New Zealand Professional Investment Services Firm

Forsyth Barr

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.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Air New Zealand Modestly Lower FY22 Loss</h2>
Air New Zealand (AIR) has upgraded its loss guidance for FY22 reflecting the strong recovery of demand through FY22 partly offset by higher fuel costs. Its revised underlying loss before tax guidance is for &lt;NZ$750m compared to previous guidance of &lt;NZ$800m.
The company states: “The airline continues to see strong passenger booking activity on short haul and international services following the opening of the New Zealand border. Domestic demand has also improved in recent weeks with business-related demand returning to approximately 90 percent of pre-Covid levels.”
Current Visible Alpha consensus is for a loss before tax of NZ$782m. The strength of the demand recovery bodes well for a significantly better financial performance in FY23 with a potential return to profitability, although we are mindful of the oil price risk and current elevated crack spread (difference between jet fuel and crude oil price) that AIR is typically exposed to irrespective of its fuel hedging position. &nbsp;
We expect consensus upgrades to FY22 earnings and later years as a result of the strong demand recovery.

Air New Zealand Modestly Lower FY22 Loss
Air New Zealand (AIR) has upgraded its loss guidance for FY22 reflecting the strong recovery of demand through FY22 partly offset by higher fuel costs. Its revised underlying loss before tax guidance is for &lt;NZ$750m compared to previous guidance of &lt;NZ$800m.
The company states: “The airline continues to see strong passenger booking activity on short haul and international services following the opening of the New Zealand border. Domestic demand has also improved in recent weeks with business-related demand returning to approximately 90 percent of pre-Covid levels.”
Current Visible Alpha consensus is for a loss before tax of NZ$782m. The strength of the demand recovery bodes well for a significantly better financial performance in FY23 with a potential return to profitability, although we are mindful of the oil price risk and current elevated crack spread (difference between jet fuel and crude oil price) that AIR is typically exposed to irrespective of its fuel hedging position. &nbsp;
We expect consensus upgrades to FY22 earnings and later years as a result of the strong demand recovery.

Air New Zealand: Modestly Lower FY22 Loss