DATA BOOK 2015 - Air New Zealand
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ANNUAL DATA BOOK 2015
Air New Zealand Group
Contents
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
Air New Zealand Databook 2015 3
Air New Zealand Group
1. Introduction to Air New Zealand
Company description An award winning airline
The Air New Zealand Group Air New Zealand is recognised as one
(‘Air New Zealand’) operates a global of the world’s leading airlines. In 2005,
network that provides air passenger Air New Zealand won the Air Transport
services and cargo transport services to, World’s (ATW) Phoenix Award, an award
from and within New Zealand to more than that recognised “a commercial rebirth
14 million passengers a year. through a life-changing transformation”.
The airline then went on to win the
Air New Zealand’s strategic focus and ATW Passenger Service Award in 2008
competitive advantage lies within the and the ATW Public Relations Award in
Pacific Rim where the airline’s network 2009. Going from strength to strength,
reach expands from New Zealand Air New Zealand then received ATW’s
into Australia, Asia, and the Americas. prestigious Airline of the Year award,
Air New Zealand operates its own for demonstrating consistent overall
connection into London and through excellence, twice in three years in 2010
global alliance partners connect New and 2012.
Zealand to Europe and beyond, with over
3,600 flights, on average, each week to Air New Zealand continues to be an
domestic and international destinations. award winning airline with the following
recent accolades:
Air New Zealand’s consolidated operating
revenue reached $4.9 billion in the 2015 • 2016 www.airlineratings.com
financial year, generated by a fleet of over airline awards:
100 aircraft and 11,000 employees. - Airline of the Year Award for the third
year in a row
As New Zealand’s national carrier and the
first New Zealand experience for many • 2015 Skytrax World Airline Awards:
overseas travellers, Air New Zealand is an - World’s Best Premium Economy Class
integral part of the New Zealand tourism - Best Premium Economy Class
industry. Similarly, tourism is an important Airline Seat
driver of Air New Zealand’s performance as
the airline generates a significant portion of - Best Premium Economy On-board
its revenue from overseas travellers. Catering
• 2015 World Travel Awards:
Tourism contributes 17.4% of New Zealand’s
total export earnings, employs 7% of - Australasia’s Leading Airline for the
New Zealand’s workforce and makes a total seventh consecutive year
contribution to New Zealand GDP of $18.5 - Australasia’s Leading Airport Lounge
billion ($10.6 billion direct contribution and for the Air New Zealand Lounge at
$7.9 billion indirect value-add of industries Christchurch International Airport for
supporting tourism)1. In the year ended June the third year running.
2015, inbound tourism into New Zealand
increased 7%, and is expected to continue
to grow in 2016. Trading information
International visitor
arrivals to New Zealand
Air New Zealand
is publicly traded on
the NZX and ASX.
