Air New Zealand chief financial officer Jeff McDowall says the airline is working towards placing an order with Airbus or Boeing for new widebody aircraft by early 2019.
The timetable for the replacement of Air New Zealand’s Boeing 777-200ER fleet was outlined at the company’s investor day in Auckland on Thursday.
McDowall said the company was “at the tail end” of evaluating the responses to the Request for Information (RFI) process that began in 2018.
“We will be issuing an RFP next month and we then expect the discussions, the evaluation of all of that, the negotiations, to wrap up around come March/April next year,” McDowall said in his investor day presentation.
“And then the first aircraft to arrive late calendar ’22 or the second half of calendar ’22, which would be our financial year ’23.
“We’ve got an opportunity, and a need actually, to replace our 777-200 fleet between the 2023 and 2025 financial years.”
Currently, Air New Zealand has eight 777-200ERs that are configured with 312 seats, comprising 26 in business in a 1-2-1 layout with direct aisle access for every passenger, 40 in premium economy at eight abreast and 246 in economy at 10 across.
The aircraft, which are mainly used on long-haul services to the Americas and Asia, as well as select trans-Tasman routes, were delivered between 2006 and 2007, making them between 12 and 13 years of age.
The largest Air New Zealand widebody is the 777-300ER, of which the airline has seven. These aircraft have 342 seats (44 business, 54 premium economy and 244 economy).
The third widebody in the fleet is the 787-9, which comes in two configurations. There are seven aircraft with 302 seats, while two (and a further two to be delivered) have just 275 seats due to a higher proportion of business and premium economy seats.
McDowall said there were “no bad choices” among the candidates to replace the 777-200ER, which comprised the 787 family and the 777-X family from Boeing, as well as the Airbus A350 family.
“They all provide a significant step up in operating performance compared to the existing 777-200 aircraft, but they are all very different,” McDowall said.
“They all are optimised and are strong at different kinds of missions and therefore the choice that we would make would each be deployed in a slightly different way and would cause us to redeploy the existing fleet in a slightly different way.”
McDowall said the A350s had really strong economic performance and was a very flexible aircraft, with the -900 a similar size and range to the 777-200ER.
“If we got those, essentially we would be able to just put those where the 777-200s fly today,” McDowall said.
“It will be the simplest straight swap pretty much.
“The -1000 is a larger aircraft so brings some different options to the table. For example, it could work quite well flying to the US. Think about places like Houston, possibly Chicago. It could also be good in some of the larger Asian markets so Shanghai for example or Hong Kong.”
Meanwhile, McDowall said the 787, which was already in the fleet in the form of the 787-9 and very familiar to Air New Zealand, was “quite a different proposition”.
“You’ve seen the effect of having that aircraft on our performance,” McDowall said.
McDowall said the 787-10 was a very efficient aircraft. However, it has less range than the 787-9 and any of the other aircraft options.
“However, in the context of our network, the range it offers would work well to Asia,” McDowall said.
“So to put it in context, to bring it to life a little bit, the 767s we used to fly to Asia – so we used to fly them to Shanghai, to Tokyo, to Hong Kong – the 787-10 has got about the same range as that so it suits that part of the network.
“It’s obviously got dramatically better – like two generations better – cost economics than a 767.”
Finally, he said the 777-X family was the largest of the aircraft being considered and more in the 777-300ER category.
Air New Zealand chief strategy, networks and alliances officer Nick Judd said the airline was also working on having an aircraft capable of nonstop flights from Auckland to New York and other points in the Americas.
“We want to try and get to New York, we want to get deeper into South America and so we’re very interested in the shape of these ULR ultra long range aircraft that are coming out,” Judd said in his investor day presentation.
“We are interested to see how Qantas lands the Perth-London flight and what they learn from that.
“And certainly we are having good discussions and in-depth discussions about Boeing and Airbus about what our fleet needs for our network are as we grow.”
The two ultra long-haul contenders are Airbus’s A350-900ULR, which Singapore Airlines will use from October 11 to reclaim the title of the world’s longest flight when it resumes Singapore-New York Newark nonstop service, and Boeing’s in-development 777-8X.
Air New Zealand A321neos arriving late 2018
On the narrowbody front, Air New Zealand was due to receive the first of seven A321neo aircraft on order later in 2018.
The aircraft will be deployed on what McDowall described as larger trans-Tasman routes, such as from Auckland to Melbourne, Nadi and Sydney.
The A321neos have 214 seats in a single-class configuration, an increase of 46 seats from the 168-seat A320ceos currently operating on the airline’s trans-Tasman and Pacific Islands services.
“This aircraft will give us a really strong competitive advantage on the cost side,” McDowall said.
“We will be the first airline to operate A321neo aircraft in this part of the world and they will come at a material cost advantage over any other competitor’s aircraft.”
McDowall said the A321neos would allow A320ceos currently operating those short-haul international routes to be redeployed in the New Zealand domestic market towards the end of calendar 2018.
The slide presentation accompanying the Air New Zealand investor day showed the airline’s domestic jet fleet would increase from 17 aircraft currently to 20 by the year 2020.
This would allow for further capacity growth, given the existing domestic jet fleet was already flying quite a high number of hours.
“It’s got to the point now that the utilisation is essentially maxed out,” McDowall said.
“There’s not a lot of opportunity to increase utilisation further except as some smaller kind of off-peak times of day.
McDowall said Air New Zealand also planned to operate A321neos on its domestic network, replacing older A320s.
