Morningstar | Cost-Cutting and Capacity Discipline Will Help Mitigate Soft Domestic Demand and Higher Fuel Price
Air New Zealand is the eponymous nation's largest domestic airline, with around 80% market share. Air New Zealand also operates international services to a range of destinations, including Australia, the United States, and Asia. The company has turned around its operational performance in recent years, with profitability underpinned by cost reductions, capacity rationalisation, and route optimisation, and more recently, the significant decline in oil prices. We view the outlook for the next one to two years positively, but given the sensitivity to oil prices, which we forecast to increase to USD 62/barrel by 2022, we believe earnings peaked in 2016. The airline industry is cyclical, and in general, airlines have historically operated on slim margins, which leaves little room for error.Air New Zealand is engaged in the transportation of passengers and cargo on an integrated network of scheduled airline services to, from and within New Zealand. Through its subsidiaries, Co. is also engaged in aviation, aircraft leasing and financing, investments, and engineering services. Co.'s geographical segments are New Zealand, Australia and Pacific Islands, United Kingdom and Europe, Asia, and America.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
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