7%
for year ending 30 June 2015
NZX Ticker symbol
AIR
ASX Ticker symbol
AIZ
USA Other markets
8% 32%
UK
7%
China Australia
10% 43%
Source: Statistics New Zealand
1. As at 31 March 2015. Source: Tourism Satellite Account.
4 Air New Zealand Databook 2015
2. Our strategic priorities
Markets
Grow 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 Efficiency
Simplify the business to
improve operational efficiencies
and drive down cost
• Invest in modern, fuel efficient aircraft
and simplify the fleet
• Leverage growth to achieve
Customer economies of scale
• Target further reduction in nominal
Deliver a consistent and CASK (excluding fuel price)
personalised customer experience
across the entire journey
• Dedicated to continuous
customer innovation
• Invest in world class products
that our customers value
• Provide improved seamless
People
check in process
Grow a high performance
• Increase Airpoints™ loyalty culture and capability
programme membership
• Attract the best people to be part
of our winning team
• Uphold our strong brand and
corporate reputation
Technology • Invest in our people’s development
to drive performance
Unleash digital transformation • Operate a High Performance
Engagement Charter with our
• Be a leading digital organisation employee representatives
in Australasia and one of the best
digital airlines globally
• Optimise digital channels and tools
to personalise the customer experience
Air New Zealand Databook 2015 5
Air New Zealand Group
3. Air New Zealand network
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 Kerikeri
and regional Whangarei
Auckland
Air New Zealand operates one of the Hamilton Tauranga
most comprehensive domestic and Rotorua
regional networks in the world with over Taupo Gisborne
400 flights every day to 22 New Zealand New Plymouth
destinations. Napier
Wanganui
Palmerston North
Our domestic jet network across the Paraparaumu
main centres in New Zealand (Auckland, Nelson
Wellington, Christchurch, Dunedin and Blenheim Wellington
Queenstown) are operated by a fleet of 15
Airbus A320s (as at 31 December 2015). Hokitika
Our turboprop network across the Christchurch
regional centres of New Zealand are
Timaru
operated by a fleet of 54 turboprops (as
at 31 December 2015) including ATRs, Queenstown
Q300 and Beech 1900Ds. In 2016, Dunedin
the 19-seater Beech 1900Ds will be
replaced with larger 50-seater Q300s and Invercargill
68-seater ATRs.
DOMESTIC JUNE 2015 JUNE 2014 JUNE 2013 JUNE 2012 JUNE 2011
Passengers carried (‘000s) 9,246 8,920 8,694 8,500 8,530
Available Seat Kilometres (ASK, millions) 5,592 5,385 5,108 4,969 4,904
Revenue Passenger Kilometres (RPK, millions) 4,561 4,370 4,218 4,050 4,021
Load Factor 81.6% 81.1% 82.6% 81.5% 82.0%
Yield (cents per RPK) 28.6 27.9 27.2 28.7 28.1
6 Air New Zealand Databook 2015
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
Passengers carried (‘000s) 3,388 3,277 3,181 3,073 2,965
Available Seat Kilometres (ASK, millions) 10,888 10,622 10,277 9,694 9,345
Revenue Passenger Kilometres (RPK, millions) 9,184 8,858 8,580 8,164 7,799
Load Factor 84.4% 83.4% 83.5% 84.2% 83.5%
Yield (cents per RPK) 11.9 11.7 12.0 11.8 11.6
Virgin Australia
Air 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 other’s domestic
networks in Australia and New Zealand.
Air New Zealand’s revenue share alliance with Virgin
Australia on the Trans-Tasman results in a 51% market
Honolulu
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.
Denpasar
Cairns Samoa Rarotonga
Fiji
Niue Tahiti
New Caledonia Tonga
Sunshine Coast
Brisbane Norfolk Island
Gold Coast
Perth
Adelaide Sydney
Auckland
Melbourne
Wellington
Christchurch
Queenstown
Air New Zealand Databook 2015 7
Air New Zealand Group
International long haul
New Zealand is the centre of the Pacific Air New Zealand has seen significant
Rim and accordingly Air New Zealand growth in international long haul with
operates a strong network within this passenger capacity and demand
region. The airline’s fleet of Boeing 777- increasing 10% and 9%, respectively, in
200s, Boeing 777-300s, Boeing 787-9s 2015, and is expecting 15% international
and Boeing 767-300ERs, along with a long haul capacity growth in 2016.
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
Passengers carried (‘000s) 1,663 1,522 1,536 1,549 1,608
Available Seat Kilometres (ASK, millions) 19,121 17,389 17,782 17,955 18,104
Revenue Passenger Kilometres (RPK, millions) 16,189 14,850 14,935 14,799 15,176
Load Factor 84.7% 85.4% 84.0% 82.4% 83.9%
Yield (cents per RPK) 10.6 10.7 10.6 10.2 9.8
Vancouver
Beijing*
San Francisco
London
Tokyo
Los Angeles
Shanghai
Houston
Hong Kong
Ho Chi Minh City
(from June 2016)
Singapore
Buenos Aires
Auckland
Existing route
New route from December 2015
(Ho Chi Minh City from June 2016)
* Operated by Air China
8 Air New Zealand Databook 2015
Our network Revenue share Code share
partnerships alliance partners alliance partners
Air New Zealand operates a network
through a mixture of its own operations
and with revenue share alliance and code
share alliance partners:
• Alliances allow for the creation of
a global network between partners
providing sales and distribution benefits.
