Air New Zealand’s Greg Foran on recent engine issues and contractors in Manila

Air New Zealand boss Greg Foran says he’s confident contact centres will be able to cope with the fallout from engine issues that could stretch for two years.

He said the airline was making it easier for customers to self-serve so they don’t need to contact the airline.

“We’re going through and fixing digital connections week by week, month by month so more and more customers can self-serve as opposed to having to ring us.”

While dealing with the contact centre could still be “clunky” and below the standard the airline wanted, wait times were falling, and a move to handling social and digital inquiries in the Philippines would help.

“We’ve made some good progress during the year.”

"Some of the issues that we’ve seen, [such as] getting through Auckland Airport, are being resolved,” says Air New Zealand chief executive Greg Foran. Photo / George Heard

More than 90 per cent of passengers get refunds within a week, although more complex ones take longer.

“But the wait time for that now is less than four weeks. In terms of the call centre, domestic has been very good for months,” said Foran.

“Most people aren’t waiting on domestic calls, but for more complex offshore calls, they have been waiting up to an hour, in some cases a bit more. So we’re pivoting.”

While around 100 contractors in Manila would handle social and written communication, the airline was keeping voice inquiries in-house with its own staff or Auckland-based contractors.

Across the Tasman, Qantas has been plagued by serious scandals, including it allegedly selling “ghost flights”, but the level of service has also been a complaint, which has led to commentary about Australians “falling out of love” with the airlines.

Could the same happen here?

Foran said he’d travelled to the US, Singapore, Hong Kong, Australia and Rarotonga during the last week, and he wasn’t sensing that.

“I would say to you that what I sense in the airline are very good vibes. Some of the issues that we’ve seen, [such as] getting through Auckland Airport, are being resolved,” he said.

“We’ve always maintained an approach that we’ve got five stakeholders that we need to do a great job of looking after. And those five are our customers, our staff, the suppliers we deal with, the communities in which we operate and our shareholders.”

New bag-tracking technology had been rolled out, a new premium check-in area at Auckland Airport was open, more aircraft were being fitted with the capacity to screen live sport and new uniforms were on the way.

However, the problem with Pratt & Whitney (P&W) engines which could ground up to five of its A320s at any one time next year and ongoing issues with Rolls-Royce engines on Dreamliners was a "sideswipe" for the airline beyond its control, said Foran.

The P&W problem means flights to Hobart have been paused from April next year, as have flights to Seoul, because of the Rolls-Royce issue.

About 329,000 passengers are on affected planes. Around half of those will not have their plans impacted at all, but the remainder will have a range of problems to deal with, ranging from different flight times of up to a day.

“With the majority of passengers, it may be a bit inconvenient, but they’ll work through it. But I accept that for some who may have onward connecting flights and [are then] delayed by two hours, you’ve missed your connection.”

These problems would take more work and those passengers were being contacted.

“We’re being very transparent around what’s happening.”

Simon Russell, founder and chief executive of Eagle Aviation Consulting, says the P&W problem for Air New Zealand and other airlines is significant.

Earlier this year, P&W announced a recall of 1200 engines due to inspections required for microscopic cracks, causing operational disruptions for 57 airlines worldwide.

“It’s going to take some time to resolve. The airlines that are exposed will be retrenching their schedules, and it’s significantly going to disrupt a recovering travel market.”

He said fewer planes meant less capacity, and this could drive up prices - if demand stays strong.

But that could be hit by the tougher economic environment and less discretionary spending on travel may cool demand, especially among leisure travellers.

Singapore Airlines and Air NZ are increasing capacity to Aotearoa.

Expansion to Singapore

Air New Zealand and Singapore Airlines have announced increased capacity between Singapore and New Zealand from March 2024 to meet continued high demand.

During the northern summer (NZ’s winter), from March 31, 2024, the second daily Air New Zealand service will be operated using a Boeing 777- 300ER aircraft, adding an additional 17,000 seats over the period.

Over the northern winter (New Zealand’s summer) period in 2024, the two airlines are planning to jointly operate four daily flights between Auckland and Singapore.

Subject to regulatory approval, from October 27, 2024, Auckland will see an additional daily Singapore Airlines flight operating direct to Singapore, with an Airbus A350-900 providing more than 1700 seats on the route each week. The addition of the fourth daily service will see Singapore Airlines and Air New Zealand jointly exceed their combined pre-Covid capacity on the Auckland-Singapore route for the northern winter period.

Daily Singapore-Christchurch flights operated by Singapore Airlines will be boosted next NZ summer.

Singapore Airlines’ New Zealand general manager, George Robertson, said the additional services would help to meet the continued high demand for travel.

“We are pleased to step up our frequency to New Zealand in response to strong demand for travel into and out of the North and South Island since international borders re-opened. The investment in deepening our operational footprint across New Zealand also recognises the importance of our joint venture.”

Earlier this week, Singapore Airlines reported its highest-ever interim profit in the first half of its fiscal year, due to record load factors.

Net profit rose to S$1.44 billion (NZ$179b) in the first half ended September from S$927 million the previous year.

However, the airline warned that heightened geopolitical risks and macroeconomic uncertainties continue to pose challenges for the airline industry.

High fuel prices due to supply risks in the oil market and inflationary pressures on non-fuel costs are key concerns.

Grant Bradley has been working at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.