Financial Performance of Air New Zealand Company

This report reflects the financial performance of Air New Zealand Company. It includes analysis of internal environment, liquidity ratio, profitability ratio, efficiency ratio, solvency ratio and IFAS table summary.

RUNNING HEAD: Financial Performance of Air New Zealand Company 1 | P a g e
Name of the student
Topic- Financial Performance of Air New Zealand Company
University Name-

Financial Performance of Air New Zealand Company 2 | P a g e
Table of Contents
Table of Contents........................................................................................................................................2
Introduction.................................................................................................................................................3
Description of the Company....................................................................................................................3
Current situation of the Air New Zealand Company...................................................................................3
Strategic posture of the Air New Zealand Company...............................................................................4
Internal environment: Strength and Weakness of Air New Zealand Company........................................5
Summary of Internal Factors.....................................................................................................................11
Top Management of the Air New Zealand Company................................................................................16
ANALYSIS OF STRATEGIC FACTORS (SWOT).................................................................................17
STRATEGIC ALTERNATIVES & RECOMMENDED STRATEGY.....................................................19
References.................................................................................................................................................20
Exhibit.......................................................................................................................................................23
EFAS Table for Air New Zealand Company 2017....................................................................................23
IFAS Table for (name of Corporation) 2016.....................................................................................24
TOWS Matrix....................................................................................................................................27
Financial Ratio Analysis for (name of Corporation) 2014, 2015, and 2016 Years.............................28
Board of Directors Table for (name of Corporation) 2017.................................................................30
Top Management Table for (Air New Zealand) 2017........................................................................31
Appendix-2................................................................................................................................................33
Income statement of Air New Zealand Company......................................................................................33

Financial Performance of Air New Zealand Company 3 | P a g e
Introduction
With the ramified economic changes and complex business structure of the organization,
each and every organization needs to take effective financial business decision making. There are
several financial tools which could be gauged by the business organizations to make effective
financial decisions with a view to increasing the overall return on capital employed. In this
report, the financial performance of the Air New Zealand Company has been taken into
consideration. This report reflects the key financial performance and effective business
functioning of Air New Zealand Company.
Description of the Company
Air New Zealand Limited is the flag carrier airline of New Zealand Company based in
Auckland, the airline operates scheduled passenger flights to more than 30 domestics and 31
international destinations in 19th countries around the Pacific Rim and the United Kingdom.
This company was incorporated under the corporation act of New Zealand.
Air New Zealand has been providing its air and cargo services in the Airline industry of
New Zealand and other countries as well (Air New Zealand, 2017).
This company was founded in 1940 and managed by New Zealand government agency to
start up new airline business
Current situation of the Air New Zealand Company
After analyzing the financial performance of Air New Zealand Company, it is observed that
management of the company is planning to expand its business by entering into strategic alliance
with other organization. It is the group of airlines that offer international and domestic
passengers and cargo transportation services. The company aims to become the number one
airline company by serving district airline services for the best support of the customers. The
existing value chain activities of the company are divided into two main parts such as inbound
activities and outbound activities (Yahoo Finance, 2017).

Financial Performance of Air New Zealand Company 4 | P a g e
Current performance of Air New Zealand Company
The stock price of the company is NZ$ 3.38 -0.04 (-1.03%) which reflects that company
has reduced its market value by 1.03% since last one year. The key person of the company is
Christopher Luxon, CEO. The total revenue of the company is NZ$5,231 million (2016) which is
20% higher as compared to last five year annual data. In addition to this, the overall profit of the
company is NZ$463 million (2016 which shows that company has created strong value and
return on profit (Duchin and Sosyura, 2014).
Strategic posture of the Air New Zealand Company
The primary activity of the company is accompanied with the procurement of the human
resources, research, and development of biochemical. Air New Zealand Company has hired
highly skilled employees who are efficient in handling all the inbound and outbound activities
with a view to increasing the overall effectiveness of the work. The support activity of the
company is highly advance and accompanied by the cyber computing system (Brigham and
Ehrhardt, 2013).

