Inside Air New Zealand's cabin overhaul: Hard truths behind the revamp

Air New Zealand customers delivered some harsh feedback about the state of its existing cabin products, which left crew "to do the heavy lifting" and resulted in competitors gaining an advantage.

The airline laid bare the "foundational truths" about what problems needed to be fixed - and positive features - on information panels at its "Hangar 22" warehouse where its new cabins have been developed.

A nose-to-tail overhaul of Air NZ's Dreamliners has been underway for five years, with new seats and cabin interiors, bigger entertainment screens and economy-class sleeping pods publicly unveiled this week.

Before the new cabin was revealed at the central Auckland warehouse, Air NZ chief executive Greg Foran told media from New Zealand and overseas that the airline wanted to be as transparent as possible.

The information panels - including the passenger feedback - reveal the thinking that went into the revamp.

"The foundational truths are the things our customers told us were pain points or needed improving during our extensive customer research," said an airline spokeswoman. "This was incredibly helpful and laid the foundation for the design, and in fact we constantly review this feedback to ensure we are delivering on what customers are after."

During the overhaul project there were 2571 hours of intense customer research.

The airline displayed what customers liked - and didn't - about it. Photo / Grant Bradley

For Economy, foundational truths included:

• "We have been compromising (pitch reduction, food and beverage) to the extent customers now see it as a feat of endurance as opposed to an experience to look forward to. This will be further exacerbated due to ultra long haul.

• "We also know that air travel is becoming less socially acceptable. Our customers provide us with increasingly negative feedback on our lack of sustainability."

• "Our economy cabin does not express distinctive NZ attributes, making our current product generic and undifferentiated. This leaves our crew to do the heavy lifting which is challenging when there are so few."

The airline said Economy serves the most diverse group of passengers with the most diverse needs. With its existing Stretch product (with 10cm extra seat pitch), it had the most product choice in the long haul market.

What Premium Economy will look like aboard Air NZ's new Dreamliners from 2024. Photo / Supplied

For Premium Economy, foundational truths included:

• Passengers had clear expectations and were easily disappointed - an intimate cabin, dedicated crew, dedicated lavatory and a better class of food was why the airline had won awards.

• However, "while our competitors (Emirates, Virgin Atlantic, United) are investing in Premium Economy, the recent cost out climate means ours has been diminished."

• The introduction of a high-value Economy cabin delivers on a key value driver of Premium Economy - space and comfort - but it "needs to work harder to differentiate and justify the price point."

• The Premium Economy proposition was "being the world's number 1 PE enables us to charge more. We must re-invest in this cabin if we want to continue to hold a leadership position and command a price premium."

Business Premier's new seats will give passengers more privacy. Photo / Supplied

For Business Premier, foundational truths included:

•The best product (bed, food, entertainment, screen size, amenities) was difficult to own for long.

• In Business Premier, 43 per cent of travellers were Airpoints members and over half of them were high-value customers who travel frequently, and "they see our change or lack of it". Business class was 72 per cent leisure travellers and not all about productivity. "It needs to be a lot more."

• Ostentatious spending on air travel was becoming less socially acceptable for business customers. The airline thinks Premium Economy will be favoured for business travellers, meaning Business Premier could become purely a leisure class.

• "Luxury today is now more about cultural capital and exclusivity than cliche expensive badges of status. Experiences are the new collectors' item (being geographically isolated allows us to heighten the exclusive experience of travelling to NZ)."

The Business cabin proposition was about the airline's ability to create distinct value - authentic New Zealand. "Our opportunity is to own it and make it scarce and sought after."

For "indulgers" and "way of lifers" seeking out unique experiences, who need a great night's sleep and experience others can't easily get, "we will provide a 'suite' of options ... unlike our competitors who are outdoing each other on product features, we will connect you to our place and people like no other with a sense of manaaki only we can offer."