Air New Zealand Orders More Boeing 787-10s, Plans 787-9s Premium Seats to the US

23 godzin temu

AUCKLAND— Air New Zealand (NZ) is preparing to expand its premium-heavy operations to the United States (US), with the carrier confirming a capacity increase of around 8% in the second half of 2025. The airline highlighted continued strong demand across the Pacific in its 2025 financial results.

The airline reported that inbound North America demand remains solid, supported by a strong US dollar. This trend has encouraged more American travelers to head south, with premium cabins proving especially popular. Air New Zealand (NZ) will soon enhance this experience by rolling out its new Business Luxe and Sleeper Pod products on long-haul Boeing 787-9 (Dreamliner) services.

Air New Zealand 787 Fleet Update

Air New Zealand’s strategy is centered on its Boeing 787-9 retrofit program, which is reshaping the passenger experience.

The airline has begun a comprehensive tip-to-tail upgrade across its 14 Dreamliners, while also preparing to induct five new 787-9s and five 787-10s. All new deliveries will be powered by General Electric GEnx engines.

Upgrades include larger in-flight entertainment screens with Bluetooth connectivity, redesigned Business Premier seats angled toward the windows, and new features such as a Sky Pantry and Economy Stretch seating.

Premium travelers will also benefit from the exclusive Business Luxe option—four front-row seats in the Business Premier cabin with sliding doors, added privacy, and the ability to invite a dining companion.

These cabin changes are designed to keep pace with demand, particularly across Air New Zealand’s busiest North American routes. CEO Greg Foran confirmed that the new 787s will be prioritized for New York (JFK) and other U.S. gateways.

Air New Zealand has expanded its widebody fleet plans by confirming two additional Boeing 787-10 orders. With this move, half of the airline’s current 787 commitments are now for the larger -10 variant. The update was shared in an internal memo to pilots, according to Aviation Week.

Managing Operational Challenges

Air New Zealand has faced setbacks in recent years, particularly with Rolls-Royce engine issues that grounded several aircraft. To maintain schedules, the carrier wet-leased a Boeing 777-300ER previously operated by Cathay Pacific (CX).

Despite disruptions, Air New Zealand remains the largest carrier between New Zealand (AKL) and North America, underpinned by its Star Alliance membership and fleet expansion strategy.

The decision to retrofit existing aircraft was partly influenced by production delays at Boeing, which slowed delivery of new aircraft. By retrofitting, the airline ensures consistent product quality across both its current and incoming fleet.

Air NZ Reports $189M FY2025 Profit

Air New Zealand reported earnings before taxation of $189 million for the 2025 financial year, down from $222 million in 2024 but still at the upper end of guidance. Net profit after taxation was $126 million.

The airline achieved this result despite engine availability issues, rising costs across the aviation sector, and weaker domestic demand.

Air New Zealand’s passenger revenue fell 2 percent to $5.9 billion, reflecting a 4 percent reduction in total network capacity caused by engine shortages. At times, up to six narrowbody and five widebody aircraft were grounded.

Despite these pressures, the airline received $129 million in compensation from manufacturers Rolls-Royce and Pratt & Whitney. Without these disruptions, earnings could have been around $165 million higher.

Fuel expenses improved, dropping 12 percent or $208 million, thanks to lower global jet fuel prices and reduced consumption. However, non-fuel operating costs rose by about $235 million, driven by higher landing charges, labor expenses, and engineering materials.

These increases, around 6 percent year-on-year, are expected to remain a challenge as aviation sector costs continue to outpace New Zealand’s Consumer Price Index.

Transformation Programs and Cost Control

To counter cost inflation, the airline focused on strict financial discipline. Actions included renegotiating supplier contracts, prioritizing essential investment, and strengthening procurement processes.

The “Kia Mau” transformation initiatives delivered approximately $100 million in benefits. These gains came from stronger ancillary revenue, premium travel demand, digital self-service tools such as automated rebooking and live chat, and operational improvements that reduced disruption costs. On-time performance rose by six percentage points in the second half of the year.

Chair Dame Therese Walsh highlighted that the airline maintained a strong balance sheet while managing difficult conditions. Reflecting confidence in the result, the Board declared a final dividend of 1.25 cents per share, payable on 25 September 2025, alongside $38 million returned through a share buyback program.

Air New Zealand Plans Flagship Koru Lounge at Auckland Airport

Leadership Transition

The financial year also marked the upcoming departure of Chief Executive Officer Greg Foran. Walsh credited Foran with steering the airline through unprecedented challenges and ensuring its long-term stability.

Foran emphasized that decisions made during the year—such as securing extra engines, leasing aircraft, and adjusting schedules—were costly but necessary to preserve reliability and customer trust.

He noted that while compensation from engine makers provided relief, the operational constraints still had a major financial impact.

Outlook for FY2026

The airline expects engine-related constraints to persist into 2026, although early signs of recovery are visible. More than half of the Boeing 787 fleet will feature upgraded interiors by next year, with two new GE-powered 787s scheduled for delivery.

Additional capacity will also come from a new A321neo and an ATR aircraft, boosting services within New Zealand, across the Tasman, and to North America.

However, higher aviation charges, including air navigation fees and passenger levies, will increase costs by an estimated $85 million.

Combined with subdued domestic demand and engine availability limits, these pressures will weigh on first-half FY2026 earnings, which are expected to be similar to or below the $34 million achieved in the second half of FY2025.

Despite this, management remains confident in the airline’s strategy, strong balance sheet, and ability to capture demand recovery as economic conditions improve.

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Air New Zealand to Deploy First Retrofitted 787 to San Francisco

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