• Code shares with other airlines also
allow us to increase our reach across
the Pacific Rim and beyond.
The airline’s 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
world’s top carriers.
The strategy also strengthens the airline’s
place in key markets. With alliance
partners, Air New Zealand can jointly
operate into markets where not otherwise
possible. Alliance partners support each
other’s distribution and presence in-market
and provide a more seamless travel
experience for connecting passengers.
Air New Zealand’s 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 Zealand’s
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
other’s 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.
Air New Zealand Databook 2015 9
Air New Zealand Group
4. Air New Zealand operating fleet
Air New Zealand has a modern and
highly efficient fleet configured for
and the latter half of 2018 and will
take the total number of Dreamliners
Historical and projected seat
its network and customers. The in the fleet to 12. Air New Zealand weighted average f leet age
– as at 31 December 2015
airline continues to simplify the fleet has another six Boeing 787-9 purchase
for greater operational efficiency options available. 10
and operate aircraft which are highly 9.2 9.1
fuel efficient and with increased In November 2015, Air New Zealand
capacity and the best configuration announced the purchase of 15 new
7.8
for customers and cargo. ATR72-600 aircraft to operate its
regional services. Four of the new
8
7.4 7.5
In the last 18 months, Air New Zealand aircraft will allow for further growth 6.7
has taken significant steps to grow on regional Air New Zealand routes 6.2
6
the fleet with additional fuel efficient while 11 will replace the airline’s
AGE IN YEARS
aircraft. In June 2014, Air New Zealand ATR72-500 fleet.
announced the purchase of 13 new
Airbus A320/A321NEO aircraft to 4
refresh its international narrow body
fleet and additional A320s to grow its
domestic operation.
2
In December 2014, Air New Zealand
announced plans to take delivery of
two additional Boeing 787-9 Dreamliner
aircraft. These two additional aircraft are 0
expected to be delivered in late 2017 JUNE JUNE JUNE JUNE JUNE JUNE JUNE
2013 2014 2015 2016 2017 2018 2019
Operating f leet ownership and lease structure – as at 31 December 2015
OWNED OPERATING LEASE 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
Total fleet 86 22 108
Operating f leet on order – as at 31 December 2015
NUMBER IN NUMBER Delivery dates (Calendar years)
EXISTING FLEET 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
* 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.
10 Air New Zealand Databook 2015Operating fleet – as at 31 December 2015 Configuration and statistics
Boeing 777-300ER
Number: 7
Average Age: 3.7 years
Maximum Passengers: 332
Cruising Speed: 910 km/hr
Average Daily Utilisation: 15:02 hours
Boeing 777-200ER
Number: 8
Average Age: 9.7 years
Maximum Passengers: 312
Cruising Speed: 910 km/hr
Average Daily Utilisation: 12:04 hours
Boeing 787-9 Dreamliner
Number: 6
Average Age: 0.8 years
Maximum Passengers: 302
Cruising Speed: 910 km/hr
Average Daily Utilisation: 14:02 hours
Boeing 767-300ER
Number: 5
Average Age: 20.3 years
Maximum Passengers: 230
Cruising Speed: 870 km/hr
Average Daily Utilisation: 10:53 hours
Airbus A320-200
Number: 28
Average Age: 6.5 years
Maximum Passengers: 168 short haul or 171 domestic
Cruising Speed: 850 km/hr
Average Daily Utilisation: 9:23 short haul hours or
7:52 domestic hours
ATR 72-500 / 72-600
Number: 72-500: 11; 72-600:10
Average Age: 72-500: 15.0 years;
72-600: 1.4 years.
