Analyst Note| Angus Hewitt, CFA |
We maintain our NZD 0.95 fair value estimate for shares in no-moat Air New Zealand following the release of fiscal 2022 earnings. We lower our fair value estimate for the Australian-listed securities to AUD 0.85 (from AUD 0.88 previously) on changes in the AUD/NZD exchange rate. The airline reported an underlying pretax loss of NZD 725 million (slightly better than our prior NZD 747 million forecast loss), as international border closures and domestic movement restrictions weighed on air travel demand during the period. But with we think the worst is now behind Air New Zealand, and with a strengthened balance sheet following the March 2022 recapitalisation, the airline is in a strong position to participate in the recovery of air travel.