Air New Zealand (AIR) investor relations material

Market and trading update

• Elevated and volatile jet fuel prices due to Middle East conflict have created a significant external shock, with prices rising from US$85–90 to US$160–230 per barrel in recent weeks.

• Three targeted capacity consolidations have reduced overall group capacity by 3–5%, with further updates possible if fuel prices remain high.

• Fare increases have been implemented across the network, with fuel cost recovery expected to improve as new bookings reflect revised pricing.

• Booking momentum has moderated, with domestic and Trans-Tasman demand softening, while Asia inbound and cargo remain resilient.

Financial and liquidity position

• Total available liquidity stands at approximately $1.3 billion, including a $250 million undrawn standby facility.

• Net debt to EBITDA is currently outside the target range, but $4.0 billion of available aircraft equity enhances balance sheet resilience.

• A US$400 million secured revolving credit facility is being finalized, expected to increase pro-forma liquidity by $670 million.

• Moody's reaffirmed the Baa1 credit rating but downgraded the outlook to negative.

Cost management and operational actions

• Up to $100 million of annualized cost savings identified, with further cost reduction work ongoing.

• Near-term capital expenditure deferrals are planned due to aircraft manufacturer delays.

• Improved aircraft availability is expected to reduce carrying costs and allow greater deployment of fuel-efficient aircraft.