Maximum Passengers: 68
Cruising Speed: 518 km/hr
Average Daily Utilisation: 7:20 hours
Bombardier Q300
Number: 23
Average Age: 8.9 years
Maximum Passengers: 50
Cruising Speed: 520 km/hr
Average Daily Utilisation: 7:00 hours
Beech 1900D
Number: 10
Average Age: 13.8 years
Maximum Passengers:19
Cruising Speed: 510 km/hr
Average Daily Utilisation: 4:02 hours
Air New Zealand Databook 2015 11Air New Zealand Group
5. Shareholding structure and performance
Air New Zealand is listed on the New Air New Zealand has a robust average
Zealand Stock Exchange (NZX) with daily trading volume of approximately
the ticker symbol AIR.NZ and on the 1.3 million shares. There has been
Australian Securities Exchange (ASX) a strong share price momentum in
with the ticker symbol AIZ.AX. recent years. Combined with growing
dividends, Total Shareholder Return
There are 1,122,371,992 Ordinary Shares (TSR) has been 80.2%, 46.5% and
on issue (excluding Treasury Stock), as 33.2% for the financial years 2013,
at 25 January 2016. The New Zealand 2014, and 2015, respectively.
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.
Share price performance vs key indicies 97%
150%
100%
PERCENT
50%
0%
85% 91%
-50%
DEC 2010 DEC 2011 DEC 2012 DEC 2013 DEC 2014 DEC 2015
AIR NEW ZEALAND NYSE ARCA Airline Index NZX50 Index
12 Air New Zealand Databook 20156. Balance sheet structure and funding
Credit rating Gross debt
as at 30 June
On 3 July 2015 Moody’s upgraded
Air New Zealand Limited’s (AIR NZ)
4,000
3,645
senior unsecured issuer rating to Baa2 3,500
from Baa3. The outlook on the rating is
stable. This puts Air New Zealand as one 3,000
2,667 2,755
of the top investment grade rated airlines 2,574
in the world. 2,500 2,319
NZ$ MILLION
2,000
Funding 1,500
1,000
Air New Zealand aircraft and associated 500
aircraft assets are acquired via a mixture
0
of ownership and lease structures.
2011 2012 2013 2014 2015
As at 31 December 2015, 86 of
Borrowings* Operating
Air New Zealand’s 108 aircraft fleet Leases**
were effectively owned.
Secured borrowings
Air New Zealand funds the purchase Borrowings* maturity profile
of its aircraft and other aircraft related as at 30 June 2015
assets through secured bank borrowings
from major international banks which 1,200
specialise in airline and aircraft funding.
As at 30 June 2015, Air New Zealand
1,000
969
had total secured bank borrowings of
$512 million. All secured borrowings are
secured over aircraft or aircraft related
800
NZ$ MILLION
assets and are subject to floating 682
interest rates.
600
Finance leases
418
As at 30 June 2015, Air New Zealand 400
had total finance leases of $1,660 million.
253
Finance lease liabilities are secured over 200
aircraft and aircraft related assets and are
subject to both fixed and floating interest
rates. Fixed interest rates as at 30 June 0
2015 ranged from 0.7% to 3.4%. < 1 year 1-2 years 2-5 years > 5 years
Purchase options are available on Secured Unsecured Finance
expiry or, if applicable under the lease Borrowings Borrowings Leases
agreement, on early termination of the (Bonds)
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.
* 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.
Air New Zealand Databook 2015 13Air New Zealand Group
Operating leases Gearing
As at 31 December 2015, 22 of When calculating the level of gearing2,
Air New Zealand’s 108 aircraft fleet Net Debt includes secured and unsecured
were under operating lease contracts. borrowings, finance leases, capitalised
Payments made under operating operating leases less funds on deposit
leases (net of any incentives received) and unrealised gains/losses on open
are recognised as an expense in the debt derivatives.
Statement of Financial Performance
on a straight-line basis over the term As at 30 June 2015, gearing (including
of the lease. capitalised aircraft operating leases)
was 52.4%. Air New Zealand targets
For the year ended 30 June 2015, a capital structure within the range of
Air New Zealand recognised $159 45% to 55%.