Financial Performance of Air New Zealand Company 5 | P a g e
Internal environment: Strength and Weakness of Air New Zealand Company
Internal environment ‘analysis of New Zealand Company
The current performance of Air New Zealand Company could be analyzed on the basis of
financial performance of the company. After analyzing the annual report and financial statement
of the company, it is observed that company has increased its overall return on capital employed
by the company (Baños-Caballero, et al. 2014).
Liquidity ratio of the company
The current ratio of the company reveals company's ability to pay off its short term and long
term debts by using the current assets of the company.
Current ratio
In the starting, Air New Zealand Company had 1.09 current ratio which decreased to .78 in
2017. It shows that company has reduced its investment in the operating activities and more
inclined towards creating value on its investment. It may put the company in the negative
situation when the demand for its products and services are high in the market. However, as
compared to its market industry current ratio, the company has maintained the higher current
ratio.
Description Formula AIR NEW ZEALAND LTD
Market
industry
ratio
2013-
06
2014-
06
2015-
06
2016-
06
2017-
06
TTM

Financial Performance of Air New Zealand Company 6 | P a g e
Current ratio
Current
assets/current
liabilities 1.09 0.98 0.93
0
.95
0
.78
.65
Quick Ratio
Current assets-
Inventory/current
liabilities 1.00 0.89 0.88
0
.90
0
.75
.72
Quick ratio
This ratio reflects company's ability to pay its short term and long term debts through its
immediate available cash in its business. It is observed that Air New Zealand Company had 1.00
quick ratios in 2013 and after five years it has decreased this ratio to .78 in 2017. The market
industry quick ratio is .72 which is lower than the quick ratio of Air New Zealand Company
(Grant, 2016).
Profitability ratio
This ratio of the Air New Zealand Company shows its profitability or ability to earn profit from
its overall sales.
The profitability of the company has increased throughout the time and in order to assess the
same, following ratios have been computed (Tsui, 2017).
Net profit margin ratio- This ratio reflects that company has increased its overall profit earning
capacity since last five years. It is observed that company has increased its net margin from
3.94% to 8.5% since last five years. It shows that company has created value for its investment.
However, it is observed that as compared to the market industry net profit margin, it has reduced
its net profit margin ratio throughout the time.
Description Formula AIR NEW ZEALAND LTD Market

Financial Performance of Air New Zealand Company 7 | P a g e
industry
ratio
2013-
06
2014-
06
2015-
06
2016-
06 2017-06
TTM
Net margin
Net
profit/revenues 3.94% 5.62% 6.64%
8.85
% 7.48%
8.50%
Return on
equity
Net
profit/Equity 10.03%
14.00
% 16.64%
21.96
% 19.23%
15.25%
Return on equity- this ratio reflects company's ability to give profit partition to its shareholders
from its earning. It shows how profit is earned by the shareholders in their invested capital in the
capital. It is analyzed that in 2013, the company had the net profit of 10.3% which increased to
19.23% in 2017 which shows that company has increased its profit since last five years. In
addition to this, the market industry ratio of the company is 15.25% which is lower than the
return on equity of the company. Therefore, it could be inferred that company has created value
on its investment and increased its return on equity with an effective percentage.
Efficiency ratio
This ratio reflects company’s ability to efficiently use all the capital throughout the time. It is
observed that company has blocked its funds in its receivable turnover which may increase its
overall cost of capital (Niu, et al. 2017).
Receivable turnover ratio- This ratio shows that company has blocked more of its funds in its
receivable turnover. It is observed that company had 24.19 points receivable turnover in 2013
which has gone down to 21.08 points in 2017. It shows that company has decreased its overall

Financial Performance of Air New Zealand Company 8 | P a g e
receivable turnover. This shows that company is effectively reducing its overall capital blockage
throughout the time (Flannery, 2016).
Creditor’s turnover ratio- This ratio shows company’s ability to manage the funds in its business
and increase the overall return on capital employed. It is observed that company has increased its
creditor's turnover ratio to 203.91 in 2017 as compared to last five year data. However, it is the
good indicator of the business functioning of the organization. It shows that company has
efficiently blocking funds in this business and increasing its return on capital employed
throughout the time.
Description Formula AIR NEW ZEALAND LTD
Market
industry
ratio
2013-
06
2014-
06
2015-
06
2016-
06
2017-
06 TTM
Receivables
collection
period
Receivables/
Total
sales*365
2
4.19
2
3.33
2
2.09
2
0.93
21
.08 25.36
Payables
collection
period
Payables/
Cost of
sales*365
11
5.81
12
9.59
15
0.16
19
5.44
203
.91 207.25
Asset
turnover
ratio
Total sales/
Total assets 0.82 0.80 0.73 0.72
0
.71 0.6

