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Air New Zealand is looking to save more than $100 million in fuel costs a year as it puts smaller planes on services to London.
Surging oil prices are causing airlines around the world to brace for slower growth, tighter earnings and deeper cost cutting.
Air NZ plans to replace its 379-seat Boeing 747-400 on the Auckland-to-London service, via Los Angeles, from late September with a more fuel-efficient, twin-engine 313-seat Boeing 777-200ER.
A month ago, Air NZ said it expected rising fuel prices to lower its operating profit.
It did not expect to better its $268 million profit before unusuals and tax in 2007, forecasting instead a result of $200 million to $220 million.
Transtasman and Pacific fares rose an average of 3 per cent yesterday.