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 (includes capitalised aircraft operating leases)
60.0
55.0
50.0 52.4%
46.7% 46.1%
gearing (%)
45.0
39.3% 42.9%
40.0
35.0
30.0
JUNe JUNe JUNe JUNe JUNe
2011 2012 2013 2014 2015
Gearing Gearing Gearing
(includes net capitalised Target minimum Target maximum
aircraft operating leases)
2
Gearing defined as Net Debt/(Net Debt + Equity)
14 Air New Zealand Databook 2015Dividend policy
The Air New Zealand Board of Directors Fuel price risk
(the Board) is committed to a Distribution
Policy geared towards providing a Fuel price risk is the risk of loss to
consistent dividend stream to shareholders Air New Zealand arising from adverse
while maintaining financial flexibility fluctuations in fuel prices.
through the business cycle. Air New Zealand manages jet fuel price
risk by using crude oil hedges mainly Brent
Policy guidelines Crude. Commodity risk management has
the objective of giving Air New Zealand
The following policy guidelines form time to adjust and protecting the operating
Air New Zealand’s Distribution Policy: margin in the short term.
• Dividend declarations will take into Any fuel price hedge term does not
account current earnings, the medium exceed 12 months. In general, the next
term trading outlook, long term four months of future fuel purchases
capital structure and requirements for are hedged to a minimum of 50% and
investment in value creating projects. then progressively reducing to zero by
• Target capital structure (including the eighth month. The maximum amount
capitalised aircraft operating leases of hedges can be 80% for the next six
as debt) is within the range of 45% months and then progressively falling to
to 55%. 20% in the 12th month.
• Given the cyclical nature of the airline On a quarterly basis, Air New Zealand
industry and the requirement to discloses its fuel hedging position for the
undertake significant fleet reinvestment next 12 months.
programmes, Air New Zealand may, for
periods, operate outside the target net
gearing range. Foreign currency risk
• Other relevant economic factors The Group’s currency exposure primarily
impacting on the Air New Zealand Group. arises from operating activities, receiving
Dividends are determined based on the ticket sales in foreign currencies and
financial performance of the relevant paying for fuel, aircraft leases and aircraft
period and the gearing levels between maintenance largely in USD. From capital
these thresholds. activities, the company purchases fixed
assets denominated in foreign currency on
a regular basis and also has borrowings in
foreign currency.
Risk management Air New Zealand manages currency risk
through two methodologies:
Air New Zealand is subject to foreign • Placement of hedging cover on
currency, fuel price, interest rate and identified operating foreign currency
credit risks. These risks are managed with exposures.
various financial instruments, applying a • Management of USD balance sheet
set of policies approved by the Board of items, mainly debt, by way of actual
Directors. Compliance with these policies hedges, use of future foreign currency
is reviewed and reported monthly to the revenues, and aircraft values which are
Board and is included as part of the largely determined in USD.
internal audit programme. Group policy
is not to enter, issue or hold financial Currency risk management has the
instruments for speculative purposes. objective to give the company time to
adjust to changes in market circumstances.
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.
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.