Financial Performance of Air New Zealand Company 9 | P a g e
Assets turnover ratio- This ratio shows company’s ability to deploy its overall sales to create
value. It is observed that company has increased its assets turnover ratio by increasing its overall
creditors throughout the time. The assets turnover of the market industry is .6 which is lower
than the data shown by the Air New Zealand Company. Therefore, it is inferred that company
has maintained an effective assets turnover ratio.
Solvency ratio
This ratio helps in assessment of the financial risk and capital structure of the organization. It is
observed that solvency ratio of the company has been dividing into following two parts (Ehiedu,
2014).
Debt to equity ratio- This ratio shows that company has increased its debt portion since last five
years. In 2017, Air New Zealand Company has 2.61 debts to equity ratio. However, keeping debt
to equity ratio may result in decreased financial leverage but at the same time, it will increase the
overall cost of capital of the organization. It is assessed that company needs to establish the
proper equilibrium in its debt to equity. The debt to equity ratio of the market industry is 3.61
which show that company could increase the overall efficiency by increasing its debt portion
(Douglas, & Tan, 2017).
Descriptio
n Formula AIR NEW ZEALAND LTD
Market
industr
y ratio
2013-06 2014-06 2015-06
2016
-06 2017-06 TTM

Financial Performance of Air New Zealand Company 10 | P a g e
Debt to
Equity
Ratio
Debt/
Equity
2.
09
2.
13
2.
45 2.44
2.
61 3.61
Debt to
assets
Debt/ Total
assets
0.
68
0.
68
0.
71 0.71
0.
72 0.93
Gearing
ratio
EBIT/
interest
3.406593
4
4.477777
8
4.870370
4 7.1
6.56321
8 7.2
Debt to assets of the company
The debt to assets of the company has increased from the .68 to .72 in 2017. It shows that
company has increased its value by increasing the market value. It is observed that company
needs to set up the proper relation between its debt and assets to create value on the investment.
The market industry debt to assets ratio is .93 which is higher than company's data. However, the
company could increase its debt portion to keep the cost of the capital low of the business
(Arblaster, 2014).
Gearing ratio
This ratio shows company's ability to pay off interest amount from the EBIT of the company.
Currently, the company has maintained 6.56 gearing ratio which is stable and 100% as compared
to last five year data. In addition to this, market industry gearing ratio is 7.2 which is higher as
compared to Air New Zealand. Therefore, the company needs to increase its gearing ratio with a
view to maintain average gearing ratio of the industry (Peeters, et al. 2016).
IFAS table summary
After analyzing all the above details and financial performance of the company, it could be
inferred that company has increased its overall profitability and efficiency of the business. It is

Financial Performance of Air New Zealand Company 11 | P a g e
assessed that company has efficiently used its capital and blocked less amount of funds in its
business. It is revealed that company has a low financial risk in its business. If it wants to lower
down its cost of capital of the business then the same could be easily done by the management of
the company by increasing the debt portion (White, Sondh, and Fried, 2015).
Corporate culture
The corporate culture of the Air New Zealand Company is highly advance and all the employees
of the company need to follow standards work policies and rules. It is observed that company has
installed advanced system and technologies in its business with a view to set up new automation
in the work system of the organization. The corporate culture of the company is highly open and
employees oriented which is designed with a view to promote the employees and set up nexus
between employee’s growth and organization development (Brown, 2016).
Corporate resources
This ratio analysis helps in assessment of the financial performance of the company by
establishing the relation between the two factors. It is observed that company has increased its
profitability and overall turnover since last five year which is the positive indicator of the
effective business functioning of the organization. However, with the changes in time, the
company has increased its debt portion with a view to reducing the cost of capital of the business
and ultimately it has resulted to increase in the financial risk of the organization. The total
resources of the company are NZ $ 7,251.00 million which shows that company has a strong
financial position (Vibart, et al. 2015).
Summary of Internal Factors
This internal factor analysis summary assists in evaluating the strength, weakness,
opportunity, and threats of the organization. It is observed that company has strong research and
development department which is indulged in identifying the proper development of the
business. The strong management team of the Air New Zealand accompanied or accustomed to
act as per the directions and instruction of the Christopher Luxon, CEO is also making efforts to

Financial Performance of Air New Zealand Company 12 | P a g e
implement the strategic plan. The team of Air New Zealand has consistently increased its overall
turnover by attracting more clients through its high discounts and offers. The total revenue of the
company is NZ$5,231 million (2016) which is 20% higher as compared to last five year annual
data. In New Zealand, Air New Zealand has set up its business on an international level by
customizing its air services to local and international clients (Weygandt, Kimmel, and Kieso,
2015).

