Air New Zealand Limited

December 2000 Interim Result Presentation

Date : 20 February 2001

2

Result Overview

3

FY01 Interim Result Highlights

$m H1-01 H1-00 %

Revenue 4,311.5 1,803.9 139.0

EBITDRA 578.4 316.9 82.5

Pre Tax Op (Deficit)/Surplus (1.1) 76.8 (101.5)

Unusual Charges (31.8) 50.2 (163.3)

Associates Contribution 7.2 51.9 (86.1)

Tax Benefit (29.5) 51.6 (157.1)

Net Profit After Tax:

- Excl. Unusuals 24.8 83.4 (70.3)

- Incl. Unusuals 3.8 127.2 (97.0)

Cash flow from operations 189.1 157.9 19.8

4

Balance Sheet

As at 31 Dec 00 30 Jun 00 % 31 Dec 99

Net Debt (m) 3,147.1 3,107.6 1.3 1,186.9

Gearing (%) 62.3 66.2 (5.9) 34.7

Gearing incl. Leases (%) 76.5 75.7 1.1 56.2

Return on Ave Equity (%) 0.4 8.3 (95.6) 11.7

NTA/Share 2.72 2.46 10.6 3.58

DPS (C) 4.0 9.0 n/a 6.0

5

Results in Detail

6

Results in Context

• Obviously one of the most difficult trading periods experienced— Fuel Price at 10 year highs— NZD and AUD at all time lows against the USD— Increased competition on the Australian domestic market— Introduction of GST in Australia— Reduced Domestic travel in Australia due to Olympics— Increased competition and capacity on Tasman, Pacific and Atlantic

• Some positives— International traffic during the Olympic period— FX benefits on the revenue side— Hedging gains (Fuel and FX) of NZ$110.7m— Other benefits

• All whilst integration is occurring and without a C.E.O.

7

Inbound Growth Continues, Outbound Recovering

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NZ Arrivals Aust Arrivals NZ Outbound Aust Outbound

8

Australian Domestic Passenger Market

0

5,000,000

10,000,000

15,000,000

+ 7.2%

Australian Passenger Growth: 2000 v. 1999

Jun-Nov 1999 Jun-Nov 2000

9

Air New Zealand: International Airline(Excluding Tasman)

H1-01 H1-00 %

ASKs (m) 10,823 10,247 5.6RPKs (m) 8,086 7,242 11.7Passenger Load Factor (%) 74.7 70.7 5.7

Passenger Revenue ($m) 890.3 711.8 25.1

Yield/RPK 11.0 9.8 12.2

10

Australasian Market(Including Aust & NZ Domestic Trunk and Regional, & Trans-Tasman)

H1-01 H1-00* %

ASKs (m) 14,320 13,377 7.0RPKs (m) 10,324 9,825 5.1Passenger Load Factor (%) 72.1 73.4 (1.8)

Passenger Revenue ($m) 2,337.1 2,145.6 8.9

Yield/RPK 22.6 21.8 3.7

Yield includes benefit of NZ$ depreciation against AU$. Adjusting for thisbenefit, Yield/RPK is 21.7 (0.5% decrease)

*Includes pro-forma Ansett Domestic results for H1-00

11

Ansett International (49% owned)

AU$ H1-01 H1-00 % change

ASKs (m) 2,578 2,653 (2.8)RPKs (m) 1,859 1,975 (5.9)Passenger Load Factor (%) 72.1 74.4 (3.1)

Passenger Revenue ($m) 146.8 141.1 4.0

Yield/RPK 7.9 7.1 11.3

12

Revenue from Other Businesses

Total Other Revenue of $1,084.1 million:

• Cargo Revenue $319.4m

• Contract Services Revenue $159.8m

• Other Revenue - $604.9m— includes loyalty revenue, travel & tours revenue, in-flight sales etc

13

Operating Expenditure by Category

Labour28%

Sales & Marketing18%

Other12%

Maintenance & Overhaul

9%

Aircraft & Traffic8%

Fuel17%

Pax Services8%

(23%)

(10%)

(12%)

(11%)

(15%)

(20%)

(11%)

14

Operating Costs Impacted by Fuel & FX

10

12

14

16

Op Cost/ASK Op Cost/ASK ExclFuel Price Variance

Op Cost/ASK ExclFuel & FX Variances

Ce

nts

/AS

K

14.8

14.3

13.7

Costs exclude net interest, depreciation, amortisation, operating lease costs and abnormal items.