Air New Zealand Databook 2015 15Air New Zealand Group
7. Earnings and dividend performance
Earnings before interest, taxation,
depreciation and amortisation, Net profit after taxation
and associate earnings (EBITDA)
1,000 950 400
829 350
327
800
720 300
263
250
600
NZ$ MILLION
NZ$ MILLION
506
425 200 181
400
150
100 81 71
200
50
0 0
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015
Dividends (declared) Ordinary dividend yield
25 7.0% 6.6
6.3
20.0 6.0% 5.7 5.8
20
Dividend (NZD cents per share)
16.0 5.0%
4.4
dividend yield (%)
15
4.0%
3.0%
10
8.0
5.5 5.5 2.0%
5
1.0%
0 0
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015
INTERIM FINAL SPECIAL
16 Air New Zealand Databook 20158. Five year statistical review
Key operating statistics
For the year to 30 June
2015 2014 2013 2012 2011
Passengers Carried (000)
Domestic 9,246 8,920 8,694 8,500 8,530
International
Australia and Pacific Islands 3,388 3,277 3,181 3,073 2,965
Asia* 642 517 596 652 662
America and Europe 1,021 1,005 940 897 946
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)
Domestic 5,592 5,385 5,108 4,969 4,904
International
Australia and Pacific Islands 10,888 10,622 10,277 9,694 9,345
Asia* 7,022 5,656 6,780 7,495 7,432
America and Europe 12,099 11,733 11,002 10,460 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)
Domestic 4,561 4,370 4,218 4,050 4,021
International
Australia and Pacific Islands 9,184 8,858 8,580 8,164 7,799
Asia* 5,784 4,630 5,418 5,979 6,077
America and Europe 10,405 10,220 9,517 8,820 9,099
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 (%)
Domestic 81.6 81.1 82.6 81.5 82.0
International
Australia and Pacific Islands 84.4 83.4 83.5 84.2 83.5
Asia* 82.4 81.9 79.9 79.8 81.8
America and Europe 86.0 87.1 86.5 84.3 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.
Air New Zealand Databook 2015 17Air New Zealand Group
Historical Summary of Financial Performance
For the year to 30 June
2015 2014 2013 2012 2011
$M $M $M $M $M
Operating Revenue
Passenger revenue 4,113 3,851 3,765 3,634 3,525
Cargo 317 287 301 298 278
Contract services 258 277 310 316 329
Other revenue 237 237 239 235 209
4,925 4,652 4,615 4,483 4,341
Operating Expenditure
Labour (1,193) (1,151) (1,068) (1,050) (1,034)
Fuel (1,089) (1,120) (1,204) (1,219) (1,084)
Maintenance (320) (285) (302) (303) (311)
Aircraft operations (466) (424) (419) (390) (381)
Passenger services (220) (212) (222) (233) (242)
Sales and marketing (303) (280) (274) (270) (274)
Foreign exchange gains/(losses) 79 45 7 (68) (118)
Other expenses (252) (222) (236) (235) (234)
(3,764) (3,649) (3,718) (3,768) (3,678)
Operating Earnings (excluding items below) 1,161 1,003 897 715 663
Depreciation and amortisation (402) (436) (411) (348) (316)
Rental and lease expenses (211) (174) (177) (209) (238)
Earnings Before Finance Costs, Associates
and Taxation 548 393 309 158 109
Finance income 56 44 37 31 36
Finance costs (108) (90) (91) (95) (72)
Earnings Before Associates and Taxation 496 347 255 94 73
Share of earnings of associates (net of taxation) (22) 11 - - -
Earnings Before Taxation 474 358 255 94 73
Taxation (expense)/credit (147) (95) (74) (23) 8
Net Profit Attributable to Shareholders of
Parent Company 327 263 181 71 81
Normalised Earnings Before Taxation* 496 332 255 91 75
Normalised Earnings After Taxation* 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 Group’s external auditors.
