Air NZ flies solo with new planes

By DANIEL RIORDAN and MATHEW DEARNALEY

Air New Zealand's leaders say the national carrier is setting its own flight path by acquiring up to 35 new Airbus aircraft for its short-haul international fleet.

The cost of the planes - the airline's first from the European manufacturer - will be met from Air NZ's capital investment budget of around $828 million and the company says it won't need to seek extra cash.

And Air NZ chairman John Palmer was in no mood yesterday to talk about possible alliances with Qantas.

"This should be seen as a sign of Air NZ determining its own future, and any other relationships we have with other partners will be predicated on us having a business we think is in our interests," he said.

The airline is getting 15 new Airbus A320 planes, and has purchase rights on another 20 which it can take up over the next 10 years.

Ten planes, a flight simulator, spares and other bits and pieces are being acquired with a combination of purchase and leasing agreements.

The mix of these is still to be determined.

Five aircraft will be acquired under standard operating leases.

The first of the new planes will join the fleet in October next year, and the 15th plane should be delivered by the end of 2006.

They will replace four Boeing 767-200s and nine Boeing 737-300s used to fly the Tasman and to Pacific Island destinations.

The change in aircraft will cost an extra $1.5 million a year.

But Air NZ says those costs will be more than offset by the Airbuses' lower operating costs.

Chief executive Ralph Norris said the airline chose Airbuses mainly because they were cheaper to operate - by at least 10 to 15 per cent a year on a seats-per-kilometre basis.

They could also carry more passengers and freight.

Although pilots and engineers will have to be retrained, Mr Norris said introducing the new planes would enable the airline's engineering unit to bring in extra revenue from maintenance work for other Airbus-flying airlines.

Air NZ will continue to use Boeing planes on its domestic and long-haul international routes.

The A320 seats about 162 passengers, compared to the 136-seat B737-300.

Airbus has been aggressive in its wooing of airlines Downunder.

Qantas has ordered 13 Airbus A330s and Virgin Blue is expected to announce next month whether it will also acquire Airbuses as part of its multibillion-dollar fleet expansion.

Pilots, who are threatening major disruption to Air New Zealand flights with a 48-hour strike in a fortnight, are reserving judgment on the fleet upgrade plans while they weigh up workforce implications.

Airline Pilots Association industrial director Garth McGearty, a Boeing 767 captain, said he considered Airbus 320s a good aircraft choice but wondered how many might end up with Air NZ's budget subsidiary Freedom Air instead of the main fleet.

The union says pilots will strike from 4am on Thursday, July 19, in protest at possible job losses and a lack of career protection from what they believe is a plan to transfer some of their work to Freedom.

They say this will initially leave 32 pilots surplus, and more will be affected as Freedom expands.

Air New Zealand's management said yesterday that it would be employing more pilots "over time" and it had made no suggestion that any now working for the parent airline move to Freedom.

But Mr McGearty said information the airline supplied to the union indicated an intention to transfer work in that direction.

Airline spokesman Mark Champion said no decisions had been made on whether some of the new aircraft would go to Freedom, which now has four Boeings compared with two last year.

The airline has denied that it is seeking cost cuts from the pilots, saying it is asking all its employees to accept a 12-month wage "pause" to assist with its recovery from last year's near-collapse.

But it says it has required employment conditions to be altered if pilots want to be able to switch between Air New Zealand and Freedom, as proposed by the union, although without any pay cuts.

Mr McGearty said the union had offered cost savings of about 12 per cent from pooling the pilots of both operations, but Air New Zealand wanted a further 7 per cent.

The union says it timed the strike to avoid the school holidays, but admits overlooking the second tri-nations rugby test, between South Africa and New Zealand in Wellington on July 20, when about 500 of Air NZ's 650 pilots are expected to be on the ground.

Aircraft maintenance engineers, angry at being expected to accept a wage freeze when they say work is "coming out of our ears", intend holding stopwork meetings over three days next week.

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