MONTHLY INVESTOR UPDATE: 27 March 2008 CONTENTS - February market conditions - New aircraft deliveries - Company announcements - Operating statistics table MARKET CONDITIONS Passengers carried across the Group were 4.6% higher in February 2008 than in the same month last year. For the financial year-to-date, Short Haul passenger numbers increased by 4.6% and Long Haul by 15.5% on the comparable period in the 2007 financial year. The North American routes continue to record impressive load factors, at 85.1% for February, despite talk of recessionary economic conditions. Air New Zealand is to increase its direct services between Auckland and Vancouver from three to four a week from early December to meet the strong customer demand. The passenger load factor for Asia / Japan / UK fell 0.3 of a percentage point in February but for the financial year-to-date loads are up 5.8 percentage points for this route group. Capacity has been increased in the market by 20.5% for the financial year-to-date and passengers carried are up 27.2%. In the Domestic market, passenger numbers grew at 4.7% on February last year on the back of a 9.2% capacity increase by Air New Zealand. The load factor for the year-to-date is 0.3 of a percentage point lower than those achieved in the 2007 financial year as market capacity growth is greater than stimulated demand. Long Haul load factors for the month remained strong relative to last February s statistics, but both Domestic and Tasman/PI were lower: Short Haul passenger load factors decreased 1.2 percentage points to 76.5% - Domestic passenger load factor was down 2.0 percentage points to 76.3% - Tasman / PI passenger load factor was down 0.8 of a percentage point to 76.6% Long Haul passenger load factors increased 2.7 percentage points to 82.5% - Asia / Japan / UK passenger load factor decreased 0.3 of a percentage point to 79.4% - North America / UK passenger load factor increased 5.1 percentage points to 85.1%
Group-wide yields for the year-to-date were down 0.3% on the same period last year. Both yearto-date short haul and long haul yields were up on last year by 1.3% and 2.1% respectively. Removing the impact of foreign exchange, group-wide yields were up 3.2%. NEW AIRCRAFT DELIVERIES Air New Zealand took delivery of an additional Boeing 737-300 aircraft on 14 March. The aircraft is due to enter the operating fleet on 7 April and will replace an aircraft that was on a short-term lease. Operating Aircraft Jun 07 Additions Disposals 20 Mar 08 Boeing 747-400 8 - - 8 Boeing 777-200ER 8 - - 8 Boeing 767-300ER 6 - (1) 5 Airbus A320-200 12 - - 12 Boeing 737-300 14 1-15 ATR72-500 11 - - 11 Saab 340A 3 - (3) - Q300 16 4-20 Beech 1900D 17 - - 17 TOTAL 95 5 (4) 96 COMPANY ANNOUNCEMENTS Air New Zealand increases Vancouver services Air New Zealand is to increase its direct services between Auckland and Vancouver to four a week from early December to meet strong customer demand. Vancouver is proving to be one of the airline's most successful route launches in recent years. The airline launched the new non-stop service in November with three trips per week, on Wednesday, Friday and Sunday. The fourth service will operate on Thursdays for the peak travel season between 4 December and 26 March 2009. Domestic and Tasman fare increases Air New Zealand's domestic, Tasman and Pacific Island fares will rise by an average of three percent for travel booked from Wednesday, March 26 2008. The increases are being introduced to recover some of the recent fuel cost increases. More Tasman Services from Auckland and Wellington Air New Zealand will increase capacity to Melbourne, Sydney and Brisbane later in the year adding more direct services and using larger aircraft. From 26 October, additional capacity will be added on the Auckland-Melbourne route by using a Boeing 767-300 aircraft instead of an Airbus A320 on Monday, Wednesday, Thursday, Friday and Sunday afternoons.