2015 2014 2013 2012 2011
Reconciliation of normalised earnings $M $M $M $M $M
Earnings before taxation (NZ IFRS) 474 358 255 94 73
Reverse net movements on derivatives that hedge
exposures in other financial periods:
Fuel derivatives 20 (23) (2) (11) 7
Foreign exchange derivatives 2 (3) 2 8 (5)
Normalised earnings before taxation 496 332 255 91 75
Normalised earnings after taxation 343 244 181 69 82
18 Air New Zealand Databook 2015Historical Summary of Financial Position
As at 30 June
2015 2014 2013 2012 2011
$M $M $M $M $M
Current Assets
Bank and short term deposits 1,321 1,234 1,150 1,029 860
Other current assets 661 593 693 658 615
Total Current Assets 1,982 1,827 1,843 1,687 1,475
Non-Current Assets
Property, plant and equipment 4,061 3,279 2,933 3,090 2,714
Other non-current assets 732 744 820 668 713
Total Non-Current Assets 4,793 4,023 3,753 3,758 3,427
Total Assets 6,775 5,850 5,596 5,445 4,902
Current Liabilities
Net debt1 253 190 159 157 152
Other current liabilities 1,875 1,682 1,555 1,544 1,664
Total Current Liabilities 2,128 1,872 1,714 1,701 1,816
Non-Current Liabilities
Net debt1 2,069 1,543 1,470 1,537 1,103
Other non-current liabilities 613 563 611 544 479
Total Non-Current Liabilities 2,682 2,106 2,081 2,081 1,582
Total Liabilities 4,810 3,978 3,795 3,782 3,398
Net Assets 1,965 1,872 1,801 1,663 1,504
Total Equity 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 Flows
For the year to 30 June
2015 2014 2013 2012 2011
$M $M $M $M $M
Cash flow from operating activities 1,100 730 750 472 466
Cash flow from investing activities (1,066) (727) (480) (654) (846)
Cash flow from financing activities 53 81 (147) 349 173
Increase/(decrease) in cash holding 87 84 123 167 (207)
Total cash and cash equivalents 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.
Air New Zealand Databook 2015 19Air New Zealand Group
Financial Ratios
As at and for the year ended 30 June
2015 2014 2013 2012 2011
Profitability
EBIT/Revenue % 10.7 8.7 6.7 3.5 2.5
EBITDRA/Revenue % 23.6 21.6 19.4 15.9 15.3
Return on Equity1 % 16.6 14.0 10.0 4.2 5.4
Ordinary dividends declared cps 16.0 10.0 8.0 5.5 5.5
Basic Earnings Per Ordinary Share cps 29.2 23.9 16.5 6.5 7.5
Fixed Cover2 times 4.4 4.6 3.9 2.6 2.4
Passenger Revenue/RPK cents 13.7 13.7 13.6 13.5 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 % 52.4 42.9 39.3 46.1 46.7
operating leases)4
Net Debt to EBITDRA (incl. net capitalised times 1.86 1.40 1.30 2.02 1.99
aircraft operating leases) 5
Net Tangible Assets Per Share3 $ 1.66 1.60 1.57 1.48 1.33
Shareholder Value
Closing Share Price – as at 30 June $ 2.55 2.08 1.49 0.86 1.12
Weighted Average Number of
Ordinary Shares m 1,118 1,101 1,096 1,096 1,084
Total Number of Ordinary Shares m 1,122 1,114 1,104 1,100 1,091
Total Market Capitalisation $m 2,861 2,318 1,639 946 1,222
Total Shareholder Return % 33.2 46.5 80.2 (19.2) 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 Debt
As at 30 June
2015 2014 2013 2012 2011
$M $M $M $M $M
Debt
Secured borrowings 512 213 84 97 154
Unsecured bonds 150 150 150 150 -
Finance lease liabilities 1,660 1,370 1,395 1,445 1,101
Bank overdraft and short term borrowings - - - 2 -
2,322 1,733 1,629 1,694 1,255
Bank and short term deposits 1,321 1,234 1,150 1,029 860
Net open derivatives held in relation to
interest-bearing liabilities1 24 (10) 28 4 (28)
Non interest-bearing deposit
(included within Other assets) - - 44 13 -
Interest bearing secured deposit
(included within Other assets) 141 125 184 180 170
Net Debt 836 384 223 468 253
Net aircraft operating lease commitments2 1,323 1,022 945 973 1,064
Net Debt
(including off Balance Sheet aircraft operating leases) 2,159 1,406 1,168 1,441 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.
20 Air New Zealand Databook 20159. Company history
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
Glossary
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
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
Air New Zealand Databook 2015 21Air New Zealand Group
10. Executive management team
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.
Mr Avi Golan | Chief DIGITAL Officer
Avi joined Air New Zealand in January 2016 and leads the
airline’s 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.
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 Zealand’s sustainability programme.
David sits on the Advisory Board of the Sustainable Business Council
of New Zealand.
