Air NZ set to make big plane call today

Air New Zealand's has had Dreamliners i ts fleet for the last five years. Photo / Brett Phibbs

Air New Zealand will today announce its next widebody plane fleet, with manufacturer Boeing poised to emerge from a shroud of secrecy to win the billion dollar-plus deal.

The airline could opt for new versions of 787 Dreamliners it already has in its fleet, although it has the opportunity to move away from Rolls-Royce engines on planes which will replace its eight 777-200s.

Throughout the last two years the two big planemakers, Boeing and Europe-based Airbus, have been invited to submit proposals to Air New Zealand which remains tight-lipped on which way it has gone. Airlines typically play the big plane makers off against each other for as long as possible to get a better deal.

The same goes for the engine manufacturers. Both Rolls and General Electric have presented to airline executives and the board has taken a close interest in the fleet replacement, meeting over it half a dozen times.

Representatives from the successful plane and engine makers will be at the announcement at Air New Zealand's Auckland headquarters.

During the process new Dreamliners, the recently unveiled Boeing 777X and the Airbus A350XWB have been considered.

A new order from Air NZ would be welcome news for Boeing which is under intense scrutiny after new equipment on its smaller, new 737 Max planes has been linked to two fatal crashes.

Following the crashes Boeing has been widely condemned for its handling of the introduction of new manoeuvring characteristics augmentation systems, although they are different to those on Dreamliners.

A new aircraft order will also help renew impetus for the airline, which this year has been forced to downgrade its profit outlook. It is still feeling the lingering impact of Rolls-Royce engine problems and has now embarked on a process to strip out overhead costs in its head office.

Aside from the Rolls-Royce engine issues, Dreamliners have been a highly successful plane for the airline. It has 13 in its fleet and another one to come as part of the original deal, first signed in 2004.

While the new aircraft won't enter Air New Zealand's fleet until the 2023 financial year, a call is needed now, to put in orders for engines and to finalise the configuration and design of new cabins as the airline moves to a whole new interior for long-range planes.

At list prices, eight new planes could cost between $3.3 billion and $4.5b, but airlines typically get discounts of up to 50 per cent depending on the size of the order.

A prototype 777X was rolled out at Boeing's Seattle plant on March 13 without the planned media fanfare as the planemaker dealt with the crisis from the grounding of Max planes around the world.

The -9 series of the 777X can carry more than 400 passengers while the longer range -8 seats about 50 fewer passengers but has an enormous reach of more than 16,100km. That would make new destinations such as New York, 14,200km away, and Sao Paulo (12,000km) achievable.

Airbus' A350 has several variants, including an ultra-long-range version which the manufacturer says can fly close to 18,000km.

While Air New Zealand hasn't used Airbus for its long-haul routes, it uses smaller single-aisle Airbus A320/A321s on its domestic and short-haul operations.

Air New Zealand wants to fly directly from Auckland to New York. Its current 787-9 fleet is not able to reliably service the route (headwinds on the return journey would compromise loads) a new iteration of the plane could carry greater loads and a different cabin configuration with fewer total seats but a higher number of premium ones would also help make the 14,200km flight more achievable.

Qantas has already proven that Dreamliners have a very long range. In the first year of operating the 14,470km Perth-London service (the longest Dreamliner flight) with 236-seat 787-9s, there have been just four cancellations and the airline says the 94 per cent full planes were almost immediately profitable. It uses GE engines.

Dreamliners first flew for an airline (Japan's ANA) in 2011 and entered the Air New Zealand fleet three years later. The development and early build programme was plagued by delays and problems, and soon after it started flying commercially there were some battery fires. But since a fix was found for the batteries, the plane has provided reliable service for airlines. More than 830 of a total 1400 on order are in service.

Boeing has been talking to Auckland Airport for the past two years about the suitability of its gates and runway in anticipation of the 777X aircraft operating here, if not with Air New Zealand then with another carrier.

The A350 has been successfully introduced to fleets without the problems that have flared in Dreamliners.