net Tangible Assets Per Share3

%

times

$

52.4

1.86

1.66

42.9

1.40

1.60

39.3

1.30

1.57

46.1

2.02

1.48

46.7

1.99

1.33

Shareholder value Closing Share Price as at 30 JuneWeighted Average Number of Ordinary SharesTotal Number of Ordinary SharesTotal Market CapitalisationTotal Shareholder Return

$

mm

$m%

2.55

1,1181,1222,86133.2

2.08

1,1011,1142,31846.5

1.49

1,0961,1041,639

80.2

0.86

1,0961,100

946 (19.2)

1.12

1,0841,0911,222

11.2

1. Net Profit After Tax/Closing Equity

2. EBITDRA/(Rental and Lease Expenses and Net Finance Costs)

3. Per-share measures based upon Ordinary Shares

4. Net Debt (including capitalised operating leases)/Net Debt plus Equity

5. Net Debt (including capitalised operating leases)/EBITDRA (Earnings before interest, taxation, depreciation and amortisation, and rental and lease expenses)

Certain comparatives within the five year statistical review have been reclassified for comparative purposes, to ensure consistency with the current year. The Group adopted NZ IFRS9 (2010) Financial Instruments and NZ IFRS 9 (2013) Hedge Accounting and amendments to NZ IFRS9, NZ IFRS7 and NZ IAS39 on 1 July 2014. Comparatives have been restated for the 2014 financial year only in respect of the adopted standards and the accounts for the 2011 to 2013 financial years are as previously published in the Annual Report.

Historical Summary of DebtAs at 30 June

2015$M

2014$M

2013$M

2012$M

2011$M

DebtSecured borrowingsUnsecured bondsFinance lease liabilitiesBank overdraft and short term borrowings

512150

1,660-

213150

1,370-

84

1501,395

-

97

1501,445

2

154-

1,101-

Bank and short term deposits

Net open derivatives held in relation to interest-bearing liabilities1

Non interest-bearing deposit (included within Other assets)

Interest bearing secured deposit (included within Other assets)

2,322

1,321

24

-

141

1,733

1,234

(10)

-

125

1,629

1,150

28

44

184

1,694

1,029

4

13

180

1,255

860

(28)

-

170

Net Debt

Net aircraft operating lease commitments2

Net Debt (including off Balance Sheet aircraft operating leases)

836

1,323

2,159

384

1,022

1,406

223

945

1,168

468

973

1,441

253

1,064

1,317

1. Unrealised gains/losses on open debt derivatives.

2. Net aircraft operating lease commitments for the next twelve months, multiplied by a factor of seven.



April 1940 Tasman Empire Airways Limited (TEAL) incorporated

April 1965 TEAL renamed Air New Zealand Limited

April 1978 Air New Zealand and National Airways Corporation (NAC) merge

April 1989 New Zealand Government privatises Air New Zealand

October 1989 Air New Zealand listed on the New Zealand Stock Exchange (NZX)

October 1996 Air New Zealand acquires 50% of Ansett Australia

March 1999 Air New Zealand becomes a member of the Star Alliance group

June 2000 Air New Zealand acquires remaining 50% of Ansett Australia

September 2001 Ansett Australia placed into voluntary administration due to downturn

January 2002 Air New Zealand recapitalised by New Zealand Government for $885m resulting in 82% government ownership

March 2011 May 2014 Air New Zealand purchased shares in Virgin Australia taking ownership to 25.9% as at 30 June 2015

July 2011 Revenue share alliance with Virgin Australia commenced

January 2013 Revenue share alliance with Cathay Pacific commenced

November 2013 New Zealand Government sells down its holding to 52%

January 2015 Revenue share alliance with Singapore Airlines commenced

December 2015 Revenue share alliance with Air China commenced

Expenditure classifications

Labour All salaries, wages and employee benefits

Fuel Fuel including hedging gains/losses

Maintenance Materials and services

Aircraft operations Airport dues, aircraft ground handling, line servicing, loading, air navigation and tech crew trip costs