Financial Performance of Air New Zealand Company 13 | P a g e
Internal strategic factors as strengths and weaknesses based on the analysis and evaluation
Strength Weakness
Company has strong profitability which will
help it to increase its overall market share.
the return on capital employed is also very
strong which shows positive busienss
functioning.
Company should expand its busienss in other
international market to increase its overall
return on capital employed.
In addition to this, return on capital employed
has also increased due to increase in its overall
sales and increased efficiency of the business.
The debt to equity of the company is already
too low. Therefore, company by using proper
strategic plan and increasing the overall debt
portion could reduce the overall cost of capital
and increase the return of the business (Tseng,
and Chiang, 2016).
The main weakness of the company is high
complexity of legal compliance.
Company may face issue in its busienss due to
the use of obsolete machines and plants
(Mitchell, and Schreiber, 2016).
It will increase the overall cost of the capital
and ultimately reduce the overall earning of the
organization. It is further observed that Air
New Zealand also needs to comply with the
international rules and applicable international
financial accounting standards in its reporting
frameworks. It will not only increase the
overall capital costing if the company fails to
manage the business but also increase the
overall complexity of the business at large
(Mwangi, and Murigu, 2015). `

Financial Performance of Air New Zealand Company 14 | P a g e
IFAS summary
There is below given IFRS summary of the Air New Zealand organization
Internal factors Wgt. Rating Wgt. Score Description/
Comment
Strong
profitability
4 5 2.1 It has increased
its overall sales
by 20% since last
five years.
IT has strong
profitability
which shows
makeable results
for the business
of New Zealand.
Strong
management of
the team
.4 4 2.2 The business
model and
inventory
management
system has been
designed in such
a way which
assists clients to
maintain
effective
operating
activities in
cargo and air

Financial Performance of Air New Zealand Company 15 | P a g e
services.
Excellent design
and strong brand
image
3 4 2.5 Air New Zealand
has been running
its airline
services for very
long time. It has
covered more
than 27% market
share of New
Zealand. The
Airplanes and
cargo jets of the
company is
designed for
rendering high-
quality services
to clients
Large market
share and
international
business
coverage
5 4 2.8 The CEO of the
company takes
all the strategic
decision and
increased overall
turnover shows
that company has
increased its
business
efficiency with
the drastic rate.

Financial Performance of Air New Zealand Company 16 | P a g e
Top Management of the Air New Zealand Company
There are several persons who fall under the key managerial persons of the organization.
However, Christophe Luxon is is the present CEO of the company who takes all the managerial
decisions for the betterment of the organization (Barnett, et al, 2015).
Name
Ag
e Since Current Position
59 2013 Independent Non-Executive Chairman of the Board
2013 Chief Executive Officer
2013 Independent Non-Executive Deputy Chairman of the Board
2009 Chief Financial Officer
2016 General Counsel, Company Secretary
2017 Chief Strategy, Networks and Alliances Officer
2016 Chief Air Operations and People Safety Officer
2013 Independent Non-Executive Director

Financial Performance of Air New Zealand Company 17 | P a g e
2014 Independent Non-Executive Director
2017 Independent Non-Executive Director
2014 Independent Non-Executive Director
2016 Independent Non-Executive Director
The direct of the company is John Key how takes all the strategic decisions. The Therese T.
Walsh is the independent non-executive director who is indulged in taking strategic decisions for
the better handling of the audit committee and organization risk at large. Janice Amelia is also
appointed at the Janice Amelia Dawson in Air New Zealand Airline who will indulge in the
operational decisions of the company (Adler, et al. 2017).
ANALYSIS OF STRATEGIC FACTORS (SWOT)
This analysis assists in analyzing all the internal and external factors of the Air New Zealand
Company. It shows that company has the strong financial position in the market and increased its
overall efficiency of the business. However, below given SWOT analysis assists in evaluating
the financial performance and business functioning of the organization (Clark, et al. 2014).
Strength Weakness

Financial Performance of Air New Zealand Company 18 | P a g e
The company has strong profitability in its
business.
It has maintained low financial risk in its
business which could be used to increase its
debt portion and reduce the cost of capital
The management of the Air New Zealand is
also highly qualified who takes all the strategic
decisions.
Air New Zealand by using the strategic
alliance with other sub-organizations could
easily lower down its cost of capital.
It has to comply with the all the international
and domestic rules and regulations.
Air New Zealand may face the increased cost
of capital due to high penalties and corporate
governance issues. In order to attract clients, it
has to give the high amount of offers and
discount to attract more clients in the market. It
results in loss of the capital to the organization.
High fluctuation in external factors may result
to the destruction of business and high business
risk.
Opportunity
The New Zealand market is accompanied by
the high number of the population who are the
potential clients for the Air New Zealand.
Air New Zealand could also use air and cargo
services.
With the online business and booking, Air New
Zealand is finding increased growth in its
business and overall turnover throughout the
time.
Threats
The main threat to the Air New Zealand is
based on the rival's attractive offering.
There are several international airline service
providers who are hitting the New Zealand
Airline industry with their attractive offers and
least price flight offers.

