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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.
Jack
says:For you information, with regarding the Boeing image, it suppose to be ‘787-10’ not ‘781-10’.
australianaviation.com.au
says:Hi Jack,
Apologies for the error, the story has been corrected.
Arkair
says:Hope they go with A350 and have 2 -4 -2 seating in economy. A350 would fit in better with Air NZ routes particularly if they took mix of 900s, 1000s and 900ULR. Many are long thin routes where 777 is too big. Not sure if A320 and A321 ratings are compatible with an A350 rating but having an all Airbus fleet would have benefits, particularly with maintenance.
Johny
says:AirNZ is killing it! No wonder they left the Virgin group!
At Least there is more than one airline in this region that can run an airline properly!
Marc
says:They’ll run with more 787’s.
Out of the Country
says:@Arkair no chance that NZ would put anything less than 9 across on the 787 or A350 as that is what they have now. They also refitted the 777 with 10 across instead of 9 across. NZ is profitable and used as wise strategy that an end of line carrier needs in order to survive against the onslaught of the mega hub carriers.
Without any clear analysis my feeling is that they will go with the A350 family as that would provide a solid family for the full range of routes that the 777-200ER operate on.
Chris
says:My guess will be that Air NZ will purchase the B787-10, as it still have 5 B787 options left. Since Boeing has given Air NZ a ‘good’ discount as launch customer of the B787-9, Boeing will properly apply the same discount to the B777x for the replacement of the remaining B777-200’s and future replacement of the B777-300’s.
Maintaining a B787/B777 fleet is cost effective for Air NZ in regards to flight and cabin crewing, spares, maintenance and operations for medium to long haul services.
With regards to the A350, it seems that Air NZ is very interested in having an A350 fleet but there is the high cost of introducing a new aircraft type especially in flight and cabin crewing, spares and maintenance. It will be interesting to see what discounts or financial incentives Airbus will give Air NZ and will Airbus offer the A350-1000ulr.
The final discussion on the B777-200 replace will be based on the outcome of Qantas Operation Sunrise project.
I though Air NZ has ordered – 4 A321neo and 9 A320neos not 7 A321neo’s as in the article. Air NZ domestic jet fleet are new A320ceo’s.
Chris
says:Like you my feeling is they will go with the A350 and the fact they brought the A350 test plane to Wellington shows they are really doing the numbers.
I was told that the 787 does not have the freight lift of the 777-200ER.
Looking ahead I think the A350-1000 is a sweet spot for Air NZ and also second officers coming off the A350 it would be a much easier and cost effective transition to the A320 fleet.
While I have not flown the A350 people I know people who have really like it but what I can say as a passenger if I have to fly economy I would avoid the 787. The Air NZ premium economy on the 787 is outstanding!
Broderick
says:My understanding is both Boeing & Airbus have offered big discounts to Air New Zealand on the 789 / 787-10 with Airbus offering the biggest discount for the A350. Only time will tell.
David
says:I too enjoy the PE offering very much on both 777 and 787, that is the only class we fly now. I hope the Boeing option wins out which is the most capable airplane and after all, you want the plane to perform its key task first, that is flying the sector efficiently and safely.
Trogdor
says:Doubt they will get the 787-10, due to the lack of flexibility w.r.t the routes it can operate on. ANZ has less need for a really large capacity aircraft than, say, Qantas, so I suspect the A350 will best suit them.
They can use the -1000 to Asia and the US west coast, and the 900URL should work out of the box for Auckland-New York flights (and being around 800 miles shorter than what Singapore Airlines is doing, they can run a near-full passenger load). Regular 900s will also stand-in as good 777-200ER replacements.
gaga
says:I love how they think it’s necessary to make a colour coded pyramid with arrows and icons just to tell people that they will replaced some old planes in the future.
Even more amusing is that the narrow body visual says that the benefits of deploying larger aircraft are “more efficient growth….” It would be hard for them to achieve any growth by deploying smaller aircraft.
Craigy
says:An interesting article on Flightglobal about the A350-900 ULR. Airbus have stated in the technical specifications that the ULR will have a typical configuration of 173 seats (80J, 93Y) 8 abreast in Y. But here’s an interesting point. The forward baggage hold will be inactive so unusable. From this information, the A350-900 ULR would not meet Qantas’s need of a 300 seat, economic payload requirement. Probably wouldn’t meet ANZ’s either. So while we all have been thinking about the A350, perhaps the rabbit out of the hat trick from Airbus will be a derivative of the A350-1000. Airbus have been quoted as saying that they are looking at ULR options for the A350-1000.
As a side note, Boeing’s claim to be in a better position for Project Sunrise appears now to be somewhat accurate. How this all plays out will be interesting.
Kieran
says:@Chris. The artical s corect in regards to A320neo family order. It is believed Air NZ got some of the A320neo orders upgraded/ converted to A321neo as part of the compensation for the delay in delivery of the orders
k lane
says:looks like Airbus A350 or at least signally to Boeing – competitive tension as we could surprise you and move away from an all Boeing long haul product
Trogdor
says:@Craigy – a few responses
SIA’s A350 is 8-abreast in PE, not Y. There’s no economy seats on their ULRs and 8-abreast is their standard PE config.
Airbus is advertising the URL as having 9,700 miles range with 173 seats, which suits SQ doing a 9,500 mile run from Singapore to New York. However ANZ don’t need all of that range, as Auckland to New York is only 8.800 miles, or about 900 miles under the Airbus claim. This would allow them to trade fuel for passengers and stick to the same MTOW. I have now idea how many extra pax they could get on board, my guess would be something closer to 250 given that a “standard” A359 can do 8,100 miles with 325 pax.
As for the A359-URL not being suitable for Qantas’ project sunrise, I agree. I suspected that they’d need to do something with the larger 1000 version to meet Qantas’ passenger numbers goals, and that appears to be where Airbus is now heading.
Craigy
says:@ Trogdor Re the 8 abreast seating. I was quoting what airbus are stating for economy in the latest specification release for the A350-900ULR as quoted on Flightglobal. SIA have said even with their configuration, there will be times of the year when the aircraft will be payload restricted due to extra fuel requirements. WRT to the ANZ pax numbers of 250. The question is whether the reduced range requirement and increased payload fits under the standard A350-900 or ULR. If it is the ULR, then you are restricted to the rear cargo hold only. In the ULR, the forward hold is deactivated and has no container management equipment installed. Therefore, you could increase the pax numbers but will there be sufficient capacity for the baggage and cargo?