Air New Zealand's Outlook Improves As Border Reopens

We maintain our NZD 0.95 (AUD 0.88) fair value estimate for shares in Air New Zealand following a trading update. Bookings have improved following the reopening of the New Zealand border, with the airline now guiding to an underlying fiscal 2022 pretax loss of less than NZD 750 million (from less than NZD 800 million previously). We lower our fiscal 2022 underlying pretax loss to NZD 747 million, from NZD 788 million. Our longer-term forecasts remain intact. We think the worst is now behind Air New Zealand and the recent recapitalisation (see our note published March 31, "Corporate Action: Air New Zealand Rights Are Cheap as Chips") places the airline in a strong financial position to thrive as air travel returns.