Financial Performance of Air New Zealand Company 19 | P a g e
STRATEGIC ALTERNATIVES & RECOMMENDED STRATEGY
There are several strategic alternatives and recommended strategies which could be used by Air
New Zealand organization to increase its overall market share either on domestic level or
international level (Aulenbach, S. 2016).
 Air New Zealand should enter into strategic alliance with the other organizations to decrease its
overall sales and increase the market share at large.
 Using attractive offers and high discount on flights may attract the high number of domestic and
international clients (Mitchell, and Schreiber, 2016).
 In context with the financial management, Air New Zealand could increase its overall capital by
increasing its debt portion. It will result to the reduction in the overall cost of capital.
 High profitability and low financial risk will increase the overall efficiency of the business and
increase the output of the organization.
 The company should hire more experts’ employees to increase its overall turnover and quality of
its airline services (Dominick, 2013).

Financial Performance of Air New Zealand Company 20 | P a g e
References
Adler, R., Stringer, C., Shantripriyan, P., Birch, M. G., & Tohmatsu, D. T. (2017). AirAsia:
Towards a ‘new world’carrier strategy and implications for performance management system
design.
Air New Zealand, (2017), New Zealand Company’, , retrieved on 13th April, 2018..
Arblaster, M. (2014). The design of light-handed regulation of airports: Lessons from experience
in Australia and New Zealand. Journal of Air Transport Management, 38, 27-35.
Aulenbach, S. 2016. Business Deconstructed-QANTAS AIRWAYS LIMITED.
Baños-Caballero, S., García-Teruel, P.J. and Martínez-Solano, P., (2014). Working capital
management, corporate performance, and financial constraints. Journal of Business
Research, 67(3), pp.332-338..
Barnett, A.G., Williams, G.M., Schwartz, J., Neller, A.H., Best, T.L., Petroeschevsky, A.L. &
Simpson, R.W., (2015). Air pollution and child respiratory health: a case-crossover study in
Australia and New Zealand. American journal of respiratory and critical care
medicine, 171(11), pp.1272-1278.
Brigham, E.F. and Ehrhardt, M.C., (2013). Financial management: Theory & practice. Cengage
Learning.
Brown, R. S. (2016). Lobbying, political connectedness and financial performance in the air
transportation industry. Journal of Air Transport Management, 54, 61-69.
Clark, C. J., Schweppes, C., Campbell, D., Valley, C., Charney, D., Motorcycles, C. C., and
Schenker, D. B. (2014). BSA Group (Birmingham Small Arms Company) 96–7, 160 Budweiser
146 Burger King 140 Butlins 99. communications, 201, 11.
Dominick, M. (2013). Air New Zealand. Strategic Analysis and Recommendations..

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Douglas, I., & Tan, D. (2017). Global airline alliances and profitability: A difference-in-
difference analysis. Transportation Research Part A: Policy and Practice, 103, 432-443.
Duchin, R. and Sosyura, D., (2014). Safer ratios, riskier portfolios: Banks׳ response to
government aid. Journal of Financial Economics, 113(1), pp.1-28.
Ehiedu, V.C., (2014). The impact of liquidity on profitability of some selected companies: The
financial statement analysis (FSA) approach. Research Journal of Finance and Accounting, 5(5),
pp.81-90.
Flannery, M.J., (2016). Stabilizing large financial institutions with contingent capital
certificates. Quarterly Journal of Finance, 6(02), p.1650006.
Grant, R.M., (2016). Contemporary strategy analysis: Text and cases edition. John Wiley
Hodge, G. (2018). Privatization: An international review of performance. Routledge.
Mitchell, R., and Schreiber, 2016. Wine tourism networks and clusters: operation and barriers in
New Zealand. Micro-Clusters nd Networks, 79.
Morrell, P. S. (2016). Moving boxes by air: the economics of international air cargo. Routledge.
Mwangi, M. & Murigu, J.W., (2015). The determinants of financial performance in general
insurance companies in Kenya. European Scientific Journal, ESJ, 11(1).
Niu, J., Chang, C. P., Yang, X. Y., & Wang, J. S. (2017). The long-run relationships between
energy efficiency and environmental performance: Global evidence. Energy &
Environment, 28(7), 706-724.
Peeters, P., Higham, J., Kutzner, D., Cohen, S., & Gössling, S. (2016). Are technology myths
stalling aviation climate policy?. Transportation Research Part D: Transport and
Environment, 44, 30-42.
Simply Wall Street, (2017), ‘TESCO (ASX: TESCO): Time for a Financial Health Check’,

