Big growth year for Air NZ

Rob Fyfe

Air New Zealand will grow its services by 9 per cent this year and then aims to maintain a growth path of 5 to 6 per cent over the following few years, says chief executive Rob Fyfe.

The aviation industry measures airline expansion in available seat kilometres (ASK) - the number of seats multiplied by the number of kilometres they are flown.

On that basis, Air New Zealand is growing faster than it has at any time in the past 15 years, Fyfe said.

In the decade to 2003, the airline managed ASK expansion of just 1 per cent a year.

"So we are seeing almost a decade's worth of expansion in one year," said Fyfe, who described it as a challenging time.

"We have to relearn how to grow at that sort of pace ... because our growth in the past has been very modest."

The 9 per cent growth expected this year includes the introduction of three flights a week direct to Shanghai as well as the move to replace the Auckland/Singapore route with an Auckland/Hong Kong service.

"Off that base we believe we can continue to grow at a rate of 5 to 6 per cent per annum," Fyfe said.

In fact, the airline is committed to that level of growth until at least 2008 when its new aircraft are due. They include eight Boeing 777s and three new-model 787 Dreamliners.

The airline had options on new aircraft which would be exercised if the growth levels were maintained, Fyfe said.

The decision to stick with Boeing has proved a good one after the troubles that have hit Airbus and its flagship A380 aircraft this year.

Rivals such as Qantas have been paid compensation for delays of more than a year on delivery of the world's largest passenger plane.

The biggest opportunity the delays create for Air New Zealand is the edge they give in terms of seating quality and inflight services, Fyfe said.

Having done upgrades around business-class seats and installed a premium economy class, the airline had expected to have an edge over rivals for a while.

"Most other airlines were waiting for the A380 as the catalyst for their next big leap," Fyfe said.

"We had anticipated those A380s being in the market by the end of this year. It now looks like we'll have another year and a half or even two years of a product advantage over our competitors."

That gives Air New Zealand an opportunity to get a much bigger pay back from its investment in refurbishing its aircraft.