New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>Air New Zealand&#8217;s (AIR) expected strategy reset sets out its key strategic priorities with a core emphasis on having a competitive product, continuing to grow the business, and generating reasonable returns helped by a well-advanced cost-out programme.</li><li>No new financial targets have been announced though AIR suggests further commentary will be forthcoming at the FY26 result and November 2026 investor day.</li><li>The strategy reset announcement was released onto the NZX as a non-price sensitive disclosure from AIR, which we would concur with.</li></ul>

Air New Zealand&#8217;s (AIR) expected strategy reset sets out its key strategic priorities with a core emphasis on having a competitive product, continuing to grow the business, and generating reasonable returns helped by a well-advanced cost-out programme.No new financial targets have been announced though AIR suggests further commentary will be forthcoming at the FY26 result and November 2026 investor day.The strategy reset announcement was released onto the NZX as a non-price sensitive disclosure from AIR, which we would concur with.

Air New Zealand (AIR.NZ) - Strategy Reset

<ul><li>Air New Zealand&#8217;s (AIR) May 2026 passenger (pax) statistics indicate that year on year revenue growth has continued.</li><li>May 2026 group monthly revenue was up +3% on the prior year, with a +5% increase in long-haul revenue while short-haul revenue was flat.</li><li>The US-Iran deal to open the Strait of Hormuz has put further downward pressure on oil prices, which AIR is ~85% hedged against, and the crack spread (the difference between oil and jet fuel prices), which AIR is fully exposed to.</li></ul>

Air New Zealand&#8217;s (AIR) May 2026 passenger (pax) statistics indicate that year on year revenue growth has continued.May 2026 group monthly revenue was up +3% on the prior year, with a +5% increase in long-haul revenue while short-haul revenue was flat.The US-Iran deal to open the Strait of Hormuz has put further downward pressure on oil prices, which AIR is ~85% hedged against, and the crack spread (the difference between oil and jet fuel prices), which AIR is fully exposed to.

Air New Zealand (AIR.NZ) - Holding Its Altitude

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Thematic (Sector/Industry)

<ul>
<li>Of the seven US metrics we track, six showed a weaker pace of Y/Y change vs July data</li>
<li>Five of the seven border crossing metrics showed Y/Y declines in August (vs only two in July)</li>
<li>As a proxy for US leisure and travel activity, the August numbers paint a bleak picture</li>
</ul>


Of the seven US metrics we track, six showed a weaker pace of Y/Y change vs July data
Five of the seven border crossing metrics showed Y/Y declines in August (vs only two in July)
As a proxy for US leisure and travel activity, the August numbers paint a bleak picture


August US Customs & Border Protection Data Confirm Softening Travel Trend in Most Segments, Regions

<ul><li>Air New Zealand's (AIR) reissued FY26 loss guidance highlights a P&L under significant strain but a balance sheet that has plenty of capacity to absorb losses for the foreseeable future.</li><li>Simplistically, the new guidance suggests that AIR is taking higher fuel costs on the chin with limited mitigation elsewhere.</li><li>With industry capacity cuts modest at best, and Middle Eastern carriers rebuilding theirs, the ability for AIR and other airlines to retain the elevated RASK evident in the early weeks of the crisis is eroding.</li></ul>

Air New Zealand's (AIR) reissued FY26 loss guidance highlights a P&L under significant strain but a balance sheet that has plenty of capacity to absorb losses for the foreseeable future.Simplistically, the new guidance suggests that AIR is taking higher fuel costs on the chin with limited mitigation elsewhere.With industry capacity cuts modest at best, and Middle Eastern carriers rebuilding theirs, the ability for AIR and other airlines to retain the elevated RASK evident in the early weeks of the crisis is eroding.

<ul><li>FY26 profit before tax (PBT) loss guidance, which was withdrawn on 10 March 2026, has been reissued at -NZ$340m to -NZ$390m.</li><li>Management now expects 2H26 fuel costs of ~NZ$980m (vs our estimate of NZ$990m), which compares to February 2026 guidance of ~NZ$740m.</li><li>AIR has ample liquidity (currently ~NZ$1.3bn) for the time being and has ~NZ$4bn of available aircraft ‘equity’ on un- or under-encumbered aircraft.</li></ul>

FY26 profit before tax (PBT) loss guidance, which was withdrawn on 10 March 2026, has been reissued at -NZ$340m to -NZ$390m.Management now expects 2H26 fuel costs of ~NZ$980m (vs our estimate of NZ$990m), which compares to February 2026 guidance of ~NZ$740m.AIR has ample liquidity (currently ~NZ$1.3bn) for the time being and has ~NZ$4bn of available aircraft ‘equity’ on un- or under-encumbered aircraft.

Air New Zealand (AIR.NZ) - A Thorough Update; Larger Near-Term Losses

New Zealand

Air New Zealand Limited operates an airline business that provides international and domestic air passenger and cargo transport services throughout New Zealand and the South West Pacific. The Company also provides engineering and ground handling services.

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Air New Zealand (AIR NZ)