Financial Performance of Air New Zealand Company 22 | P a g e
Tseng, F.M. and Chiang, L.L.L., 2016. Why does customer co-creation improve new travel
product performance?. Journal of Business Research, 69(6), pp.2309-2317.
Tsui, K. W. H. (2017). Does a low-cost carrier lead the domestic tourism demand and growth of
New Zealand?. Tourism Management, 60, 390-403.
Tsui, K. W. H. (2017). Does a low-cost carrier lead the domestic tourism demand and growth of
New Zealand?. Tourism Management, 60, 390-403.
Vibart, R., Vogeler, I., Dennis, S., Kaye-Blake, W., Monaghan, R., Burggraaf, V., ... & Mackay,
A. (2015). A regional assessment of the cost and effectiveness of mitigation measures for
reducing nutrient losses to water and greenhouse gas emissions to air from pastoral
farms. Journal of environmental management, 156, 276-289.
Weygandt, J.J., Kimmel, P.D. & Kieso, D.E., (2015). Financial & managerial accounting. John
Wiley & Sons.
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Yahoo Finance, (2017), ‘Air New Zealand Company, , retrieved on 13th April, 2018.

Financial Performance of Air New Zealand Company 23 | P a g e
Exhibit
EFAS Table for Air New Zealand Company 2017
Place your EFAS table
Internal factors Wgt. Rating Wgt. Score Description/
Comment
Political factors 5 4 2.1 It has complied
all the laws and
adapted its
busienss as per
the political
factors of the Air
New Zealand
company
Social factors .4 4 2.2 The management
has been
designed in such
a way which
assists clients to
maintain
effective
operating
activities in
cargo and air
services.
Economic factors 3 4 2.5 It has covered
more than 27%

Financial Performance of Air New Zealand Company 24 | P a g e
market share of
the New Zealand.
The GDP of the
New Zealand has
increased by
20% since last
five years.
Legal factors 5 4 2.8 Complied with
the all the legal
laws and set up
effective
corporate
governance.
Technological
factors
4 5 2.9 Cyber computing
system and
advance
technologies is
used to make the
busienss of Air
New Zealand
business
effective.
IFAS Table for (name of Corporation) 2016
Place your IFAS table here
IFAS summary

Financial Performance of Air New Zealand Company 25 | P a g e
There is below given IFRS summary of the Air New Zealand organization
Internal factors Wgt. Rating Wgt. Score Description/
Comment
Strong
profitability
4 5 2.1 It has increased
its overall sales
by 20% since last
five years.
IT has strong
profitability
which shows
makeable results
for the business
of the New
Zealand.
Strong
management of
the team
.4 4 2.2 The busienss
model and
inventory
management
system has been
designed in such
a way which
assists clients to
maintain
effective
operating
activities in
cargo and air
services.

Financial Performance of Air New Zealand Company 26 | P a g e
Excellent design
and strong brand
image
3 4 2.5 Air New Zealand
has been running
its airline
services since
very long time. It
has covered more
than 27% market
share of the New
Zealand. The
Airplanes and
cargo jets of the
company is
designed for
rendering high
quality services
to clients
Large market
share and
international
busienss
coverage
5 4 2.8 The CEO of the
company takes
all the strategic
decision and
increased overall
turnover shows
that company has
increased its
busienss
efficiency with
the drastic rate.

Financial Performance of Air New Zealand Company 27 | P a g e
TOWS Matrix
Strength
Company has strong profitability in its
business.
It has maintained low financial risk in its
busienss which could be used to increase its
debt portion and reduce the cost of capital
The management of the Air New Zealand is
also highly qualified who takes all the strategic
decisions.
Air New Zealand by using strategic alliance
with other sub organizations could easily lower
down its cost of capital.
Weakness
It has to comply with the all the international
and domestic rules and regulations.
Air New Zealand may face increased cost of
capital due to high penalties and corporate
governance issues.
In order to attract clients it has to give high
amount of offers and discount to attract more
clients in market. It results to loss of the capital
to organization.
High fluctuation in external factors may results
to destruction of busienss and high busienss
risk.
Opportunity
The New Zealand market is accompanied with
the high number of population who are the
potential clients for the Air New Zealand.
Air New Zealand could also use air and cargo
services.
With the online business and booking, Air New
Zealand is finding increased growth in its
busienss and overall turnover throughout the
time.
Threats
The main threat for the Air New Zealand is
based on the rival’s attractive offering.
There are several international airline service
providers who are hitting the New Zealand
Airline industry with their attractive offers and
least price flight offers.