Passenger services Passenger ground handling, meals, inflight services, cabin crew trip expenses, lounge expenses and security charges

Sales and marketing Commissions, advertising, promotions, marketing, FFP costs and distribution costs

Other expenses Safety, IT costs, legal and accounting, insurance, employee relations, property cost

Rental and lease expenses Aircraft and property operating lease rentals

9. Company history

Available seat kilometres (ASKs) The number of seats made available for sale multiplied by the distance flown (capacity)

Revenue passenger kilometres (RPKs) The number of revenue passengers carried multiplied by the distance flown (demand)

Passenger load factor RPKs as a percentage of ASKs

Utilisation Average hours flown per day

EBIT Earnings before interest and taxation expenses

EBITDRA Earnings before interest, taxation, depreciation, rentals and amortisation expenses

Glossary



Mr Christopher Luxon | CHIEF EXECUTIVE OFFICER

Christopher was appointed CEO of Air New Zealand in January 2013. Christopher had a significant international career across multiple markets with Unilever before joining the airline in May 2011 as Group General Manager, International Airline. Prior to joining Air New Zealand, he was President and Chief Executive Officer at Unilever Canada following an 18 year career at Unilever where he worked in New Zealand, Australia, Asia, Europe and North America. He is a Non-Executive Director for Virgin Australia Holdings Limited. Christopher was awarded the CEO of the year at the 2015 Deloitte Top 200 Awards.

10. Executive management team

Mr Rob McDonald | CHIEF FINANCIAL OFFICER

Rob was appointed as Chief Financial Officer of Air New Zealand in October 2004. Prior to that, Rob first held the position of Air New Zealand Group Financial Planning Manager from 1993 and was appointed Group Treasurer in 1995. Prior to joining Air New Zealand, Rob worked with Coopers and Lybrand in the corporate advisory and valuation practice from 1985. Rob is a Director of Contact Energy and an alternate Director for Christopher for Virgin Australia Holdings Limited. Rob was awarded the CFO of the year at the 2015 Deloitte Top 200 Awards.

Captain David Morgan | CHIEF FLIGHT OPERATIONS & SAFETY OFFICER

David joined Air New Zealand in 1985 and joined the Flight Operations management team in 1996. David has held various senior operational management positions and was appointed to the Executive in 2008. David is responsible for determining the Flight Operations policy, standards and procedures by which our aircraft are operated, is accountable for both operational and people safety and has responsibility for Air New Zealands sustainability programme. David sits on the Advisory Board of the Sustainable Business Council of New Zealand.

Mr Avi Golan | CHIEF DIGITAL OFFICER

Avi joined Air New Zealand in January 2016 and leads the airlines strategy to engage digitally with customers across multiple international markets and enhance the new revenue opportunities that digital brings and to drive customer innovation. Avi has held senior leadership positions in some of the most innovative companies globally across a range of industries, including Google, Barnes and Noble, Olive Software and Intuit.

Mr Stephen Jones | CHIEF STRATEGY, NETWORKS & ALLIANCES OFFICER

Stephen joined Air New Zealand in May 2001. Initially joining as VP, Investor Relations, Stephen has held a variety of General Manager strategy and operational roles. Stephen was appointed Chief Strategy, Networks & Alliances Officer for the Air New Zealand Group in January 2013. Prior to joining Air New Zealand Stephen spent 17 years in the oil and gas exploration and production industry in New Zealand and overseas. Stephen is a member of the Star Alliance Management Board.


Ms Lorraine Murphy | CHIEF PEOPLE OFFICER (Departing February 2016)

Lorraine joined Air New Zealand as Chief People Officer in 2013. Prior to joining Air New Zealand, Lorraine was Vice President of Human Resources International for Campbell Soup Company, providing leadership across key geographic regions such as Asia Pacific, Europe and Latin America. Her extensive international career in human resource leadership also includes senior human resources roles with Lion Nathan Australia, the Australian Gas Light Company, and global chemical company ICI.

