We upgrade Air NZ from a Sell to a Hold. Since our last update, oil prices have dragged lower a major expense item for airlines - at the time the elevated fuel price being one of our major catalyst for the sell rating. While we aren't too surprised over the increase in demand for air travel, however we are amazed with how well Air NZ and other airlines have been able to pass on costs inflation particularly fuel costs onto consumers as air fare remain extremely elevated, as supply struggles to recover back to pre-covid levels and keep up with recovery in demand as the world opens up.