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’s (AIR) latest monthly passenger (pax) operating stats highlight a bumper end to CY22.</li><li>Our estimate (~NZ$650m) for its December 2022 pax revenue is comfortably ahead of December 2019 (~NZ$580m), implying ~NZ$18.5m/day</li><li>Demand remains strong in a capacity constrained market. Load factors (at 88.2%) are the third highest in its history (behind September and October 2022)</li></ul>

Air New Zealand’s (AIR) latest monthly passenger (pax) operating stats highlight a bumper end to CY22.Our estimate (~NZ$650m) for its December 2022 pax revenue is comfortably ahead of December 2019 (~NZ$580m), implying ~NZ$18.5m/dayDemand remains strong in a capacity constrained market. Load factors (at 88.2%) are the third highest in its history (behind September and October 2022)

<ul><li>Air New Zealand’s (AIR) latest monthly passenger (pax) operating stats continue to suggest passenger revenue is above CY19 levels</li><li>We expect revenue to remain at/above 2019 levels for the remainder of FY23, but with capacity increasing and yields/RASK declining from recent highs</li><li>AIR’s recent 1H23 earnings guidance upgrade (PBT of NZ$295m-NZ$325m) implies a strong FY23 result</li></ul>

Air New Zealand’s (AIR) latest monthly passenger (pax) operating stats continue to suggest passenger revenue is above CY19 levelsWe expect revenue to remain at/above 2019 levels for the remainder of FY23, but with capacity increasing and yields/RASK declining from recent highsAIR’s recent 1H23 earnings guidance upgrade (PBT of NZ$295m-NZ$325m) implies a strong FY23 result

Air New Zealand: Revenue Remains Above 2019 Levels

Thematic (Sector/Industry)

<ul><li>Abnormal gains in international freight are unwinding rapidly, particularly for seafreight, with global spot indices now down ~80% from their peaks but still above pre-pandemic levels</li><li>Air cargo's rates compression has been slower, mirroring the slow recovery in air seat capacity</li><li>In this normalising, yet far from normal environment, Freightways (FRE; OUTPERFORM) and Mainfreight (MFT; OUTPERFORM) remain our preferred exposures in the sector</li></ul>

Abnormal gains in international freight are unwinding rapidly, particularly for seafreight, with global spot indices now down ~80% from their peaks but still above pre-pandemic levelsAir cargo's rates compression has been slower, mirroring the slow recovery in air seat capacityIn this normalising, yet far from normal environment, Freightways (FRE; OUTPERFORM) and Mainfreight (MFT; OUTPERFORM) remain our preferred exposures in the sector

Transport Trends: Nothing Normal About the Normalising

<ul><li>Air New Zealand (AIR) has materially upgraded its 1H23 earnings guidance as (1) passenger demand remains strong, thereby boosting yields on constrained capacity, and (2) easing fuel price pressures</li><li>Passenger yields and RASK (revenue per available seat km) remain significantly higher than pre-pandemic, given the slower recovery in supply compared to buoyant demand.</li><li>As capacity returns we expect yields to fall but this is more likely to feature in FY24 than dampen the earnings recovery in 2H23</li></ul>

Air New Zealand (AIR) has materially upgraded its 1H23 earnings guidance as (1) passenger demand remains strong, thereby boosting yields on constrained capacity, and (2) easing fuel price pressuresPassenger yields and RASK (revenue per available seat km) remain significantly higher than pre-pandemic, given the slower recovery in supply compared to buoyant demand.As capacity returns we expect yields to fall but this is more likely to feature in FY24 than dampen the earnings recovery in 2H23

Air New Zealand: Yields Cruising at High Altitude

<ul><li>Air New Zealand (AIR) has upgraded its 1H23 earnings guidance.</li><li>Its new PBT range of NZ$295m-NZ$325m compares to its previous range of NZ$200m-NZ$275m.</li><li>Lower fuel costs account for ~NZ$20m of the upgrade with the remainder reflecting continued strong demand, with AIR benefiting from reduced industry capacity and a super-strong yield environment.</li></ul>

Air New Zealand (AIR) has upgraded its 1H23 earnings guidance.Its new PBT range of NZ$295m-NZ$325m compares to its previous range of NZ$200m-NZ$275m.Lower fuel costs account for ~NZ$20m of the upgrade with the remainder reflecting continued strong demand, with AIR benefiting from reduced industry capacity and a super-strong yield environment.

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)

Air New Zealand: Record Revenues

Air New Zealand’s (AIR) latest monthly passenger (pax) operating stats highlight a bumper end to CY22; Our estimate (~NZ$650m) for its December...

Forsyth Barr

Air New Zealand: Revenue Remains Above 2019 Levels

Air New Zealand’s (AIR) latest monthly passenger (pax) operating stats continue to suggest passenger revenue is above CY19 levels; Demand remains...

Forsyth Barr

Transport Trends: Nothing Normal About the Normalising

The industry is normalising, but from different angles and at a different rates: Abnormal gains in international freight are unwinding rapidly,...

Forsyth Barr

Air New Zealand: Yields Cruising at High Altitude

Air New Zealand (AIR) has materially upgraded its 1H23 earnings guidance as (1) passenger demand remains strong, thereby boosting yields on...

Forsyth Barr

Air New Zealand: Guidance Upgrade

Air New Zealand (AIR) has upgraded its 1H23 earnings guidance with its new PBT range of NZ$295m-NZ$325m compares to its previous range of NZ$200m...

Forsyth Barr

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