MrcamWallace | CHIEF SALES & COMMERCIAL OFFICER

Appointed to Chief Sales and Commercial Officer in January 2014, Cam is responsible for managing over $4 billion of the groups passenger and cargo revenue sourced primarily from the New Zealand, Australian, the United States, Chinese, Japanese and European markets. Since joining the airline in 2001, Cam has held a number of senior positions within the organisation and prior to his current role was Group General Manager New Zealand & Pacific Islands.

Mr Bruce Parton | CHIEF OPERATIONS OFFICER

Bruce joined Air New Zealand in 1996. His roles have included Group General Manager Australasia, Logistics and Components management at ANZES, General Manager of Operations, General Manager of the Pacific Airline, and General Manager Domestic Jet. Prior to joining Air New Zealand, Bruce held senior logistics positions for five years with Coca-Cola in London, and three years with Tegel Foods in New Zealand.

MrMike Tod | CHIEF MARKETING & CUSTOMER OFFICER

Mike joined Air New Zealand in 2003 and has responsibility for Air New Zealands global marketing and customer experience as well as Corporate Affairs, Government Affairs and Industry Relations, Sponsorship and Community Partnership programmes. Prior to joining Air New Zealand, Mike was Assistant to the Chief Executive Officer and Shareholder Communications Manager at Fonterra. Mike sits on Star Alliances Marketing Strategy Committee.


Antony (Tony)carter

CHAIRMAN

Tony is Chairman of Fisher & Paykel Healthcare Limited, a director of Fletcher Building Limited and ANZ Bank New Zealand Limited and Independent Chairman of Blues LLP. Tony held senior positions at Foodstuffs (New Zealand) Limited from 1994 including Managing Director from 2001 until he retired in December 2010. Tony was named Chairperson of the Year at the 2014 Deloitte Top 200 Awards.

Janice (Jan) Dawson DEPUTY CHAIR

Jan is a director of AIG Insurance New Zealand Limited, Beca Group Limited, Meridian Energy Limited and Chairman of Westpac New Zealand Limited. Jan was a partner of KPMG for 30 years, specialising in audit and risk advisory, and the Chair and Chief Executive of KPMG New Zealand from 2006 until 2011. Jan was named Chartered Accountant of the Year in 2011 by the New Zealand Institute of Chartered Accountants.

Paul Bingham DIRECTOR

Paul is the Managing Director of Black Cat Cruises Limited, a tourism operation based at Banks Peninsula, near Christchurch. His tourism background includes senior roles at Tourism Holdings Limited and Air New Zealand Limited, and he is a previous director of Tourism New Zealand and Chair of Christchurch & Canterbury Tourism.

11. Board profiles

Robert (Rob) Jager

DIRECTOR

Rob is Chairman of the Shell Companies in New Zealand and General Manager, Shell Todd Oil Services. He is also the Chair of the Workplace Health and Safety Review Taskforce in New Zealand. Rob has over 30 years experience in the oil and gas industry, working for Shell in a variety of operational, management and governance roles in New Zealand and overseas.

Linda Jenkinson

DIRECTOR

Linda is the Chair and Co-Founder of LesConcierges Inc., a San Francisco based global concierge services and solutions company that services some of the worlds leading customer facing businesses. Linda is currently a member of the Global Women Trust Advisory Board, a director of Massey University US Foundation and a director of TheGrid and was named one of the most influential women in the Bay Area for 2014 by the San Francisco Business Times.

Jonathan Mason DIRECTOR

Jonathan has more than 30 years experience in the financial sector, with an emphasis on emerging markets. Prior to joining Air New Zealands Board in March 2014, he was Fonterra Co-operative Groups Chief Financial Officer. Jonathan has had governance experience in both New Zealand and the United States. He is currently a director of Vector Limited, Westpac New Zealand Limited and Zespri and also serves as an Adjunct Professor of Management at the University of Auckland, specialising in international finance.


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2015 Databook

Documents

Transcript of 2015 Databook