Morningstar

Air New Zealand Ltd AIR

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Stock XNZE Rating as of
NZD 0.53 0.01 (0.93%)
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As of Delayed Price Closed

Company Report

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Air New Zealand Earnings: Maintenance Woes to Crimp Capacity Growth

Angus Hewitt

Profitability at Air New Zealand has moderated significantly. Fiscal 2024 underlying profit before tax of NZD 222 million was within guidance and about 2% below our forecast, but down 61% from near-record profits in fiscal 2023. Conditions have normalized. Pent-up demand has exhausted, previously constrained industry capacity has eased, and price competition has returned. The second half deteriorated further from first-half pretax profit of NZD 185 million amid cost inflation, engine maintenance issues, a soft economic backdrop in New Zealand, and increased competition on North American routes.

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Price vs Fair Value

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AIR is trading at a 789% premium.
Price
NZD 0.53
Fair Value
NZD 4.30
Uncertainty
High
1-Star Price
NZD 4.97
5-Star Price
NZD 8.61
Economic Moat
Mlmg
Capital Allocation
Hxlrrys

Bulls Say, Bears Say

Bulls

Air New Zealand is the largest airline in the domestic market, and new entrants would likely struggle to build the scale and route frequency to attract corporate customers.

Bears

Air New Zealand is exposed to cyclical factors outside management’s control, including passenger demand, fuel prices, and exchange rates.

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News

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Trading Information

Previous Close Price
NZD 0.54
Day Range
NZD 0.53–0.54
52-Week Range
NZD 0.51–0.75
Bid/Ask
NZD 0.53 / NZD 0.54
Market Cap
NZD 1.79 Bil
Volume/Avg
1.4 Mil / 1.1 Mil

Key Statistics

Price/Earnings (Normalized)
10.65
Price/Sales
0.26
Dividend Yield (Trailing)
6.60%
Dividend Yield (Forward)
5.66%
Total Yield
6.60%

Company Profile

Air New Zealand, majority owned by the New Zealand government, provides air passenger and cargo transport services within New Zealand as well as to and from Australia, the Southwest Pacific, Asia, North America, the United Kingdom, and South America. Air New Zealand also encompasses business units providing engineering and ground handling services. Air New Zealand dominates the local market with around 80% share, although the majority of revenue is derived from international and trans-Tasman activity.
Sector
Industrials
Industry
Airlines
Stock Style Box
Small Value
Total Number of Employees
10,233
Website
https://www.airnewzealand.co.nz

Competitors

Valuation

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Metric
AIR
01055
QAN
Price/Earnings (Normalized)
 10.65—8.97
Price/Book Value
 0.891.4840.26
Price/Sales
 0.260.300.57
Price/Cash Flow
 2.201.453.60
Price/Earnings
AIR
01055
QAN

Financial Strength

Metric
AIR
01055
QAN
Quick Ratio
 0.480.160.27
Current Ratio
 0.680.230.34
Interest Coverage
 1.371.026.56
Quick Ratio
AIR
01055
QAN

Profitability

Metric
AIR
01055
QAN
Return on Assets (Normalized)
 1.65%−0.57%6.19%
Return on Equity (Normalized)
 7.18%−4.80%909.05%
Return on Invested Capital (Normalized)
 3.29%−0.06%20.78%
Return on Assets
AIR
01055
QAN

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