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Announcement

MONTHLY: AIR: Air New Zealand Investor Update (Op Stats) - July 2016

22 Aug 2016 12:57NZX
Contents
o July market conditions
o Company news
o Operating statistics table

July market conditions

Air New Zealand carried 1,356,000 passengers during the month of July, an
increase of 6.5% compared to the same period last year. Revenue passenger
kilometres (RPKs) were 8.5% higher on a capacity (ASKs) increase of 9.8%.
Group load factors were down 1.0 percentage point overall to 82.5%.

Short Haul passenger numbers increased 6.0%.  In the Domestic market demand
(RPKs) increased by 9.5%, with capacity (ASKs) increasing by 7.7%, due to
increased services on Auckland-Queenstown.  Domestic load factor was 79.9%,
up 1.3 percentage points.

Tasman/Pacific demand (RPKs) increased 3.4% while capacity (ASKs) increased
by 4.8%. Load factor on Tasman/Pacific decreased 1.1 percentage points to
79.2%.

Long Haul passenger numbers increased 9.8% when compared to July last year,
with demand (RPKs) up 11.1% and capacity (ASKs) up 13.5%. Load factor on Long
Haul routes was 85.2%, down 1.8 percentage points.

On Americas/UK routes, demand (RPKs) increased 12.1% with capacity (ASKs)
increasing 14.8% due to the Auckland-Houston and Auckland-Buenos Aires
routes, which was partially offset by reduced frequency on the Auckland-Los
Angeles route. Load factor decreased 2.2 percentage points to 86.6%.

On Asia/Japan/Singapore routes, demand (RPKs) increased 9.5%, with capacity
(ASKs) increasing by 11.2%, due to the commencement of the seasonal
Auckland-Ho Chi Minh City route. Load factor decreased 1.2 percentage points
to 82.7%.

Short Haul passenger revenue per ASK (RASK)* decreased 6.0% while Long Haul
RASK* decreased 11.9%. Removing the impact of foreign exchange, Group-wide
RASK* decreased 10.3%, and group-wide yields for the month decreased 9.2% on
the same period last year.

*  Air New Zealand''s operating statistics will provide Passenger revenue per
ASK, or RASK, going forward as a key metric of revenue performance. RASK is
defined as passenger revenue for the period divided by the total ASKs for the
period; compared to yield which represents the passenger revenue per
passenger kilometre flown.

Company news

Air New Zealand confirms 767 exit timeframe

Air New Zealand has confirmed the last of its Boeing 767-300 aircraft will
leave its fleet in early 2017 as it accelerates its fleet simplification
programme.

Air New Zealand currently has an operating fleet of three, and will retire
another before the end of 2016.  The final two will exit together by the end
of March 2017.

Air New Zealand Chief Flight Operations and Safety Officer Captain David
Morgan says moving to operate a narrow-body fleet of Airbus A320 and a
wide-body fleet of Boeing 777 and 787-9 aircraft will bring benefits to the
business and to customers.

"The retirement of this fleet will allow us to streamline crewing and
training plans across the jet fleet, simplify maintenance, offer a consistent
wide-body product to our customers and maintain our overall cost
competitiveness.

"We have been planning the exit of the 767 for a number of years. This long
lead timeframe has enabled us to actively plan how we manage international
capacity with our fleet of Boeing 777 and 787-9 aircraft."

2016 Annual Shareholder Meeting

Air New Zealand Limited advises that its Annual Shareholders'' Meeting will be
held at the Air Force Museum of New Zealand, 45 Harvard Avenue, Christchurch,
on Friday 30 September 2016 at 2.00pm.
Air New Zealand will be offering in addition to the usual meeting, an online
attendance option this year, giving shareholders the choice to attend and
participate in the Annual Meeting via an online platform. Details of
registration for those who wish to participate online will be included in the
Notice of Meeting sent after the 2016 Annual Results on 26 August 2016.
Nomination of Directors
Nominations for the position of director may be made on or before 5pm Friday
12 August 2016. Nominations must be made in writing by a security holder
entitled to attend and vote at the Meeting, and should be directed to the
Company Secretary at Air New Zealand, Private Bag 92007, Auckland 1142. (This
announcement is made pursuant to NZX Listing Rule 3.3.5 and ASX Listing Rule
14.3).

2016 Annual Results

Air New Zealand''s 2016 annual results will be announced before NZX trading
begins on Friday, 26 August 2016.

An investor analyst call and webcast will be held with Christopher Luxon
(CEO) and Rob McDonald (CFO) at 11:00am NZDT and can be accessed in the
following ways.

o Live via webcast (Click here for a link to the analyst webcast)
o Live via telephone (for "listen-only" participants and those who would like
to ask a question):
Conference ID: 409605
New Zealand Toll Free: 0800 453 055
NZ Local (Auckland): 09 929 1687
NZ Local (Wellington): 04 974 7738
NZ Local (Christchurch): 03 974 2632
Australia Toll Free: 1 800 558 698
Alternate Australia Toll Free: 1 800 809 971
Australia Local: +61 2 9007 3187
United States: (855) 881 1339
United Kingdom: 0800 051 8245
China Wide: 4001 200 659
Hong Kong: 800 966 806
Japan: 0053 116 1281
Singapore: 800 101 2785
South Korea: 00 798 142 063 275

o Replay via webcast - can be accessed through the "Latest Annual & Interim
Reports" link on the Investor Centre section of Air New Zealand''s website:
http://www.airnewzealand.co.nz/investor-centre

Air New Zealand to increase its premium seating offering

Air New Zealand is to spend more than $100 million increasing the number of
premium seats on its Boeing 787-9 Dreamliners and refurbishing its Boeing
777-300 fleet in response to customer trends.

Increasing demand for premium travel means the three Dreamliners scheduled to
be delivered from October 2017 will arrive with a fresh new cabin
configuration that will increase the number of Business Premier seats from 18
to 27 and Premium Economy seats from 21 to 33.

From February 2017, all seven of the airline''s Boeing 777-300s will also
progressively complete a refurbishment programme, including the installation
of the Panasonic eX3 in-flight entertainment system customers already enjoy
on the Dreamliner fleet, and refreshed seating options.

Each of the 777-300s'' interiors will be completely refurbished as part of the
project.  The refurbished aircraft will feature refreshed Business Premier
and Economy seats as well as Air New Zealand''s luxury leather Premium Economy
seat which debuted on the 787-9 Dreamliner in July 2014.  These will replace
the Spaceseat and take the number of Premium Economy seats on this aircraft
from 44 to 54.

The Boeing 777-300 refurbishment programme is expected to be completed by
late November 2017.

Air New Zealand''s General Manager Customer Experience Carrie Hurihanganui
says since its introduction on the Dreamliner, the new ink coloured luxury
leather Premium Economy seat has become extremely popular with customers.

"When we unveiled the Spaceseat in 2010, it was revolutionary and clearly the
best option in the market at the time, as a string of international awards
has proven.  However, seating technology and materials have come a long way
since then and our customer research now shows consistently higher
satisfaction scores for our newest Premium Economy offering so it''s time to
continue Air New Zealand''s evolution in this space," Ms Hurihanganui says.

"With these changes, we look forward to being able to offer our customers a
consistent Premium Economy product across our long haul fleet and being able
to welcome even more customers into our premium cabins with the expanded
premium footprint on our Dreamliners."

"The reconfiguration of our Dreamliners and refurbishment of our 777-300s
signal a clear commitment by the airline to continue to deliver the best on
board customer experience into the future."

Ends.
End CA:00287623 For:AIR    Type:MONTHLY    Time:2016-08-22 12:57:44
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