will reveal its plans for a major overhaul of its international operations early next year, and will move as quickly as possible to implement the changes, a senior executive says.
While some changes will take longer to implement, others will be rolled out straight away, General Manager-International Operations Christopher Luxon tells Aviation Week. The longer-term actions are those that involve other stakeholders and those that will require more work “to get the execution right,” he adds.
Air NZ says that while the airline overall is profitable, the long-haul division is losing money. The goal of the review, first announced in August, is to achieve sustainable profitability, which will enable the addition of new routes and new aircraft, Luxon says. He notes that similar reviews have been very successful for the carrier’s domestic and Australian networks.
The international review will not result in any changes to Air NZ’s existing orders, Luxon says. But aside from that, “all options are on the table,” and all costs and routes will be part of the review.
Any network changes will support Air NZ’s focus on serving Australasian and Pacific rim markets with point-to-point flights. The carrier sees growth opportunities in North American destinations beyond the East Coast, in China, the rest of Asia and South America, says Luxon.
This means it is very unlikely there will be any additional ultra-long-haul, one-stop destinations. Such routes beyond the Pacific rim nations are “quite challenging” to operate profitably, Luxon says.
Improved Operating Efficiencies
The existing one-stop flights to London via Hong Kong and Los Angeles are likely to remain for now. However, in a recent memo to employees, CEO Rob Fyfe says the future of these services depends on “being able to achieve improved operating efficiencies and building partnerships to ensure these services can be operated profitably.”
Air NZ’s international route plans will have to wait until its eightstart arriving, but Luxon says, “There are still markets we should be exploring” before that.
Alliance arrangements will also be a large part of the review, and Air NZ will examine its current links to make sure it has the agreements that best suit its strategy.
The carrier will investigate potential new partners, both within and outside the, Luxon says. It will look for airlines with “strong home markets that [can] provide good feed” to the Air NZ network. Fyfe previously said the airline will consider “different or additional” alliances.
The 787 remains a key element of Air NZ’s planning, and the airline is the launch customer for the -9 variant. Boeing recently announced another delay for the -9, with Air NZ expected to take delivery of the first aircraft in early 2014, rather than December 2013, as scheduled.
Luxon says that while “any delay is frustrating,” the airline will not have to adjust its plans further due to the latest timetable slip. It had already based its assumptions on the first -9 entering service in the first half of 2014, he says.
Meanwhile, Air NZ recently took delivery of its fourth-300ER, and the fifth and final aircraft from this order is due to arrive in early January. Completion of the order will enable the airline to operate all Auckland-Los Angeles and Los Angeles- flights with new -300ERs.