22 Air New Zealand Databook 2015Ms 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.
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.
Mr Mike Tod | Chief Marketing & Customer Officer
Mike joined Air New Zealand in 2003 and has responsibility for
Air New Zealand’s 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 Alliance’s Marketing Strategy Committee.
Mr Cam Wallace | Chief Sales & Commercial Officer
Appointed to Chief Sales and Commercial Officer in January 2014,
Cam is responsible for managing over $4 billion of the group’s
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.
Air New Zealand Databook 2015 23Air New Zealand Group
11. Board profiles
Antony (Tony) Carter Robert (Rob) Jager
Chairman DIRECTOR
Tony is Chairman of Fisher & Paykel Rob is Chairman of the Shell
Healthcare Limited, a director of Companies in New Zealand and
Fletcher Building Limited and ANZ General Manager, Shell Todd Oil
Bank New Zealand Limited and Services. He is also the Chair of
Independent Chairman of Blues the Workplace Health and Safety
LLP. Tony held senior positions at Review Taskforce in New Zealand.
Foodstuffs (New Zealand) Limited Rob has over 30 years’ experience
from 1994 including Managing in the oil and gas industry, working
Director from 2001 until he retired for Shell in a variety of operational,
in December 2010. Tony was named management and governance roles
Chairperson of the Year at the 2014 in New Zealand and overseas.
Deloitte Top 200 Awards.
Janice (Jan) Dawson Linda Jenkinson
Deputy Chair DIRECTOR
Jan is a director of AIG Insurance Linda is the Chair and Co-Founder
New Zealand Limited, Beca Group of LesConcierges Inc., a San
Limited, Meridian Energy Limited Francisco based global concierge
and Chairman of Westpac New services and solutions company
Zealand Limited. Jan was a partner that services some of the world’s
of KPMG for 30 years, specialising leading customer facing businesses.
in audit and risk advisory, and the Linda is currently a member of the
Chair and Chief Executive of KPMG Global Women Trust Advisory Board,
New Zealand from 2006 until a director of Massey University
2011. Jan was named Chartered US Foundation and a director of
Accountant of the Year in 2011 TheGrid and was named one of the
by the New Zealand Institute of most influential women in the Bay
Chartered Accountants. Area for 2014 by the San Francisco
Business Times.
Paul Bingham Jonathan Mason
DIRECTOR DIRECTOR
Paul is the Managing Director of Jonathan has more than 30
Black Cat Cruises Limited, a tourism years’ experience in the financial
operation based at Banks Peninsula, sector, with an emphasis on
near Christchurch. His tourism emerging markets. Prior to
background includes senior joining Air New Zealand’s Board
roles at Tourism Holdings Limited in March 2014, he was Fonterra
and Air New Zealand Limited, Co-operative Group’s Chief
and he is a previous director of Financial Officer. Jonathan has
Tourism New Zealand and Chair of had governance experience in
Christchurch & Canterbury Tourism. 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.
24 Air New Zealand Databook 2015Share Registrar Annual Financial Statements Investor Relations Office
Link Market Services Limited The Annual Financial Statements are Private Bag 92007, Auckland 1142
available by visiting our website New Zealand
Level 7, Zurich House www.airnzinvestor.com OR you may
21 Queen Street, Auckland 1010 elect to have a copy sent to you by Phone
New Zealand contacting Investor Relations. 0800 22 22 18 (New Zealand)
PO Box 91976, Auckland 1142 Phone
New Zealand Electronic Shareholder (64 9) 336 2607 (Overseas)
Communication
Email Fax
enquiries@linkmarketservices.com If you would like to receive all investor (64 9) 336 2664
communications electronically, including
Website interim and annual shareholder reviews, Email
www.linkmarketservices.com please visit the Link Market Services investor@airnz.co.nz
website www.linkmarketservices.com
Phone Website
or contact them directly (details to
(64 9) 375 5998 (New Zealand) www.airnzinvestor.com
the left).
Fax
(64 9) 375 5990 (New Zealand)
Phone
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