Air New Zealand announces new long haul aircraft choice
Today the company reached agreement on behalf of Air New Zealand, to acquire eight new Boeing 777-200 ER and two Boeing 7E7 aircraft as well as rights to purchase a further 42 long-haul aircraft.
These aircraft will allow us to develop new routes and increase frequency on existing routes as well as provide an overall increase in both passenger and cargo capacity. Another benefit is that the new fleet will provide Air New Zealand with lower operating costs and improved financial performance over and above that which could be achieved by expanding the existing fleet of 10 Boeing 767s.
Four of the new 300-plus seat Boeing 777-200 ER aircraft will be purchased and the other four leased from International Lease Finance Corporation. The cost of the four aircraft and the necessary infrastructure to maintain the fleet of eight is in excess of NZ$1-billion.
The interiors for these new aircraft will mirror the soon-to-be unveiled upgrade for our Boeing 747-400s.
The eight Boeing 777-200 ER aircraft will begin entering service in September 2005, with the first five expected to be delivered by April 2006. The final three aircraft will be introduced in the last half of 2006, and all will be powered by Rolls Royce Trent 800 series engines.
Air New Zealand's existing fleet of Boeing 767s will be reduced from 10 to 5, when aircraft are returned as their leases expire over the next two years.
The decision to purchase the Boeing 777-200 ER and 7E7 represents the next phase in our commitment to transforming Air New Zealand's business. The first phase was the introduction of Domestic Express, Tasman Express and Pacific Express and the corresponding introduction of our new Airbus A320 fleet.
The delivery date for the two 7E7 aircraft, which will be capable of carrying approximately 230 customers, is still to be determined, but it will coincide with the retirement from service of the remaining 767s. The cost of these two aircraft and necessary infrastructure to support them is in excess of NZ$350 million.
Air New Zealand's 7E7s will be powered by the revolutionary new Rolls Royce Trent 1000 engine and we are the first airline in the world to place an order for engines to power the new Boeing 7E7.
Our decision to commit to the 7E7 and the Rolls Royce Trent 1000 is a clear signal of where we at Air New Zealand are positioning ourselves - innovative, efficient and delivering the best products to customers.
The Boeing 7E7 will use 20 percent less fuel than any other aircraft of its size. It will travel at speeds similar to today's fastest wide bodies and feature innovative technology that will give passengers great comfort.
The Boeing 7E7 will also carry up to 50% more cargo than today's similar size aircraft.
Our decision to acquire purchase rights to a further 42 aircraft reflects our belief in the potential to expand our passenger and cargo business into new long haul destinations and increase traffic from existing core routes.
The purchase rights will give us the ability to choose from a range of aircraft types that best suit our long haul business as it develops in the future. The aircraft options will include the Boeing 777-200 ER, 777-200 LR, 7E7 and the 777-300 ER, which could replace our Boeing 747s in about a decade.
To put this into a passenger and cargo context, Air New Zealand's long haul fleet currently consists of 5408 available seats and 268 tonnes available capacity across18 aircraft.
By early 2007, the fleet will consist of 6466 available seats and 291 tonnes available capacity across 20 aircraft. This represents a 20% increase in seats for long haul aircraft.
This growth is consistent with the airline's capacity growth goal of 5 percent, given the network base year of 2003.
I would like today to pay tribute to the fine team lead by Rob Fyfe, Mike Flanagan and Mike Hawkins who have spent the past 18 months conducting an exhaustive evaluation of the aircraft options available from both Boeing and Airbus.
The intensive and robust evaluation process highlighted that both the manufacturers' products were capable of meeting Air New Zealand's requirements. But on balance, the Boeing aircraft best fits our long haul and business needs.
This same exhaustive process two years ago found that the Airbus A320 was the best fit for our short haul needs and as expected the aircraft is performing to expectations and has proven to be the right choice for the airline.