Air NZ power plants: GE or Rolls-Royce

By RICHARD PAMATATAU and CHRIS DANIELS



Rival jet engine makers General Electric and Rolls-Royce are waiting to see whose engines Air New Zealand has chosen to power its fleet of new planes.

The Herald understands GE and Rolls-Royce have made the airline's final shortlist.

Both were expecting to hear soon and Air NZ chief executive Ralph Norris has indicated a decision is close.

Pratt and Whitney was also a contender to supply new engines but has since packed up and gone home.

Rolls-Royce and GE have both had teams at Air NZ working on the project, which could see the carrier buy at least 16 engines for a proposed new fleet of around eight new long-haul aircraft.

Air NZ has narrowed its choices down to the Boeing 777 range or the Airbus A340 family.

It became part of the Airbus family for the first time last year when it bought 15 A320 planes for use on the transtasman and Pacific routes.

Boeing 777s have two big engines each, while the A340s have four smaller ones. Airlines base their engine selection on the distances they want to fly, the number of takeoffs and landings needed and the usual parameters of efficiency and performance. This month's decision to buy new 300-seat planes will be significant for the future of Air NZ, which will increasingly be flying smaller planes greater distances.

These new planes, the first of which would likely be delivered towards the end of next year, would also form the basis of the eventual replacement of its Boeing 747-400 jumbo fleet.

Its most immediate need, though, is the replacement of its fleet of Boeing 767 planes, which it uses to fly to Asia and the Pacific.

New engines are said to cost about US$18 million ($28.5 million) each, but the airline is thought to be driving a hard bargain and expecting massive discounts as well as free spare engines.

The pitches to Air New Zealand involve complex partnering because the deals can be struck on a number of levels, ranging from engine-only arrangements to part of a consortium where the plane supplier bundles the engine in as part of the price.

Services are part of the deal as well.

Market speculation says that an announcement on new planes and engines may be due this Wednesday. Air New Zealand's Norris said last Tuesday that an announcement would be made within a fortnight.