From 16 December onwards a third daily service will operate from Auckland on Tuesday, Thursday and Sunday (Sunday flight overnights and returns Monday morning). Total capacity between Auckland and Melbourne will increase by 6% as a result. Services from Auckland- Sydney will increase from 15 December onwards with an additional A320 return service operating on Monday, Wednesday and Friday. From 26 October, Air New Zealand will add an additional weekly Friday service between Wellington and Melbourne, taking the total number of return services a week to eight. Services between Wellington and Brisbane will also increase, going from five to six return services per week, with the introduction of flights on a Thursday. Both additional services will be operated by A320 aircraft. The decision to introduce capacity is in advance of an expected increase in customer demand as Air New Zealand starts introducing in-flight entertainment at every seat and newly reconfigured B767 and A320 cabins from July onwards.
OPERATING STATISTICS TABLE Group Passengers carried (000) 1,068 1,022 4.6% 8,663 8,163 6.1% Revenue Passenger Kilometres(m) 2,428 2,209 9.9% 19,663 17,696 11.1% Available Seat Kilometres (m) 3,026 2,797 8.2% 24,514 23,308 5.2% Passenger Load Factor (%) 80.2% 79.0% 1.2 pts 80.2% 75.9% 4.3 pts Short Haul Total Passengers carried (000) 899 871 3.2% 7,339 7,017 4.6% Revenue Passenger Kilometres(m) 879 858 2.4% 7,560 7,294 3.6% Available Seat Kilometres (m) 1,149 1,105 4.0% 9,731 9,816 (0.9%) Passenger Load Factor (%) 76.5% 77.7% (1.2)pts 77.7% 74.3% 3.4 pts Domestic Passengers carried (000) 672 642 4.7% 5,304 5,000 6.1% Revenue Passenger Kilometres(m) 310 291 6.4% 2,410 2,270 6.1% Available Seat Kilometres (m) 406 372 9.2% 3,248 3,048 6.6% Passenger Load Factor (%) 76.3% 78.3% (2.0 pts) 74.2% 74.5% (0.3)pts Tasman / Pacific Passengers carried (000) 226 229 (1.3%) 2,035 2,016 0.9% Revenue Passenger Kilometres(m) 569 567 0.5% 5,150 5,024 2.5% Available Seat Kilometres (m) 743 733 1.4% 6,483 6,768 (4.2%) Passenger Load Factor (%) 76.6% 77.4% (0.8)pts 79.4% 74.2% 5.2 pts Long Haul Total Passengers carried (000) 170 150 13.3% 1,324 1,146 15.5% Revenue Passenger Kilometres(m) 1,548 1,351 14.6% 12,103 10,402 16.4% Available Seat Kilometres (m) 1,877 1,692 10.9% 14,783 13,492 9.6% Passenger Load Factor (%) 82.5% 79.8% 2.7 pts 81.9% 77.1% 4.8 pts Asia / Japan / UK Passengers carried (000) 77 73 5.5% 584 459 27.2% Revenue Passenger Kilometres(m) 693 647 7.2% 5,189 3,992 30.0% Available Seat Kilometres (m) 873 812 7.6% 6,533 5,422 20.5% Passenger Load Factor (%) 79.4% 79.7% (0.3)pts 79.4% 73.6% 5.8 pts North America / UK Passengers carried (000) 92 77 19.5% 740 687 7.8% Revenue Passenger Kilometres(m) 855 704 21.5% 6,914 6,410 7.9% Available Seat Kilometres (m) 1,004 880 14.1% 8,250 8,070 2.2% Passenger Load Factor (%) 85.1% 80.0% 5.1 pts 83.8% 79.4% 4.4 pts
Notes: 1. Monthly operating statistics are issued on a preliminary basis and are subject to change. Any changes made will flow through the year-to-date column. 2. Year-on-year percentage movements are calculated on operating statistics prior to rounding adjustments. ASKs: The number of seats made available for sale multiplied by the distance flown. RPKs: The number of revenue passengers carried multiplied by the distance flown. Yield: Revenue (adjusted for currency movements) over distance flown on a per passenger basis (Revenue/RPKs) Load Factor: RPKs as a percentage of ASKs. Short Haul: Includes New Zealand, Australia and Pacific Islands. Long Haul: Includes Asia, North America and Europe