15

Group Fuel Position (Including Ansett International)

H1-01 H1-00* %

Total Consumption (m gallons) 303.7 285.1 6.5

USc per Gallon 94 73 28.9

Total Cost (US$m) 285.9 208.3 37.3

Total Cost (NZ$m) 677.6 391.9 72.9

Includes savings from hedging of US$27.8m (NZ$74.4m)

*Includes pro-forma Ansett for H1-00

16

Integration

• Savings to date lower than anticipated, however progress on:— Common IT platform— Procurement Savings— Management Reduction

• Redundancies— Mainly management at this stage— TVSS still in progress

• Full Year Forecast— Revenue projects will not deliver due to market conditions— Timing has been slower than first expected— Full range if initiatives being pursued

17

Outlook

18

Outlook

Based on current trading conditions, the outlook for the second half is uncertain

and there is potential for further deterioration in operating result in the short-term

Building blocks in place for medium term improvement in profitability and creation of shareholder value

19

Strategies

20

J Dell

Chief Financial Officer

L Doolan

GGM Corp, Govt & Int

Affairs

A Paterson

EGM Commercial

T Jensen

GGMOps

Technical

I Diamond

GGM Ops Services

G Lilly

GMAir NZ Int

G Kingshott

GM AN Int

P Elmsly

GMCargo

A Miller

GMAnsett

Domestic

N Thompson

GM Air NZDomestic/

Trans Tas & SWP

R Rosalky

GM Aust Regional Airlines

B Fitzgerald

GM Terminal Services

B Jacobson

GM ANNZES

Gary ToomeyManaging

Director & CEO

Gary ToomeyManaging

Director & CEO

NZ

C Tremain

GGM HR & Org Change

NZ

G Frazis

EGM StrategyAust

NZAust Aust Aust AustNZ NZ NZ

NZAust

NZ

Aust

NZ

M Flanagan

GGMAN/NZ

Integration NZ

TBA

EGM Australasia

Aust

Aust

Current Management Structure...

21

Business Performance Enhancement

Ansett International

NZ

NZ

Finance

Corp, Govt & Int Affairs

NZ

HR & Org Change

Strategy, Network & Marketing

t

Sales & Distribution Customer Service

Operations WorldwideAirport Svces

ANNZES

Ventures

G Toomey

Group President& CEO

G Toomey

Group President& CEO

Focus on growth of Aust regional / NZ Link airlines & smaller enterprises.

Integrates all airport delivery. Contains aircraft provisioning

Integrates all operations. Manages all pilots (except regionals). Australian & NZ pilots remain in separate structures.

Focus on customer service standards, delivery & consistency.Manages all cabin crew, inflight service staff & call centres (except regionals)

Focus on revenue generation across brands & optimisation of yield, agency relat’s

Focus on strategy development across markets, product, brand, loyalty, fleet, alliances & network integration, e-commerce

Integrates business performance activities

49% owned

New Structure...

22

Ansett International

NZ

NZ

A MoroneyCFO

& SVPFinance

NZ

L DoolanSVP Corp, Govt & Int

Affairs NZ

C Tremain SVP HR & Org

ChangeNZ

K TurnbullSVP Business Performance Enhancement

NZ

G FrazisSVP Strategy,

Network & Marketing

Aust

A. MillerSVP

Sales & Distribution

Aust

L GrantSVP

CustomerService

Aust

T Jensen

SVPOperations

Aust

B Fitzgerald

SVP Worldwide

Airport Svces Aust

B Jacobson

SVPANNZES

NZ

TBA

SVPVentures

NZ

G Toomey

Group President& CEO

G Toomey

Group President& CEO

No Change

Responsibilities Changed Somewhat

New Role

49% owned

Executive Management

23

Key Group Strategies

Strategies are being formulated to improve performance in the medium term

• Overall profit enhancement program

• Complete network and fleet planning

• Growing international operations

• Protecting strong New Zealand position

• New marketing plans

• Improve total customer service levels

• Brand positioning and simplification

• Harness alliance benefits

• Balance sheet management and funding

All strategies will be underpinned with detailed financial plans with the end aim of

creating value for shareholders.

24

Strategies - Ansett

Ansett, in particular, needs attention:

• Address capacity deficiencies and deteriorating market share

• Target sales growth through agents and corporates

• Extensive punctuality review

• Rebuild confidence in safety and reliability

• Review Australian trunk and regional networks

• Build accurate and reliable accounting and management reporting systems

• Review product and positioning with new competition

• Fleet replacement and rationalisation over time

• Improve cost position

25

Current Issues

• Hazelton— Currently have acceptances for 78.5%— Still awaiting decision from the ACCC

• Ansett Australia B767-200 Maintenance— All 7 aircraft now fully compliant— Maintenance Management Processes meet CASA Requirements— CASA general audit underway

• DVT— Have not been formally approached on legal proceedings— Warsaw convention— Acted responsibly by issuing warnings on tickets and in-flight products

• Targeted Voluntary Severance— Good response— Process is still underway and thus cannot give final data

Air New Zealand Limited

December 2000 Interim Result Presentation

Date : 20 February 2001