Air NZ looking likely to pick Dreamliner option
CHRISTOPHER Luxon has had his toughest year at the top of Air New Zealand.
Although the airline continued its outstanding financial performance, the Dreamliner engine issue has plagued the airline, forcing it to revamp schedules and charter planes he concedes have resulted in ‘‘suboptimal’’ experiences for passengers.
The airline has been drawn in to a rolling maul with selfproclaimed regional champion Shane Jones over issues ranging from air services to the provinces to the merits of its latest inflight video.
And to cap off a difficult 12 months, a nasty industrial dispute flared with engineers which threatened to disrupt Christmas.
It was resolved at a late stage but the airline did not escape part of the fallout from disgruntled passengers wondering how it got to the point it did.
But 2019 is a whole new year for the airline and Mr Luxon, who has been chief executive since 2013.
Speaking on the inaugural flight to Chicago, he said the airline was poised to make decisions which will change the look and feel of the airline into next decade.
It all starts with the long haul hardware. The airline’s nine Boeing 777200s are up for replacement as at nearly 13 years old on average they are almost twice the age of the rest of the fleet.
Requests for proposals are out with aircraft manufacturers Boeing and Airbus which are building new planes that can fly longer with more passengers than the aircraft they will replace.
This come as the airline starts thinking about going to Rio de Janeiro and Sao Paulo in Brazil, and New York some time in the next decade.
In the frame are Boeing’s 777X which has yet to fly, Airbus A350 and — quite possibly the plane with the insider running — a newly configured Dreamliner.
‘‘The 787 [has] proven to be highly successful and [is] continuing to improve as a platform, so that’s an interesting proposition,’’ he says.
Boeing had been talking about getting more range from the 787.
Opting for an Airbus A350 would be a surprise. The airline has used Boeing planes for its longhaul operations for decades and a completely new aircraft from a different manufacturer would require a shakeup in crew training, maintenance and support infrastructure.
The large size of the 777X, and the fact it won’t be proven in commercial service by the time Air New Zealand needs to replace its 777200s, will also come into play.
‘‘That’s the whole question — what do you configure with payload and get to those longhaul destinations?’’
The airline’s ‘‘code 2’’ Dreamliners used on the 13,200km Chicago leg have 55 fewer econ omy seats and more premium seats than earlier model ones. Those in business and premium economy mean a better yield for the airline.
And fewer seats mean less weight and more range, crucially for flying one leg of a round trip into prevailing winds.
‘‘We’re starting to think could we do a code 3 and take another 30 economy seats off.’’
Singapore Airlines has set the bar, flying the longest route in the world between Singapore and New York using a plane with just 161 premium seats.
Although Air New Zealand is riding the growing trend to more leisure customers flying up front, it is not going to follow that lead and do away with economy class.
New planes give the airline the opportunity to fit them with new interiors.
For most of this year, work has been going on behind closed doors in a space dubbed ‘‘Hangar 22’’ to design a new interior, starting with business class seats to replace the herringbone design that has been in Air New Zealand’s business premier for about a decade.
Mr Luxon said airlines had to maximise the value of the real estate — some of the most expensive in the world.
To start a new longhaul route costs about $300 million to $400 million for two planes and $150 million a year to keep them running. They have to be 80% full to make a new service pay.
The new planes will also have crew in new uniforms and a replacement under way.
This multibilliondollar investment in aircraft comes after consistently high profits through growth and also attention to cutting costs.
‘‘The thing that I’ve learned over seven years is that we have this virtuous model. We want to have top line growth to be able to get to Chicago and make sure its profitable from day one — when we do that we grow the company,’’ he said.
In the year to June, the airline found savings of $105 million in scale benefits. It is on a drive to find more savings this year, and this included reducing flying on some routes.
Air New Zealand would make a decision on the new planes by April. It also needs to make a big call on engines. RollsRoyce and General Electric have both been on sales missions.
Mr Luxon says the unfortunate experience airlines had with RollsRoyce Trent 1000 engines would not colour the decision.
‘‘We’re able to compartmentalise that — we don’t feel there’s any contagion or worry about the 787 engines,’’ he said. — NZME
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