Air New Zealand 2013 Annual Report Download - page 46

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Air New Zealand Annual Financial Results 
44
. OPERATING LEASE COMMITMENTS
GROUP

M
GROUP

M
COMPANY

M
COMPANY

M
Aircra leases payable
Not later than 1 year 135 139 51 42
Later than 1 year and not later than 5 years 586 467 194 142
Later than 5 years 123 164 110 54
844 770 355 238
Property leases payable
Not later than 1 year 35 35 32 31
Later than 1 year and not later than 5 years 105 96 98 90
Later than 5 years 93 87 90 84
233 218 220 205
The Company leases a number of aircra from its wholly owned subsidiary, Air New Zealand Aircra Holdings Limited.
Subject to negotiation, certain aircra operating leases give the Group the right to renew the lease.
26. CONTINGENT LIABILITIES
GROUP

M
GROUP

M
COMPANY

M
COMPANY

M
Uncalled capital of subsidiaries - - 12 12
Guarantee of subsidiary operating lease commitments - - 853 777
Guarantee of subsidiary indebtedness and performance - - 1,482 1,548
Leers of credit and performance bonds 51 26 46 20
51 26 2,393 2,357
All significant legal disputes involving probable loss that can be reliably estimated have been provided for in the financial statements.
There are no contingent liabilities for which it is practicable to estimate the financial effect.
Air New Zealand is currently named in class actions. Two (one in Australia and the other in the United States) make allegations against
more than 30 airlines, of anti competitive conduct in relation to pricing in the air cargo business. A class action in the United States alleges
that Air New Zealand together with many other airlines conspired in respect of fares and surcharges on trans-Pacific routes. All class
actions are being defended.
The allegations made in relation to the air cargo business are also the subject of proceedings by the Australian Competition and Consumer
Commission. A defended hearing in the Federal Court concluded in May 2013 and a decision is awaited. In the event that the Court
determined that Air New Zealand had breached Australian laws, the Company would have potential liability for pecuniary penalties. No
other significant contingent liability claims are outstanding at balance date.
The Group has a partnership agreement with Pra and Whitney in relation to the CEC in which it holds a 49 percent interest (Note 14). By
the nature of the agreement, joint and several liability exists between the two parties. Total liabilities of the CEC are $47 million (30 June
2012: $39 million).
The Company enters into financial guarantee contracts to guarantee the indebtedness of other companies within the Group. Air New
Zealand treats the guarantee contract as a contingent liability until such time as it becomes probable that the Company will be required to
make a payment under the guarantee.
The Company guarantees aircra end of lease obligations of Air New Zealand Aircra Holdings Limited and New Zealand International
Airlines Limited.
Notes to the Financial Statements (Continued)
As at 30 June 2013