Dreamliner lifts Air NZ spirits
Thurs "The Australian"
Dreamliner lifts Air NZ spirits
By Steve Creedy
June 03, 2004
PREDICTIONS of a bleak future without a Qantas alliance were in the background yesterday, as Air New Zealand became the world's second carrier to order Boeing's new 7E7 "Dreamliner" in a $NZ1.35 billion ($1.2 billion) aircraft order aimed at boosting capacity and reducing costs.
Air NZ ordered two 7E7s as part of a long-haul fleet renewal, which included eight 300-plus seat Boeing 777- 200ERs and locked in a price on an additional 42 aircraft through purchase rights.
The new planes and comments yesterday by executives painted a brighter picture of the airline's future than some of the gloomy scenarios sketched during the recent defence of the proposed Qantas deal.
"These aircraft will allow us to develop new routes and increase frequency on existing routes as well as providing an overall increase in both passenger and cargo capacity," Air New Zealand chief executive Ralph Norris said.
"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."
Mr Norris said the additional purchase rights reflected Air NZ's belief in the potential to expand its passenger and cargo business into new long-haul destinations and increase traffic from core routes.
Executives would not say which new destinations they were considering, but suggested China, India, South America and the US were among the possibilities.
The decision to buy Boeing planes came after an extensive 18-month evaluation. It will increase the number of long-haul aircraft from 18 to 20 by 2007, delivering a seat capacity increase of about 20 per cent. The Kiwi carrier becomes the first airline to order the Rolls-Royce Trent 1000 engine for the 7E7, due to enter service in 2008, with promises it will use 20 per cent less fuel than existing aircraft.
Air NZ will buy four of its eight 777s and lease four, with the first entering service in September next year.
Asked what the Boeing decision meant for synergies with Qantas, which was diversifying into Airbus A330 and A380 planes in its long-haul fleet, Mr Norris said Air NZ had to look at the routes it flew and the aircraft that best met its needs. "So, primarily, this was all about what is in the best interests of Air New Zealand," he said.
By early 2007, Air NZ expects to have a fleet of eight 777- ERS, seven 747s and five 767s delivering 6466 available seats and 291 tonnes of available capacity, up from the current 5408 seats and 268 tonnes.
Mr Norris said the 20 per cent increase in long-haul seats was consistent with the airline's capacity growth goal of 5 per cent.
"The firm commitment to aircraft that has been announced represents a minimum of aircraft that will be required by Air New Zealand, and also falls below the amount that would be required under the low growth scenario," Mr Norris said.
Air NZ planned to fund the aircraft purchases using cash flow and bank debt, and Mr Norris said it was "well within the servicing capabilities of the company".
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