NIKOLA GEORGIEV – 07059973

nik_singerstr@yahoo.com
 AGENDA

> Route structure

> Route/Flight performance

> Operating fleet

> Operating statistics

> Employee performance

> Financial performance

> Competitors

> Future

> Conclusion

> References

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 ROUTE STRUCTURE

 Route plan divided into domestic and international flights

• Over 550 flights a day to 27 domestic destinations

• International flights divided into 3 geographical parts:

Europe, Asia & Australasia and the Americas

 Air New Zealand operates direct flights to London with code share flights to
other European destinations in UK, Ireland and Germany

 Australasia directly by Air New Zealand and its code share partners

 North American region is served by Air New Zealand with direct flights to Los
Angeles and San Francisco, USA and the new route - Vancouver, Canada;

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 ROUTE PERFORMANCE

 Routes performance divided into domestic, long haul and

Tasman & Pacific Island flights:
> Long haul flights load factor has increased over 80%, with passenger
numbers up by 12.3%

> Domestic flights capacity has increased by 7.5% compared with 2008,
load factor decreased by 0.7%. The airline operates more domestic routes
than any other airline, which leaded to increase of passenger numbers by
6.1%

> Tasman and Pacific Island flights capacity have been decreased by 1.9%,
but load factor have been increased by 2.7%

 Overall capacity have increased by 5.4%, while the passenger

load factor have increased by 2.8%

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Source: http://www.airport-la.com/airlines/Air-New-Zealand.html

FLIGHT PERFORMANCE

Air NZ Flight arrival Air NZ Flight departure

performance performance
72% 68%

20% 23%
5% 3% 6% 2%

Less than 10-30 30-60 more Less than 10-30 30-60 more
10min min min than 60 10min min min than 60
min min

Source: http://www.airport-la.com/airlines/Air-New-Zealand.html

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 OPERATING FLEET

747- 400
777-200 X8
X8
767-300
A320 X5
x 12
737-300
X 18

Additional Fleet

ATR72-500 X11
Bombardier Q300 X21
Beech1900D X17

On order: B787-9 X5 for Y12/13

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 OPERATING STATISTICS

Short haul Op Statistic June 2008 June 2007 Movement*

Passengers 11.2 m 10.7m 4.5%
ASKs 14,748m 14,588m 1,1%
RPKs 11,334m 10,980m 3.2%
Load Factor 76,9% 75,3% 1,6pts

Long haul Op Statistics June 2008 June 2007 Movement*

Passengers 2.0m 1.7m 12.3%
ASKs 22,243m 20,525m 8,4%
RPKs 18,015m 15,894m 13,3%
Load Factor 81,0% 77,4% 3,6pts

Group Op Statistics June 2008 June 2007 Movement*

Passengers carried 13,2m 12,5m 5,6%
ASKs 36,991m 35,113m 5,4%
Load Factor 79,3% 76,5% 2,8pts
Yield (cents per RPK) 13,0 12,9 0,2%

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 EMPLOYEE PERFORMANCE

The following graph shows the productivity of Air New Zealand employees

Source: Air New Zealand

> $37m extra cost savings are achieved in 2008

> $361m per annum are being delivered from business transformation
initiatives already implemented
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 FINANCIAL PERFORMANCE

Source: Air New Zealand

Fuel Hedging* (*Fuel hedge position as at 18 th August 2008)

> For the first half of FY09, approximately 74% of the fuel has been hedged

> The second half of FY09, approximately 38% of the fuel has been hedged

Risk Management/Currency Hedging

> 2009 US Dollar operating cash flow exposure is approximately 90% hedged at an average NZ$/US$ rate of 0.76

General financial overview

> $1.3bn cash on balance sheet at year end with gearing of 45.5% (7, 6% percent improvement),

> Average fleet of 6.5 years, 2 X Boeing 747-400s sold and leased back
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FINANCIAL PERFORMANCE 2

The following graph represents the key influences on the company profitability.

Source: Air New Zealand

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FINANCIAL PERFORMANCE 3

The following is a snapshot of the financial statement of Air New Zealand for operations

From the statement above, we can calculate the operating ratio using the formula –
operating expenses / operating revenue: 3,720/4,667 = 0.79X100=79%

Source: Air New Zealand

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 COMPETITORS

Qantas fleet comprises of: 4 x Airbus A380-800, 6 x Boeing 747-400ER, 22 x Boeing 747-400,
27 x Boeing 767-300ER, 41 x Boeing 737-800, 21 x Boeing 737-400, 11 x Boeing 717-200, 10 x
Airbus A330-300, 6 x Airbus A330-200, 21 x Bombardier Dash 8

Qantas flies to 16 domestic and 21 international destinations in 14 countries across Africa,

Americas, Asia, Europe and Oceania.
Qantas has South America and Africa to its direct network of services

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Source: Qantas

COMPETITORS FINANCE PERFORMANCE

Profit before tax

Qantas mainline profitability fell 76.2%, to AUD199 million.
Qantas profit before tax, 1H09 (to 31-Dec-09)

Source: Qantas

Qantas still retains a strong balance sheet, although gearing increased to 52% during the period. The group
retains a cash balance of AUD2.8 billion, with a standby facility of AUD 500 million.

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Source: Qantas

COMPETITORS PASSENGER/LOAD FACTOR

Qantas Group passenger number growth and passenger load factor: 2005 to 1H2009
(Financial year ended 30-Jun)

Source: Centre for Asia Pacific Aviation & Qantas Group

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THE FUTURE

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THE FUTURE

•Safety Management System.

•Integration with other Operational Integrity data

•Potentially a Regulatory Tool

•Reduction in route Audit frequency/costs

•Reduction in Route Checks – just Captains?

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CONCLUSION

• Strategic management focus on on utilization of aircrafts,

operational activities and general management activities
strategy

• Focus on network expansion in line with demand – eliminating

the possibility of creating non-profitable routes

• Qantas - better fleet capacity and network coverage than Air

New Zealand - does not mean it’s more profitable

• Even with lower fleet and network capacity, Air New Zealand is
more profitable and cost efficient airline than its direct
competitor – Qantas

• Still work to be done to achieve all the benefits

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REFERENCES

Websites:

> Air New Zealand - http://www.airnewzealand.co.nz/

> Qantas - www.quantas.com.au

> Flight Performances -

http://markets.ft.com/tearsheets/performance.asp?s=nz:AIR

> Los Angeles Airport (flight performances) - http://www.airport-

la.com/airlines/Air-New-Zealand.html

> Boeing (news) -

http://www.boeing.com/news/releases/2008/q4/081111c_nr.html

> Centre for Asia Pacific Aviation & Qantas Group - www.centreforaviation.com

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