Full Year 2026 Air New Zealand Ltd Earnings Call Transcript
Key Points
- Operational reliability improved significantly, with on-time performance rising to 84% in the second half, placing Air New Zealand Ltd (ANZFF) in the top decile globally.
- All 14 Boeing 787s have returned from storage, and the last narrow-body aircraft is expected back by calendar year 2027, reducing fleet constraints.
- Transformation initiatives delivered $94 million in incremental EBITDA benefits, with an additional $135 million in annualized savings identified for FY27.
- Customer satisfaction improved to 84.5, and controllable cancellations dropped from 2.2% to 1.3%, reflecting better service delivery.
- Premium cabin revenue grew 14% and ancillary revenue rose 12%, supported by strong inbound demand and successful product investments.
- Forward bookings strengthened, with sales up 12-15% year-on-year in recent weeks, indicating improving demand momentum.
- Air New Zealand Ltd (ANZFF) reported a loss before tax of $336 million, significantly impacted by high fuel prices and engine availability issues.
- Fuel price increases, exacerbated by the Middle East conflict, added $135 million in net costs, with only partial recovery through capacity and fare adjustments.
- Engine availability issues cost approximately $190 million net of compensation, with residual costs of $70-90 million expected in FY27.
- Aviation system costs rose 14% year-on-year, including a 90% increase in CAA and AVSEC levies, outpacing general inflation.
- Net debt to EBITDA rose to 3.8 times, well above the target range of 1.5-2.5 times, and no final dividend was declared.
- Domestic demand remains soft, with passenger volumes down and outbound international travel weak, partly due to the weak New Zealand dollar.
Welcome to Air New Zealand 2026 annual results investor briefing. (Operator Instructions)
And with that, I will turn the call over to Andrew Familton, General Manager, Corporate Finance. Please go ahead.
Good morning everyone, and thank you for joining us for Air New Zealand's 2026 annual results presentation.
Today's presentation is being webcast and recorded, and a copy of the presentation and associated materials are available on our Investor Centre website.
Just a reminder that our comments today will include certain forward-looking statements regarding our future expectations, which may differ from actual results.
We ask that you read through the disclaimer and in particular. The forward-looking cautionary statement provided on slide 2 of the presentation.
Joining us today are our Chief Executive Officer, Nikhil Ravishankar; our outgoing CFO, Richard Thomson; and our new CFO, Kris Cudmore.
We'll begin with an overview of the
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