Financial Performance of Air New Zealand Company 28 | P a g e
Financial Ratio Analysis for (name of Corporation) 2014, 2015, and 2016 Years
Descriptio
n Formula AIR NEW ZEALAND LTD
Marke
t
indust
ry
ratio
2013-06 2014-06 2015-06
2016-
06
2017-
06 TTM
Profitabili
ty
Net
margin
Net
profit/revenue
s 3.94% 5.62% 6.64% 8.85% 7.48% 8.50%
Return on
equity
Net
profit/Equity 10.03% 14.00% 16.64%
21.96
% 19.23%
15.25
%
Liquidity
Current
ratio
Current
assets/current
liabilities
1.
09
0.
98
0.
93 0.95
0.
78 0.65

Financial Performance of Air New Zealand Company 29 | P a g e
Quick
Ratio
Current
assets-
Inventory/curr
ent liabilities
1.
00
0.
89
0.
88 0.90
0.
75 0.72
Efficiency
Receivabl
es
collection
period
Receivables/
Total
sales*365
24.
19
23.
33
22.
09
2
0.93
21.
08 25.36
Payables
collection
period
Payables/ Cost
of sales*365
115.
81
129.
59
150.
16
19
5.44
203.
91 207.25
Asset
turnover
ratio
Total sales/
Total assets
0.
82
0.
80
0.
73 0.72
0.
71 0.6
Solvency

Financial Performance of Air New Zealand Company 30 | P a g e
Debt to
Equity
Ratio Debt/ Equity
2.
09
2.
13
2.
45 2.44
2.
61 3.61
Debt to
assets
Debt/ Total
assets
0.
68
0.
68
0.
71 0.71
0.
72 0.93
Gearing
ratio EBIT/interest
3.40659
34
4.47777
78
4.87037
04 7.1
6.5632
18 7.2
Board of Directors Table for (name of Corporation) 2017
Name Age
Sinc
e Current Position
59 2013 Independent Non-Executive Chairman of the Board
2013 Chief Executive Officer
2013 Independent Non-Executive Deputy Chairman of the Board
2009 Chief Financial Officer

Financial Performance of Air New Zealand Company 31 | P a g e
2016 General Counsel, Company Secretary
2017 Chief Strategy, Networks and Alliances Officer
2016 Chief Air Operations and People Safety Officer
2013 Independent Non-Executive Director
2014 Independent Non-Executive Director
2017 Independent Non-Executive Director
2014 Independent Non-Executive Director
2016 Independent Non-Executive Director
Top Management Table for (Air New Zealand) 2017
Key Person Name
Christopher Luxon CEO

Financial Performance of Air New Zealand Company 32 | P a g e
Jodie King Chief people officer
Cam Wallace Chief revenue officer
Mik Tod Chief Marketing and customer officer
Captain David Chief operation integrity

Financial Performance of Air New Zealand Company 33 | P a g e
Appendix-2
Income statement of Air New Zealand Company
AIR NEW ZEALAND LTD (AIZ) Cash Flow Flag INCOME STATEMENT
Fiscal year ends in June. NZD in millions
except per share data.
2013-
06
2014-
06
2015-
06
2016-
06
2017-
06 TTM
Revenue 4618 4663 4925 5231 5109 5334
Cost of revenue 1204 1121 1089 846 827 907
Gross profit 3414 3542 3836 4385 4282 4427
Operating expenses
Sales, General and administrative 1343 1431 1542 1677 1671 1684
Other operating expenses 1761 1708 1768 1998 2040 2178
Total operating expenses 3104 3139 3310 3675 3711 3862
Operating income 310 403 526 710 571 565
Interest Expense 91 90 108 100 87 78
Other income (expense) 37 44 56 53 43 14

Financial Performance of Air New Zealand Company 34 | P a g e
Income before income taxes 256 357 474 663 527 501
Provision for income taxes 74 95 147 200 145 143
Net income from continuing ops 182 262 327 463 382 358
Net income 182 262 327 463 382 358
Net income available to common shareholders 182 262 327 463 382 358
Earnings per share
Basic 0.17 0.23 0.29 0.41 0.34 0.32
Diluted 0.17 0.23 0.29 0.4 0.34 0.31
Weighted average shares outstanding
Basic 1096 1101 1118 1122 1123 1122
Diluted 1103 1110 1124 1135 1140 1143
EBITDA 758 883 984 1228 1107 1088

Financial Performance of Air New Zealand Company 35 | P a g e
Balance sheet of Air New Zealand Company
AIR NEW ZEALAND LTD (AIZ) Cash Flow Flag BALANCE SHEET
Fiscal year ends in June. NZD in millions except
per share data.
2013-
06
2014-
06
2015-
06
2016-
06
2017-
06
Assets
Current assets
Cash
Cash and cash equivalents 1150 1234 1321 1594 1369
Short-term investments 98 30 103 92 19
Total cash 1248 1264 1424 1686 1388
Receivables 306 298 298 300 295
Inventories 155 169 120 103 86
Prepaid expenses 44 51 71 73 91
Other current assets 105 45 69 177 27
Total current assets 1858 1827 1982 2339 1887

Financial Performance of Air New Zealand Company 36 | P a g e
Non-current assets
Property, plant and equipment
Gross property, plant and equipment 4907 5339 6314 6845 7153
Accumulated Depreciation -1970 -2262 -2253 -2360 -2408
Net property, plant and equipment 2937 3077 4061 4485 4745
Equity and other investments 307 470 428 230 259
Goodwill 1 1
Intangible assets 66 78 102 127 149
Other long-term assets 443 397 202 70 131
Total non-current assets 3754 4023 4793 4912 5284
Total assets 5612 5850 6775 7251 7171
Liabilities and stockholders' equity
Liabilities
Current liabilities

Financial Performance of Air New Zealand Company 37 | P a g e
Short-term debt 15 22 46 239 132
Capital leases 144 168 207 225 185
Accounts payable 382 398 448 453 462
Deferred income taxes 27 52 20 54 36
Deferred revenues 918 930 1055 1111 1177
Other current liabilities 224 302 352 389 413
Total current liabilities 1710 1872 2128 2471 2405
Non-current liabilities
Long-term debt 219 341 616 841 1161
Capital leases 1251 1202 1453 1262 1036
Deferred taxes liabilities 310 229 228 164 193
Other long-term liabilities 306 334 385 405 390
Total non-current liabilities 2086 2106 2682 2672 2780
Total liabilities 3796 3978 4810 5143 5185

Financial Performance of Air New Zealand Company 38 | P a g e
Stockholders' equity
Common stock 2277 2282 2286 2252 2238
Retained earnings -521 -373 -351
Accumulated other comprehensive income 59 -37 30 -144 -252
Total stockholders' equity 1815 1872 1965 2108 1986
Total liabilities and stockholders' equity 5611 5850 6775 7251 7171
Cash flow statement of New Zealand Company
AIR NEW ZEALAND LTD (AIZ) Statement of CASH FLOW
Fiscal year ends in June. NZD in millions
except per share data.
2013-
06
2014-
06
2015-
06
2016-
06
2017-
06
TT
M
Cash Flows From Operating Activities
Other non-cash items 750 730 1100 1074 904 1007
Net cash provided by operating activities 750 730 1100 1074 904 1007
Cash Flows From Investing Activities

Financial Performance of Air New Zealand Company 39 | P a g e
Investments in property, plant, and equipment -382 -644 -1118 -998 -853 -727
Property, plant, and equipment reductions 9 27 46 57 60 49
Acquisitions, net 44
Purchases of investments -46 -136 -13 -2
Sales/Maturities of investments 281 205 137
Purchases of intangibles -44
Other investing activities -17 26 -38 -137 -15 -136
Net cash used for investing activities -480 -727 -1066 -797 -616 -679
Cash Flows From Financing Activities
Debt issued 114 376 576 564 512 307
Debt repayment -149 -157 -327 -344 -485 -357
Common stock issued 1 1
Repurchases of treasury stock -11
Cash dividends paid -72 -108 -258 -230 -530 -248

Financial Performance of Air New Zealand Company 40 | P a g e
Other financing activities -30 -31 62 6 -10 22
Net cash provided by (used for) financing
activities -147 81 53 -4 -513 -276
Net change in cash 123 84 87 273 -225 52
Cash at beginning of period 1027 1150 1234 1321 1594 1288
Cash at end of period 1150 1234 1321 1594 1369 1340
Free Cash Flow
Operating cash flow 750 730 1100 1074 904 1007
Capital expenditure -426 -644 -1118 -998 -853 -727
Free cash flow 324 86 -18 76 51 280
Supplemental schedule of cash flow data
Cash paid for income taxes 28 119 170 185 116 80
Cash paid for interest 84 79 98 96 77 70